Is one flat in a block liable for damage caused to other properties eg. from fire leaks and would home contents insurance need to be at a high enough level to cover it?

It is possible that you can be held responsible for damages caused to other units if your actions or negligence somehow caused the fire/damage. For instance, maybe you were cooking and something caught on fire or maybe you accidently left your iron on one morning, and this caused a large fire that damaged your flat and several others surrounding yours. This is referred to as 'fire legal liability' or 'property damage legal liability' and is often included in most renters or homeowners policies, but check with your agent to be sure. It is not based upon the contents coverage you select but rather upon the 'personal liability' coverage you select. Your contents coverage only needs to be adequate to replace everything you own in your home.