Landlords Insurance Premiums A Retailers View

Landlords Insurance Premiums A Retailers View


In recent years there has been a significant improvement in the way landlords compile, manage and communicate their service charges to their tenants. This has had led to far greater transparency regarding one of an occupiers major costs. I believe that the property industry now needs to extend this level of interest to landlord’s insurance premiums. Whilst not being of the same financial value it is a significant cost that occupiers are having to pay with in many cases, little or no explanation from the landlord.

Whilst in new leases some element of control can be secured I would suggest that at no time has a new store been turned down because of the wording of the insurance clause. However the most pressing problem lies with the vast number of existing leases and their inherent problems.

Current situation

The payment of such premiums is dealt with in a lease with often only a few lines of generic wording giving I believe a significant proportion of landlords ample opportunity to simply charge their tenants a cost without any satisfactory way for this to be discussed or challenged.

Landlords seem to send in their demands sometimes several months after the renewal date often without an insurance schedule and expect payment without dispute. There is a wide variation across landlords and their agents as to what information is passed to the tenant for them to make the necessary judgement.

Often if the premium is disputed the answer is “well it is what it is”. Landlord’s agents often have limited knowledge and simply pass on the query to the insurer who will come back to the tenant after several months with a bland and confusing explanation still expecting payment without question.

There is seemingly a dramatic inconsistency with regard to the level of premiums for same types of property in the same part of the country with a complete lack of transparency as to how the premiums are calculated. I am sure most tenants would have no objection to pay such premiums if there was some rational explanation attached.

There are several problems that need addressing.

  • A lack of transparency over how the charges are calculated
  • A concern that tenants are paying unnecessary charges
  • There appear to be few actual suppliers
  • There is a nationwide inconsistency in premiums
  • No way simple way to challenge a premium
  • Lack of knowledge by managing agents
  • Lack of consistency of information provided
  • What is provided is often too confusing and not relevant
  • No benchmarking in the property or insurance industry


I appreciate that insurance is often the lowest cost for a property occupier however I am sure that some occupiers have started to look at this cost in far more detail.
The improvement in service charge transparency shows what can be done and I see no reason why the same measures cannot be taken with regard to insurance premiums. New leases need address this matter and there should be a minimum level of consistency applied across the industry.

The ultimate recourse is to the solicitors which can be a costly and lengthy exercise for what on its own is often a relatively small amount compared to the overall occupancy cost of the store.

Landlords and their agents now need to treat these charges in the same manner as service charges. I believe tenants should receive clear and concise information as to what they are being asked to pay with some level of justification.

If as occupiers we can pull together our experiences then I would hope that some influence can be brought to bear in attempt to end the continuing inconsistencies.

Senior Estates Manager
Wilkinson Hardware Stores
12th December 2011