Property managers face risks that go far beyond the properties they oversee. From tenant injuries to employee claims and handling client funds, the right insurance program can protect your company when the unexpected happens.
The following are recommended coverages and minimum suggested limits:
- COMMERCIAL GENERAL LIABILITY
- Suggested Limit: $1,000,000 Per Occurrence / $2,000,000 Aggregate
- Helps protect your company against covered third-party bodily injury, property damage, and personal or advertising injury claims arising from your business operations.
- PROPERTY MANAGERS PROFESSIONAL LIABILITY / E&O
- Suggested Minimum Limit: $1,000,000 Per Claim / $1,000,000 Aggregate
- Protects against covered claims alleging mistakes, negligence, or failure to perform professional property management services, such as leasing, inspections, maintenance coordination, accounting, and tenant administration.
- CRIME / FIDELITY COVERAGE
- Suggested Minimum Limit: $500,000
- Particularly important for property managers who collect rents or handle operating accounts, reserves, and other client funds. Coverage should include all insuring agreements such as employee dishonesty, forgery, computer fraud, and funds-transfer fraud.
- CYBER LIABILITY
- Suggested Limit: $1,000,000
- Helps protect against risks involving tenant and owner information, ransomware, data breaches, phishing, business email compromise and electronic funds-transfer fraud. Especially important to include Social Engineering.
- COMMERCIAL AUTO / HIRED & NON-OWNED AUTO
- Suggested Liability Limit: $1,000,000
- Commercial Auto Liability should be maintained if the company is providing employees with autos to drive, and Hired/Non-Owned Auto should be maintained for employees who drive their own autos to meetings, errands, and other company business.
The following are employee-related policies and should be considered for firms with employees:
- EMPLOYMENT PRACTICES LIABILITY (EPLI)
- Suggested Limit: $1,000,000
- Helps protect the company against covered employment-related allegations, such as discrimination, wrongful termination or hostile work environment.
- WORKERS’ COMPENSATION
- Statutory Limits
- Provides required benefits for covered employees who suffer work-related injuries or illnesses.
- Short Term Disability (New York)
- Provides required benefits for employees who suffer non-work related injuries or illness.
Don’t forget the indemnification clause! Your company’s insurance is only one part of the equation. Management agreements with each property should include additional insured wording, indemnification requirements, required limits, and other contractual protections in the property management firm’s favor.
Never, never agree to name the property as Additional Insured on your policies. Most General Liability policies for property managers only provide coverage at the designated location (management office) and do not extend to the properties. Most insurance companies will not agree to name the association as Additional Insured, and if they do, the Additional Insured status will only cover suits naming the association at the property manager’s location. In either case, you can’t comply with the contract, and thus, legal fees will be out of pocket.
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*Disclaimer: These are the minimum coverages and minimum limits suggested. Please discuss with your insurance broker if more coverage is needed/desired.
