The right cover at the right price.

Some of the most successful buy to let businesses may have been built on the principle of investing in premises that are thoroughly renovated before being let to tenants.

If you have bought such a property – or if you looking to renovate property you already own in order to maximise its rental potential – how long are the building works likely to last?

Of course it depends on the extent of the changes you want to make, but the question becomes more and more important the longer the works extend beyond a period of around 30-45 consecutive days.

Why is the 30-45 day period significant?

If your building works last longer than a month or so and are such that you need to leave the property unoccupied, you are likely to find that the building insurance that you arranged as the owner of the let property is no longer as comprehensive as it needs to be after such a period of vacancy.

Although insurers may differ on the definition of just what amounts to the vacancy of a property, individuals have certainly been caught out by thinking that their home owner’s or landlords insurance remains in force for the duration of any renovation works.

Historically, for example, there is the case of a couple who had been renovating their home for 12 months before a neighbouring fire spread to their own property and virtually destroyed the whole building. According to a report by the BBC at the time the couple’s insurance claim was rejected because the house was unoccupied when the fire struck – this despite the fact that one or other of the couple was at their home every day during the course of the renovation work.

To avoid being caught out in the same way, you might want to contact specialists in this area of insurance if you are going to be renovating your own home or let property.

Renovation insurance

Renovation insurance recognises not only the fact that the building is going to be empty for the duration of the building works, but also extends to the special risks associated with the changes that are being made to the property.

Building works may inadvertently lead to damage to the existing structure and fabric of the property, for example, and this may not be covered in your standard home or landlords insurance. Renovation insurance, therefore, may be the order of the day.

When building works are taking place at your address, moreover, you may have more than the usual risk of public or property owner’s liability claims, which special insurance during the course of such renovations is again designed to cover.

Perhaps even more critical is your need for adequate cover for the workers you are employing to do the actual building works. In the event of their being injured or suffering loss or damage to their property, you may be held liable. Moreover, you are almost certain to have a legal obligation towards such employees to hold employer’s liability insurance – such as that that may be incorporated in renovation insurance – up to a minimum of £5 million.

Site safety and security are further areas that may need to be safeguarded with the help of adequate renovation insurance.

Finally, even if you are renovating the property whilst still occupying it, you should let your insurance provider know beforehand.