Engineering Insurance, LOLER Inspections and Plant Maintenance Explained

Most residential developments carry buildings insurance, but many directors are surprised to learn that buildings insurance does not necessarily cover the breakdown of lifts, gates, pumps and other mechanical equipment.

This is where engineering insurance, statutory inspections and planned maintenance become important.

For many residential blocks, engineering compliance is just as important as buildings insurance in helping to protect residents, directors and the long-term condition of the development.

Understanding how engineering insurance, servicing contracts and statutory inspections work together can help directors avoid unexpected costs and compliance issues.

What Is Engineering Insurance?

Engineering insurance is designed to provide protection for certain types of mechanical and electrical equipment installed within a building.

Whilst buildings insurance generally covers insured events such as fire, storm damage and escape of water, engineering insurance is often designed to cover sudden and unforeseen breakdown of machinery and plant.

Depending on the policy, engineering insurance may provide cover for:

• Mechanical breakdown
• Electrical failure
• Sudden equipment failure
• Damage to insured plant
• Emergency repairs
• Inspection services
• Engineer call-outs

Policy cover varies significantly between insurers and should always be reviewed carefully.

Why Isn't This Covered by Buildings Insurance?

One of the most common misconceptions is that buildings insurance covers everything within a building.

In reality, buildings insurance and engineering insurance are often designed to cover different risks.

For example:

• A fire damaging a lift may be covered under buildings insurance.
• A lift motor failing due to mechanical breakdown may require engineering insurance.
• Water damage caused by a burst pipe may be covered under buildings insurance.
• A pump failing due to wear and tear may not be covered under buildings insurance.

The exact position will depend on the policy wording and the circumstances of the claim.

What Equipment May Require Engineering Insurance or Inspection?

The requirements will vary from building to building.

Common examples found within residential developments include:

• Passenger lifts
• Goods lifts
• Platform lifts
• Vehicle lifts
• Automatic gates
• Rising barriers
• Water booster pumps
• Pressurisation units
• Pressure vessels
• Heating plant
• Certain smoke control systems
• Mechanical plant and equipment

The managing agent, inspection body or insurer can help identify which systems require inspection or insurance.

What Is LOLER?

LOLER stands for the Lifting Operations and Lifting Equipment Regulations 1998.

The regulations are designed to ensure that lifting equipment is safe to use and properly maintained.

Where applicable, lifting equipment must be:

• Suitable for its intended purpose
• Properly maintained
• Subject to periodic thorough examination by a competent person

LOLER inspections are separate from routine servicing and maintenance.

What Equipment Is Usually Subject to LOLER?

In residential developments, LOLER commonly applies to:

• Passenger lifts
• Goods lifts
• Platform lifts
• Vehicle lifts
• Other lifting equipment used within the development

The exact requirements depend on the nature and use of the equipment.

What Is a Thorough Examination?

A LOLER thorough examination is an independent safety inspection carried out by a competent inspection body.

The purpose of the examination is to identify defects that may affect the safe operation of the equipment.

A thorough examination is not the same as routine maintenance or servicing.

The inspection body is assessing safety and compliance rather than carrying out repairs.

How Often Are LOLER Inspections Required?

Inspection frequencies depend on the type of equipment and how it is used.

As a general guide:

Passenger Lifts

Typically every 6 months.

Goods Lifts and Certain Other Lifting Equipment

Often every 12 months.

The appropriate inspection interval should always be confirmed with the competent inspection body responsible for the equipment.

Does a LOLER Inspection Include Repairs?

No.

This is one of the most common misconceptions.

A LOLER inspection is designed to identify defects, not repair them.

Following the inspection, the engineer will normally issue a report detailing:

• Observations
• Recommendations
• Defects
• Safety concerns
• Required remedial works

Any repairs identified will normally need to be instructed separately through the maintenance contractor or specialist engineer.

What Happens If Defects Are Found?

Where defects are identified, they will typically be categorised according to their severity.

The report may include:

• Recommendations for future maintenance
• Defects requiring attention
• Defects requiring urgent action
• Defects involving an existing or imminent risk of serious personal injury

Where serious defects are identified, equipment may need to be taken out of service until repairs have been completed.

