February 7, 2020
Property managers have a lot on their plate when it comes to day-to-day tasks. Whether they represent a commercial property or residential, the number of responsibilities that face them can open the door to potential mistakes and lawsuits. That’s why having the right property manager insurance is more important than ever.
But like other professions, covering these professionals with property manager insurance isn’t just a one-size-fits-all solution. There are a variety of coverages that property managers can take advantage of when searching out the best possible coverage against risks.
Here’s a look at what insurance is needed and why it’s needed.
Who Needs Property Manager Insurance?
Lawsuits in this industry against these professionals are common and failing to have the right protection can leave a property manager and their business exposed to major financial and reputational risks. It’s important for property managers to obtain insurance is they are involved in the following areas:
- Managing rental properties
- Renting or leasing residential real estate
- Contracting services for rental properties owners
Type of Property Management You Should Have
Property managers should be operating with insurance that covers not only their business but their clients, their tenants, and the properties they manage as well. While the insurance needs of property management companies and professionals are similar to the needs of businesses in other verticals, there are differences that are unique to property managers.
- Errors and Omissions: property managers should carry professional liability insurance, also known as Errors and Omissions (E&O). This coverage is designed to protect you from claims against things like invasion of privacy, hiring unlicensed contractors, wrongful eviction, and other related actions that are specific to your industry.
- Tenant Discrimination Insurance: This can be a major concern for those who work in property management as protection in this area is not always covered by general liability insurance policies. Adding this kind of coverage can cover property managers when current, prospective or former tenants bring wrongful discrimination claims against you.
- General Liability Insurance: Errors and omissions insurance may cover specialized services offered by a property manager, but you will also need general liability coverage. General liability insurance is meant to cover the daily business practices of any company, no matter the industry.
Adding Extra Coverage
A rental property owner may hire out a property manager for certain projects and tasks. If this is the case, the property manager will not have the same kind of financial interest in the home as an owner. However, the property manager will take on risk and liability as if they are the owner.
Some examples of claims related to this kind of liability are injuries on the property, burglary, fire, water damage, and others. In order to remain protected from all possible issues, a property manager can require a homeowner to add you as an additional insured to their landlord insurance coverage.
About Associations Liability Insurance Agency (ALIA)
The ALIA Team (part of the Riverton Insurance Agency Corporation), specializes in helping real estate professionals find the affordable and comprehensive liability insurance they need, without the hassle. ALIA dates its roots to 1991 with the founding of FREA, Foundation of Real Estate Associates. In 2013, ALIA was created to work with multiple insurance companies thereby broadening the portfolio of products to customers. For more information about our products and services, contact us today at (800) 882-4410.