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The fact that insurers want to undo an arrangement that has been in place for so long is a sign of the times -- they are toughening up their attitude, as, indeed, are banks.
In 1992, the insurance market, represented by the Association of British Insurers
(ABI), entered into an agreement with the British Banking Association (BBA).
This agreement ensured that insurance policies on buildings covered the interest of banks that had made loans on property. It was not intended to replace specific obligations or undertakings, but rather to be a safety net for banks.

Last summer, the ABI told the BBA that it intended to cancel the agreement because it had fallen out of use. Many of the original signatories, both banks and insurers, were no longer in business, it said, and many new ones were not included. The agreement will end on 30 June 2012, following a notice period starting on 1 January.

The agreement was intended for residential loans. For loans with specific arrangements in place, as one would expect on most commercial property, the cancellation should have no effect.

However, the fact that insurers want to undo an arrangement that has been in place for so long is a sign of the times -- they are toughening up their attitude, as, indeed, are banks...

Read this article in full

 

My work on the London Views Management Framework, on behalf of the City Property Association and featured in an earlier blog, led to one of my regular columns in Property Week. As a result of that, the Investment Property Forum commissioned me to write an article on some of the wider aspects of the insurance implications of a changed planning policy for its journal. That has just been published in the latest edition of "Focus" and the IPF has kindly given permission for my article to be featured on the JLT Real Estate blog -  It addresses some serious concerns about the ability of a normal insurance programme to respond to the investment threatening restrictions that might be imposed by the relevant authority if a building is destroyed and cannot be reinstated. This is an area that seems to have been overlooked before but for which the real estate team at JLT have now developed a range of solutions.

Download the 'Can you reinstate buildings in Central London?' article as a PDF(1.14mb) by clicking here

 

I wanted to bring your attention to an article published in the latest edition of Property Week by Bill Gloyn, Partner, Jardine Lloyd Thompson Real Estate and President of the City Property Association.

I read with some interest his thoughts on the revised ideas for the London Views Management Framework coming out from the London Mayor's office. This forms part of the consultation on the new draft London Plan. The framework basically governs what can be built in and around certain heritage buildings of international importance - in particular, St. Paul's Cathedral, the Houses of Parliament and the Tower of London.

In a recent article published in the Financial Times (25th February 2009), I gave a warning to property owners.

With the prospect of higher premiums, it will be important for landlords to demonstrate that they are managing risks appropriately...

 

Significant changes in liability regulation have created a renewed focus on insurance cover for commercial property. Owners need to do more than simply pay lip service to risk management in the current climate...