It appears these days, that property managers of both residential and commercial buildings are becoming more and more susceptible to lawsuits and a number of other types of claims. And as a manager, your job is to care for the business’ property.
Unfortunately, when things go wrong, you can – and will – be held responsible. That’s why having the right insurance is more important now than ever. Lucky for you… here at First Underwriters our team has access to the entire market and we will find you the policy that best fits you.
What Kind of Property Management Liability Risks Are There?
Property managers are ultimately responsible for finding and keeping tenants on someone else’s property. To be successful, they must do the following:
- Negotiate, sign, and enforce leases
- Collect rents
- Make repairs
- Conduct routine maintenance
- Ensure the safety of tenants and guests
And each one of these endeavors comes with its own set of risks. And that’s why there’s property and liability insurance designed to protect your investments.
Why Do Property Managers Need Liability Coverage?
One of the most important types of insurance a property manager should have in their insurance portfolio, is professional liability insurance, or errors and omissions coverage. When it comes to property management, there are a number of unique exposures that can be protected by professional liability insurance, like:
- Failure to purchase appropriate property insurance, resulting in a loss for the property owner
- Wrongful or negligent evictions
- Discrimination claims (e.g., tenant claims some type of discrimination)
- Other claims of failure to perform professional duties according to your contract
Professional liability insurance covers your legal defense costs, settlements, or judgments you are required to pay, court costs, and attorney fees.
Commercial general liability insurance may not provide coverage for any expenses related to professional liability claims or lawsuits, which makes the addition of this coverage so important.
However, E&O policies have specific coverage exclusions, depending on your profession. Typical exclusions could include:
- Criminal, fraudulent, or malicious acts
- Bodily injury and property damage
- Workers compensation claims
- Punitive damages
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Property Management Coverages
Protects a property manager’s assets after a physical loss due to smoke, fire, wind, hailstorm, vandalism, and other covered events. Property managers are generally responsible for keeping insurance coverage on the buildings they manage, but this depends on their responsibilities as outlined in the contract with the property owner.
This is typically included in a commercial property policy. It protects your earnings if you cannot collect rental income for a period of time as a result of some type of unexpected event (storm, fire, etc.). It allows you to earn income while repairs are made to the property.
This type of policy provides coverage if you, your products, services, or employees are found to have negligently caused an injury or damage to someone else’s property. If a resident or visitor falls and is injured on a property you manage, general liability insurance provides coverage for claims against you. It covers damages for the injured party and any costs associated with your legal defense.
This offers coverage for lawsuits that come after providing negligent or deficient professional services.