Building Insurance: Which Policies Does a Residential Complex Need?

An incident such as a fire, a water leak, or an elevator accident can cause heavy losses to a building and its residents. Suitable insurance covers these risks and reduces the liability of the manager and board of directors. In this article we review the essential policies for a complex.

Why does a residential complex need insurance?

A building’s common areas (facilities, the elevator, the lobby, and the facade) are jointly owned by all residents, and damage to them creates a collective cost. Insurance covers these costs against incidents and prevents a sudden financial burden on residents.

Types of essential building insurance

• Fire insurance: cover for damage from fire, explosion, and lightning, and in some cases flood and earthquake, for the common areas.
• Public liability insurance: cover for bodily and property damage to residents or visitors in the common areas.
• Elevator insurance: cover for accidents arising from the elevator, one of the highest-risk parts of a building.

Who is responsible for building insurance?

Obtaining and renewing insurance for the common areas is a duty of the manager and board of directors, and its cost is paid from the service charge or the building’s fund. It is recommended that renewal dates be tracked carefully so that cover is not interrupted.

Building management software and tracking insurance

Hamkhoneh building management software, by recording expenses and the fund and, on the Elite plan, alerting the manager before insurance policies and contracts expire, helps the manager renew policies on time and manage costs transparently. Also see the article on the building reserve and repair fund and apartment ownership law and the duties of the board of directors.

Frequently Asked Questions

Is building insurance mandatory?

Elevator insurance is mandatory in many cases, and fire and public liability insurance are strongly recommended; the final decision is usually made at the assembly.

Does building insurance also cover the inside of units?

A building’s shared insurance usually covers only the common areas; each owner can obtain separate insurance for the inside of their own unit.

Where is the insurance cost paid from?

From the monthly service charge or the building’s reserve fund, recorded transparently in the complex’s accounts.

What is the risk if the insurance is not renewed?

If cover lapses, the cost of any incident will fall on the residents, and the manager’s liability also increases.

Further reading

• What Is Building Management Software and What Can It Do?
• How to Choose the Best Building Management Software: A Buyer’s Guide (2026)
• Best Way to Manage Building Service Charges for Residential Complexes

Complete guide: building management software