A fire during refurbishment works on a block of flats is a nightmare scenario, and the question of who pays can be just as stressful as the fire itself. The answer involves several overlapping insurance policies and potential liabilities. This guide explains, in plain English, how leaseholders in England and Wales can try to recover their losses.
Start with the insurance layers
Several policies may respond, and they cover different things:
- The building's buildings insurance (master policy). Usually arranged by the freeholder or resident management company (RMC) and paid via service charge, this covers the structure against risks including fire. It typically does not cover your contents or, sometimes, internal improvements.
- Contractors' All Risks (CAR) insurance. During building works, the contractor (and often the employer) should hold CAR insurance covering damage to the works and existing structure. A fire caused by the works may fall to be dealt with under the CAR policy and the construction contract's insurance provisions, rather than the ordinary buildings policy.
- Your own contents insurance. This covers your possessions and may provide alternative accommodation.
Whether a leaseholder can claim directly under the block policy or the CAR policy depends on the policy wording and lease. Claims under the block policy are typically made by the freeholder or RMC (not individual leaseholders), and rights under the CAR policy depend on who is named as insured in the construction contract and policy. If you are not an insured or co-insured, you may need to act through the freeholder, RMC or managing agent.
A common pitfall is a gap or dispute between the buildings policy and the CAR policy over which should respond. The answer usually turns on the exact lease, building contract and policy wording, including whether the existing structure is insured under the CAR policy, who is named as insured, the scope of coverage, and whether subrogation or joint-insurance provisions affect any liability claims. This is why the construction contract's insurance clauses matter.
Liability claims where insurance falls short
If insurance does not fully cover the loss, you may have claims against those at fault:
- The contractor, in negligence and/or under the building contract, if the fire was caused by careless work (for example, "hot works" without proper precautions).
- The freeholder / RMC, depending on their obligations under the lease and their duty to manage the building and arrange adequate insurance.
- Designers or others, where defective design or supervision contributed.
General negligence, nuisance, contractual claims and lease covenants are usually the primary routes after a refurbishment fire. The Defective Premises Act 1972 may assist where defective work to or in connection with a dwelling makes it unfit for habitation, but it is not a general fire-loss recovery regime. The Building Safety Act 2022 may affect certain remediation and service-charge liabilities in specific building-safety contexts, but is not a general code for allocating losses from refurbishment fires.
Practical steps for leaseholders
- Notify your own insurer and the managing agent/freeholder immediately, and find out which policies are in place (ask for the buildings and any CAR policy details).
- Document everything, photos, an inventory of damage, costs of alternative accommodation, and correspondence.
- Check your lease for who must insure and repair, and how costs are recovered.
- Consider whether the loss is an insurance claim, a service-charge issue, or a liability claim, often it is a combination.
- Take specialist advice early; construction and insurance disputes are technical, and time limits apply.
Key takeaways
- Several policies may respond: the buildings (master) policy, the Contractors' All Risks policy, and your own contents cover.
- Refurbishment fires often turn on the construction contract's insurance terms and whether the buildings or CAR policy responds.
- Where insurance falls short, consider liability claims against the contractor, freeholder/RMC or others in negligence or contract.
- Document losses, check the lease, and take specialist advice promptly.
Sources
- Typical buildings, Contractors' All Risks insurance and construction-contract insurance provisions
- The law of negligence and the Defective Premises Act 1972
- Building Safety Act 2022 (cost allocation in higher-risk buildings)
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.