Insurable Interest

August 19, 2014

At Norris & Fisher Insurance Brokers, we specialise in insurance for community buildings and we receive a number of enquiries from Hall committees and other voluntary bodies asking whether they can insure property belonging to someone else. 

 

A regular case in point is the question as to whether a Parish Council can arrange cover on a community building.  The insurance principle that underlies the answer is Insurable Interest.  

 

The position is that a Parish Council can only arrange insurance on the building if the Council has an insurable interest in the building, in other words if the Parish Council would suffer a loss were the building to be damaged.  The agreement between the Hall committee and the Parish Council should be in writing with the responsibilities of each party shown.  

 

This matter of insurable interest applies in respect of the contents too.  A Hall, its contents and its liabilities can only be insured in the name of a Parish Council if the Council owns and operates the Hall.  Where there is an independent body which runs the Hall – usually a charity – then it is only that charity which can hold the insurance. 

 

Where the Parish Council owns the building but a separate body runs the Hall, then we would normally recommend that the insurance be arranged in the name of the Hall and the insurers notified that the interest of the Parish Council be acknowledged in respect of the buildings section.  This ensures that the Parish Council would receive the payment in the event of a claim for damage to the buildings.  Without insurable interest, the policy is invalid.  

 

Some of the Halls we insure request cover for property belonging to hirers – short mat bowls equipment, for example.  This can usually be arranged provided insurers are notified of the circumstances and values.

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