Care Home Property Investor Insurance UK: Landlord Cover
Care home property investor insurance covers freeholders who own care homes, nursing homes and specialist healthcare buildings and lease them to operators. The investor needs buildings cover, loss of rent with a long indemnity period, property owners' liability and, where the lease requires it, terrorism. Rebuilding a care home takes far longer than most commercial buildings, because it has to meet current care standards and be registered again before residents can move back in. That is why rent cover of 24 to 36 months is common. The lease decides whether the investor or the operator insures the building, and the two policies must fit together. Insurers look at the operator, the inspection rating, fire safety, sprinklers and the age of the building. If the operator fails and the home closes, the cover needs urgent review, because empty care homes are among the hardest buildings to insure.
Key facts at a glance
- The lease decides who insures. Investor and operator policies must fit together with no gaps.
- Rebuilds take a long time. Loss of rent periods of 24 to 36 months are common.
- The operator affects your premium. Insurers look at its track record and inspection rating.
- Fire safety is examined closely. Residents who need help to escape make fire the main concern.
- Empty care homes are hard to insure. If the operator fails, act quickly to keep cover in place.
Who needs care home property insurance?
We insure owners of healthcare property who let to operators, from single homes to small portfolios.
- Private investors. Owners of one or two care homes on long leases.
- Family property companies. Former operators who now let the home to someone else.
- Funds and healthcare investors. Portfolios of care homes, specialist housing and clinics.
- Developers. New homes built and pre-let to operators.
- Charities. Owners of homes run by another provider.
If you also run the home yourself, see our guide to care home insurance for the operator's covers. For supported living or exempt housing, see supported accommodation insurance.
What does the investor's policy cover?
| Cover | What it protects | Watch out for |
|---|---|---|
| Buildings | The care home, including fixed equipment you own | Rebuild costs to current care standards |
| Loss of rent | Rent lost while the home is rebuilt and re-registered | Indemnity periods that are too short |
| Property owners' liability | Your liability as freeholder | Gaps with the operator's own liability policy |
| Terrorism | Damage from terrorism | Often required by the lease or lender |
| Engineering inspection | Lifts, hoists and boilers you are responsible for | Who arranges the statutory inspections |
| Unoccupied cover | The building if the operator leaves | Conditions that apply very quickly |
Why do care homes need longer rent cover?
A fire in an office might keep it closed for a year. A care home can take much longer.
After a serious fire, the home has to be rebuilt to current standards for room sizes, accessibility and fire safety, which may mean redesigning parts of the building and getting fresh planning consent. The operator then has to satisfy the regulator before residents return, and has to rebuild its staff and occupancy. Rent can be lost through all of that. A 12-month indemnity period, which suits many commercial buildings, is rarely enough. We usually suggest 24 to 36 months, depending on the size and age of the home.
Operators do fail. If yours goes into administration or the home closes, tell your insurer straight away. Empty care homes attract arson, theft and squatters, and few insurers will cover them without strict conditions. See our guide to insurance when a tenant goes into administration.
What do insurers ask?
- The lease and who is responsible for insuring
- The operator, its experience and its inspection rating
- Number of beds and type of care provided
- Building age, construction and any extensions
- Sprinklers, fire detection and compartmentation
- The latest fire risk assessment and any actions
- Rent and the indemnity period you want
- Claims in the last five years
How do you get the best terms?
- Read the insuring clause in the lease. Know exactly what you must insure.
- Get a reinstatement valuation. Based on rebuilding to current care standards.
- Set a realistic rent period. At least 24 months for most homes.
- Share the operator's fire safety records. Insurers want to see them.
- Keep in touch with the operator. Early warning of trouble protects your cover.
- Use a broker who knows healthcare property. The right markets make a real difference.
Frequently asked questions
It depends on the lease. Often the investor insures and recovers the premium, but some leases put it on the operator.
We usually suggest 24 to 36 months for a care home.
It can. Insurers see a well-rated, well-run home as a better risk.
Not always, but they help a great deal, and some newer homes are built with them.
Tell your insurer straight away. If the home closes, unoccupied conditions will apply quickly.
Yes, through specialist unoccupied markets, but expect strict security and inspection conditions.
Yes. As freeholder you can still be held responsible for the building.
Yes. Portfolio policies are common for healthcare investors.
Related guides from Miller & Partner
Miller & Partner Limited (FRN 1029698) is an Appointed Representative of Gauntlet Risk Management Ltd (FRN 308081), which is authorised and regulated by the Financial Conduct Authority. Miller & Partner Limited is registered in England and Wales (company number 16206282) and trades from Vivian House, Roman Bridge Close, Mumbles, Swansea SA3 5BG. This article is general information, not a personal recommendation or an offer of cover. Cover is subject to insurer acceptance and the full terms, conditions and exclusions of the policy issued.
Instagram
LinkedIn