LGR: What should councils consider when reviewing their property insurance?

But as they merge into larger authorities, they also must deal with wider property portfolios and new insurance challenges.

Combining different property portfolios means there are more types of assets to insure and more complexity involved. Heritage buildings, schools, waste facilities, and infrastructure – all bring their own risks. Councils must understand these risks to make sure they get the right insurance protection at a fair price.

To provide the right cover, insurers need to know the details of the assets and how they’re managed. This ensures the insurance matches the council’s risk profile.

This includes:

• Risk management practices
• Valuation programmes
• Inspection schedules
• Future investment plans
• Governance processes
• Building occupancy and how they were built

What types of properties require additional consideration?

Council property portfolios are often varied, from heritage buildings to infrastructure. Under LGR, these portfolios can become even more diverse, with new and unexpected risks.

While every council’s estate is different, there are certain property types that usually need extra review and information, such as:

• Heritage and listed buildings
• Civil engineering structures like bridges, piers, pontoons, and tunnels
• Unoccupied properties: details of inspections and future plans
• High-rise buildings taller than seven storeys or 21 metres
• Buildings made with combustible materials or Modern Methods of Construction (MMC)
• Schools built using modular, consortium, or non-standard construction methods
• Waste and recycling facilities, including transfer stations and household waste centres

These properties are often more complicated to rebuild, may involve specialist construction methods, or are used in unique ways. Giving insurers a full and clear picture of the portfolio helps them make well-informed decisions, provide tailored policies, and give confidence about the cover.

How can construction projects impact your insurance requirements?

Managing council properties often involves construction or refurbishment. Whether you’re updating an old building or creating new facilities, it’s important to understand the insurance and contract impacts of these projects.

Construction contracts like Joint Contracts Tribunal (JCT) and New Engineering Contract (NEC) have different rules about insurance and sharing risks. A property policy built to adjust to these, will offer cover for existing buildings and include provisions for joint names insurance needed in such contracts.

For bigger or more complex projects, further details may be required.

For projects ranging from £1 million to £5 million

• Contractor details, including their experience and Public Liability cover
• Description of the works and which structures they’ll impact
• Information about any hot works or higher-risk activities

For projects above £5 million

• Architectural or general arrangement drawings
• High-level cost breakdowns of major elements
• Construction timelines or Gantt charts

Sharing these details early ensures you have the right insurance in place throughout your project.

Why does building construction matter?

Building methods are always changing. While traditional materials like brick, stone, concrete, and timber are still common, councils are now using innovative materials and modern construction techniques to be more sustainable and efficient and reduce delivery times.

For example:

• Off-site manufacturing and prefabricated buildings are becoming more popular. These may use lightweight materials and modern insulation systems. While they have advantages, they can also introduce new risks that need careful management
• Sustainability improvements - like solar panels, battery storage systems, and electric vehicle charging points - can change a building's risk profile too. They require specific installation, maintenance, and safety checks

Knowing how buildings are put together, what materials are used, and any later changes helps insurers assess risk properly. This means we can offer insurance that matches your needs better.

Are your property valuations up to date?

Making sure your buildings are insured for the right value is one of the most important steps in setting up a good property insurance programme.

Property insurance is based on reinstatement costs, which is what it would cost to rebuild the property after a loss. This is different from market value or rental value. Reinstatement costs should include things like:

• Demolition and debris clearance
• Professional fees
• Costs of meeting current laws and building standards
• VAT, if applicable

Regular valuation reviews can help ensure your sums insured are accurate and prevent underinsurance. A qualified Chartered Surveyor or RICS Registered Valuer should carry out these valuations.

How might risk retention and deductibles change after reorganisation?

As councils merge into larger authorities, their approach to risk retention and deductible structures may need to change too.

Different councils come in with different deductibles, claims histories, and risk appetites. Combining these can make it tricky to set up the right insurance arrangements and aggregate limits.

Disclosing historical losses, even those under previous deductible limits, is vital during this process. This helps insurers create programmes that match the new authority's risk strategy while ensuring practical and long-term cover is in place.

How can councils prepare for the change?

Moving from a two-tier council structure to a single is the perfect time to review and improve property insurance plans.

To prepare for the transition, councils should:

• Check property and asset records are accurate
• Update valuation programmes
• Look at current risk management plans
• Understand any complex or unique assets they hold
• Collect information about current and planned construction projects

By doing this, new authorities can develop a clear view of their property portfolio and get insurance cover that supports their future goals.

Key takeaway

Good information makes for successful property insurance.

As councils work through LGR, taking time to review property portfolios and improve data quality can:

• Keep your properties protected
• Boost your resilience
• Give you confidence that your insurance will meet future needs

When insurers know more about your council's assets, construction methods, valuation strategy, and risk management approach, they can offer better and longer-lasting solutions.

How we can help

Local Government Reorganisation is bringing significant change. Our focus is to support councils through contract transitions, align risk approaches, and help shape insurance arrangements that meet the needs of new unitary authorities.

• For support and insights, visit our LGR hub

Drawing on our experience working closely with local authorities, the hub brings together practical guidance, insights, and resources to help councils and stakeholders understand what is changing, why it matters, and what it means in practice.

If you would like to discuss next steps or need support at any stage, please contact your account manager or email LGR@uk.zurich.co.uk.