For this reason, inspection reports should be reviewed promptly and appropriate action taken.

Servicing, Inspections and Repairs: Understanding the Difference

These three functions are often confused.

Servicing

Routine maintenance carried out by a contractor to keep equipment operating correctly.

Thorough Examination

An independent inspection designed to assess safety and identify defects.

Repairs

Works carried out to rectify defects identified through servicing, inspections or equipment failures.

Most developments require all three.

Having a maintenance contract does not remove the need for statutory inspections.

Equally, having a LOLER inspection does not remove the need for servicing or repairs.

Who Is Responsible for Repairs?

The responsibility to repair equipment does not arise from LOLER itself.

Instead, the obligation generally arises through:

• The lease
• Health and safety obligations
• Duties owed by the Freeholder, RTM or RMC
• Recommendations arising from inspections
• General responsibilities to maintain common parts and equipment

Directors and property owners should ensure that inspection reports are reviewed and that appropriate remedial works are carried out where necessary.

Obtaining an inspection report but failing to act upon significant recommendations can expose the development to unnecessary risk.

Why Engineering Insurance Matters

Mechanical and electrical equipment can be expensive to repair or replace.

Examples include:

• Lift motors
• Lift control systems
• Door operators
• Water booster pumps
• Pressurisation units
• Automatic gate motors
• Barrier systems
• Electrical control panels

Engineering insurance can help reduce exposure to unexpected costs arising from sudden equipment failure.

However, like buildings insurance, engineering insurance is not a maintenance contract.

What Engineering Insurance Does Not Usually Cover

Policies vary, but common exclusions often include:

• Wear and tear
• Gradual deterioration
• Corrosion and rust
• Lack of maintenance
• Known defects
• Routine servicing
• Planned replacement works
• Equipment at the end of its useful life

For example:

A lift motor that suddenly fails may be covered under an engineering policy.

A lift motor that has been deteriorating for years and has simply reached the end of its service life may not be covered.

Each claim will depend on the policy wording and the circumstances of the failure.

Common Misconceptions

"Buildings Insurance Covers Lift Breakdowns"

Not necessarily.

Mechanical and electrical failures are often treated differently from insured building damage.

"The Lift Is Serviced, So We Don't Need LOLER Inspections"

Incorrect.

Routine servicing and statutory inspections are separate requirements.

"A LOLER Inspection Means the Equipment Is Fully Maintained"

Not necessarily.

A thorough examination assesses safety but does not replace routine maintenance.

"Engineering Insurance Covers Every Repair"

No.

Engineering insurance is designed to cover specific insured events and is subject to exclusions, limits and conditions.

"The Inspection Company Will Arrange Repairs"

Not usually.

The inspection company identifies defects. The responsibility for arranging repairs normally remains with the Freeholder, RTM, RMC or Managing Agent.

What Should Directors Be Doing?

Directors should ensure that:

• Appropriate maintenance contracts are in place
• Statutory inspections are carried out when required
• Inspection reports are reviewed promptly
• Defects are addressed appropriately
• Engineering insurance arrangements are reviewed regularly
• Records are maintained
• Long-term replacement costs are considered within reserve fund planning

Good asset management is often the difference between a well-run building and a building that constantly suffers unexpected failures and emergency expenditure.

How Archery Estates Can Help

At Archery Estates, we regularly assist Freeholders, Resident Management Companies (RMCs) and Right to Manage Companies (RTMs) with the management of building plant, engineering inspections and compliance obligations.

We can assist with:

• Engineering insurance reviews
• LOLER inspection coordination
• Lift and plant maintenance contracts
• Contractor procurement and management
• Compliance monitoring
• Defect remediation programmes
• Planned preventative maintenance (PPM)
• Reserve fund and lifecycle planning

We work closely with specialist insurers, brokers, inspection bodies and contractors to help ensure that critical building systems remain safe, compliant and properly maintained.

Need Advice?

If you are unsure whether your building requires engineering insurance, LOLER inspections or additional plant compliance checks, contact Archery Estates for practical advice and guidance.