Keeping your GP surgery property in order - is your buildings insurance up to date?

Properly maintaining your property documents will help ensure that your future property transactions run smoothly and that you are complying with the terms of any mortgage you have secured against your property. Having appropriate buildings insurance in place will also help protect you in the event of future claims.

It is important that your buildings insurance is correct to ensure the partnership has adequate cover and to ensure that the policy complies with the requirements of your mortgage lender. Failure to have correct cover in place may lead to a breach of your mortgage conditions and may lead to a number of issues in the event of a future claim.

In order to be correct, your buildings insurance should:

• Be a standard commercial 'all risks' insurance policy
• Insure as a minimum against the following risks: fire, lightning, aircraft, earthquake, explosion, flood, storm, riot, civil commotion, escape of water or oil, malicious damage, subsidence, heave, landslip, collision and impact from vehicles together with public liability
• State that it is in the names of the partners named on the legal title and not just in the name of the 'Partnership'
• Cover the full reinstatement value of the property - not the market value
• Contain loss of rent insurance for a period of no less than three years, for the value of the rent, licence fee or other payment that is due under any lease, tenancy or licence over the property
• Where the property is subject to a mortgage, the policy should have the mortgage lender's interest noted
• Where the property is subject to a mortgage, the policy should include no excesses over the amount of £1,000.

We frequently encounter GPs who have buildings insurance up to the current market value of their property when their mortgage requires that the property is insured to its full reinstatement value. Even if you have previously insured for the full reinstatement value of your property this value may have increased significantly over the last few years as a result of recent increases in construction costs. You can instruct a surveyor to help you to assess the reinstatement value of your property for insurance purposes.

For more information or advice, please contact Kirsten Brown in our Healthcare team.