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Arc Legal Group (Arc Legal), the specialist provider of ancillary insurance products and services...
Arc Legal first with unique tenant deposit cover for government backed scheme
Arc Legal Assistance (Arc), the bespoke legal costs insurance provider, has become the first company to announce the development of a dedicated insurance product for a scheme set up under the Government’s mandatory Tenancy Deposit Protection legislation.
Arc has been appointed by Hamilton Fraser Insurance (Scheme Administrator for Tenancy Deposit Solutions Limited (TDSL), one of two insurance-based schemes approved by the Department for Communities and Local Government) to provide indemnity where there is a dispute between the landlord and tenant over a deposit.
This class of insurance has never been written in the UK before and is expected to protect up to 450,000 deposits over the first three years. In the event of a dispute at the end of the tenancy, and the landlord failing to return part or all of the deposit, the insurance arrangements will ensure the return of the deposit to the tenant if they are entitled to it.
From the 6th April 2007 landlords who take deposits from their tenants at the start of the tenancy will have to lodge the whole deposit with a custodial scheme or, if they want to hold the deposit themselves, they will need to join an approved insurance-based scheme. Landlords will have to pay a fee in order to obtain the ‘protection’ required by the Act for each deposit held by them.
The Arc cover will also indemnify legal costs associated with pursuing a landlord for breach of contract following their failure to pay an amount equal to the deposit in to TDSL upon notification of the dispute with the tenant.
The policy will be underwritten by Inter Partner Assistance (Inter Partner Assistance UK is the ‘underwriting provision’ arm of AXA Assistance).
Richard Finan, Director of Arc said: “We have extensive experience of the landlord and tenant insurance market and are delighted to be working with TDS on such a high profile and valuable scheme.
“Our business model enables us to develop bespoke solutions and this scheme has provided us with a perfect platform to demonstrate our ability to understand and respond to such unique requirements.”
Eddie Hooker, Managing Director of Hamilton Fraser Insurance added: “Finding an insurance partner who was able to understand the complexities of the relevant sections of the 2004 Housing Act, to a level that they were prepared to write an indemnity against it, was not easy. However, Arc has a great deal of experience in the landlord and tenant sector and demonstrated to us very early on that they not only understood what the Government wanted to achieve, but were well placed to assess the profile of the risk that we needed to insure.”