INSURANCE Advice


AREYOU BREAKING THELAW? Did you know that engineering inspections


are a statutory requirement not just an insurance option, asks PAUL ROBERTSON?


IF YOUR BLOCK IS LOWRISE with no lifts, has no communal boilersorwindowcleaning cradlesthenyou should be safe to turn the page. If not, read on......... Owing to theway that engineering


insurance is often sold to flatowners or theirmanagingagents, it is apparent that someblocks arefailing to comply with legislation. Generallythisisbecause of acommonmisunderstandingofthe requirementfor statutoryinspections. For manyyears theinsurance industry has used the term“engineering cover” to describe acombinationofstatutoryinspection and optional insurance covers. This has confused mattersand, as aresult,someRMCsmay be breaking the law. There aretwo statutory elements of


legislationthatapply to ‘plant’suchas passengerlifts,communalboilers and windowcleaning cradles. Youhaveadutyto comply with this legislationand for these to be inspectedatperiodicintervals as required by law. Forexample,apassenger lift needs to be inspectedbyanindependent and competentpersontwiceayear. Thefactthat notasinglepersonhas died in thelast100 yearsintheUKasadirectresult ofapassenger lift fallinginits shaftprobablyjustifiesthe need andsuccess of this legislation; along with, of course, the clever safety inventions that help prevent this type of tragedy. If youhaveplant likethisinyourblock


then you need to consider three things: nFirst,you arerequired by lawtohavethe plantinspectedatthe required intervals; ie, twice a year for anything lifting people andannuallyformost pressure vesselsin communal boiler systems. Also,communal gasheating systemsneed an annual gas safety certificate. nSecond, you should consider a maintenance contract to coverthe regular maintenance of this equipment. However, it is important to note that regular maintenance doesNOT usually satisfy the inspection requirements as a maintenance engineermay not be deemed independent. nThird, youneed to consider if youwishto purchase optional engineering insurance. At this pointahistorylessonmayexplain


why this subject has become so confused. Statutory inspection is considered a service and, therefore, subject to VAT. Insurers found away of legitimately avoiding the VATonthe inspection by includingan


Flat Living Issue 14, Spring


Apassenger lift needs to


be inspected twice a year


It is apparent that someblocks are failingto comply


insurance elementinacombined contract. This loophole has long sincebeenclosed, but many insurers still have sizeable inspection facilities and a vested interest to maintain this element of their business. As well as gettingtogrips with your legal


obligations, youmay also bewonderingwhat coverisprovidedbyengineering insurance as,atfirst glance,thisalsoappears to be somewhat shrouded inmystery and lots of detail. Typically a lift in a block of flats will (under theblock policy)beconsideredaspart of thebuildingand, as such,willbecovered foraperil likefire as long as it is included in the reinstatement cost for the block.Onthe otherhand, abreak downduetomechanical failureislikelytobeexcludedunder the block policy. This canleadtosomelift-related claims being rejected under the main policy


whichmay seemunfair if,for example, in the evacuation of occupants following amechanical failure, the lift doors and theirmechanismaredamaged. However, it is themechanicalfailure that is deemed to be thecause of theclaim henceits exclusionfrom theblock policy.Infactthis mechanical breakdownis excluded from most policies.Thisisatypical exampleof where a properly constructed engineering insurance policywould provide cover otherwiseexcludedunder your policy. Theseare availablefrom certain insurers so if you do not already have cover in place you should consider its relevance. As ever, in the case of a block of flats,


thedecisionabout thepurchaseof engineering insurance should be governed by therequirements of thelease.Itmust not, however, be confused with the legal requirements for statutory inspection or the ongoingneed to maintain those itemsof equipmentwhichmaycallforamaintenance contract.●


PaulRobertsonManagingdirector MidwayInsuranceServiceLtd Tel 08453702848 Fax08453702849 Webwww.midway.co.uk


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