Regular inspection of a property’s electrical installation is an important responsibility for homeowners and business owners..
An up-to-date EICR can assure that your electrical system is free of fire and shock risks. It can also optimise insurance costs by demonstrating diligence to providers.
This article explores the EICR process, legal mandates surrounding electrical checks, and how staying current with assessments can benefit residential and commercial insurance coverage. For homeowners, landlords, and small business owners, understanding the relationship between EICRs and insurance is key to protecting assets and avoiding unwanted surprises.
We will highlight best practices for electrical safety checks, how lapses can impact premiums, and proactive maintenance to mitigate risks. Whether you insure a home or commercial establishment, you will gain useful insights into managing the critical but often overlooked factor of electrical system condition.
Key Summary
- What an EICR inspection entails and why it matters for safety.
- Legal mandates surrounding EICRs for rental properties.
- How an up-to-date EICR can influence home and business insurance costs.
- The financial implications of regular electrical checks versus letting them lapse.
- Best practices for maintaining electrical safety between full EICR inspections.
What Is An EICR
An EICR aims to ensure that the electrical system is completely safe. It checks for compliance with the latest regulations and standards. Over the years, EICRs have become even more important as electrical safety standards continue to evolve.
The process involves a thorough visual inspection of all accessible parts of the electrical installation. An EICR will look at the consumer unit, wiring, sockets, switches and more. Testing is also conducted to detect issues that may not be visible. The findings are then collated into a detailed report.
Obtaining an EICR provides peace of mind that your electrical system is not dangerous. It also highlights any upgrades required to meet the latest safety standards. Staying on top of this is key to minimising fire and electrocution risks in a property.
See also: Understanding the EICR Procedure – Dive deeper into the process and significance of EICRs.
The Legal Mandate Surrounding EICRs
EICRs are not just best practice – they are also a legal requirement in many cases. As of April 2021, private rental properties in England and Wales must have an electrical safety inspection and test at least every 5 years, as mentioned by Letting a Property.
Not adhering to this mandate can lead to heavy penalties for landlords. Non-compliance also poses major safety risks for tenants. It is crucial for rental property owners to arrange EICRs regularly and address any remedial work identified.
While 5-yearly EICRs are not a strict legal requirement, they are strongly recommended for homeowners. Insurance providers may require proof of a valid EICR too. Staying on top of electrical safety is essential, regardless of whether you own or rent your property.
EICR and Homeowner’s Insurance
An up-to-date EICR can positively influence your home insurance premiums as it demonstrates proactive safety management. Insurers are risk averse, so a property without recent electrical checks may be seen as higher risk.
According to Which? Trusted Traders, many house fires are caused by faulty electrics and poor wiring. Your insurer wants reassurance that your electrical installation does not pose a fire hazard.
Obtaining an EICR every 5 years and addressing any issues identified is prudent. It minimises the chances of electrical faults leading to an insurance claim. Some insurers may mandate regular EICRs as part of policy terms too.
See also: What Happens If Your EICR Report Returns an Unsatisfactory Result? – Explore the potential consequences.
EICR’s Impact on Business Insurance
For companies operating out of commercial premises, an up-to-date EICR is critically important. Business insurers will want to ensure your electrical installation complies with the latest safety standards.
If your business premises do not have a current satisfactory EICR, your insurer may impose harsher terms. This could include higher excesses or premiums. They may even decline to offer insurance without adequate electrical checks in place.
It is wise for business owners to arrange regular 5-yearly EICRs. This provides peace of mind for insurers that fire and accident risks are minimised. Be sure to promptly address any remedial work recommended too.
The Financial Implications – The Impact Of An EICR On Insurance
While an EICR involves a modest upfront cost, not having one can be far more financially impactful. According to CheckATrade, a typical EICR costs around £150 for a 3-bedroom home in 2023. At Hexo it is £132 including VAT.
In contrast, insurance premiums may rise significantly without evidence of satisfactory electrical checks every 5 years. Some insurers may increase premiums by 50-100% or more for perceived higher risk properties.
It is a prudent financial move to invest in regular EICRs. Identifying and resolving minor electrical issues early is far less costly than major repairs or insurance claims if faults escalate. The peace of mind for you and your insurer is invaluable too.
See also: The Financial Benefits of Regular Commercial EICR – The specific monetary advantages for businesses.
Best Practices for Property Owners
To maximise safety and optimise insurance costs, it is advisable to arrange an EICR for your property every 5 years. Review policy documents to confirm if this is a mandatory requirement from your provider.
While a full inspection every 5 years is ideal, visual checks and minor maintenance between EICRs is also wise. This is supported by insights from Maxine Lester Residential Lettings. Look out for warning signs of electrical issues like flickering lights, hot plugs/switches, or burning smells.
See also: The Importance Of Ongoing Maintenance Between EICR Inspections – Tips for preventing issues.
Following best practices for electrical safety demonstrates responsibility to insurers. It also ensures that your property’s electrical installation is not a risk or liability.
EICR Non-compliance and Insurance Premiums
Maintaining regular professional EICRs every 5 years is important for managing insurance costs and risks. Insurers may perceive a property as high risk without up-to-date electrical safety verification.
Potential ramifications of an absent or outdated EICR could hypothetically include:
- Increased premiums, as insurers factor in perceived fire, equipment damage or injury risks.
- Larger claim excesses for electrical incidents to transfer more liability to the policyholder.
- Special terms are inserted, like required electrical inspections within a set timeframe.
- Difficulty obtaining coverage without electrical safety documentation.
- Renewal contingencies until a satisfactory EICR is provided.
These actions reflect insurers mitigating risks associated with properties lacking electrical inspection records. Staying compliant with regular 5-yearly EICRs demonstrates responsible property management.
Insurance Incentives for Regular EICRs
Some sources suggest that diligent EICR compliance could open up incentives like discounts. However, actual incentives will vary between insurers.
In theory, insurers may reward rigorous 5-yearly EICR maintenance with:
- Lower premiums, as it signals lower risks.
- Multi-policy or bundle discounts when combined with building cover.
- Lower claim excesses for electrical incidents.
- Renewal leniency if an EICR has recently lapsed.
- Fewer electrical safety-related policy terms.
But without evidence, such incentives are anecdotal. Verify actual offerings with your provider when renewing or buying insurance. Maintaining regular professional EICRs is wise, regardless, for safety.
Conclusion – EICR’s Impact on Insurance
In summary, keeping your EICR up-to-date is critical for insurance purposes for both homeowners and businesses. It proves to your insurer that fire and shock risks are minimised, potentially reducing your premiums.
Conversely, outdated or absent EICRs may lead to inflated premiums or denied coverage. Stay proactive with electrical checks and maintenance. Your safety and hip pocket will thank you.
Verify your EICR’s status and expiry date. If it is expiring soon or absent, contact a qualified electrician to arrange an inspection. Your insurer may even mandate a new EICR, so check policy terms.