Property management insurance is the most effective way to protect your property against harm. Your home is typically your most significant investment, so it deserves the best protection. In 2019 there is an array of different national and regional insurance companies who want to help you, But what type of property management insurance do you need?
Who Needs Property management Insurance?
If you are involved in the following you need insurance:
- Renting/leasing residential real estate to others
- Managing rental properties on behalf of others
- Contracting services for rental property owners (hiring a maintenance team, handyman, etc.)
What type of property management insurance do you need?
Property managers require insurances that cover the following: Their business, clients, tenants, and property portfolio. While sharing many similarities with typical business insurance coverage, there are also a few industry-specific details that property management insurance covers. From errors and omissions to general liability insurance.
Errors and Omissions Insurance
Professional liability insurance, or errors and omissions insurance is crucial for any business offering a specialized service. Errors and omissions insurance defends you from claims that arise from your acts, failures to act and negligence that cause harm to your tenants or the property. Things like wrongful eviction, failing to respect privacy, etc. This insurance type protects both the tenants and the landlord against any financial losses that the property manager is accountable for.
General Liability Property Management Insurance
General liability insurance is just as the name suggests, general insurance coverage that is intended for the day-to-day operations a business carries out regardless of the industry. Equipping yourself with both an E&O and general liability coverage protects you against any costs you’re legally responsible for; Things like repairs, replacements, medical bills, legal fees, and compensation get covered by general liability insurance.
Business Personal Property Insurance for Property Managers
Following on from general liability insurance, Business personal property insurance is something you may want to add to your package when shopping for insurance. BPP insures all items in your office, from your desk and office plants to your printer and laptop. It also does not matter where your office is located, at home, remote, in a shared-working space or a conventional business building.
Property managers use their laptops and mobile devices every day– they are essential in helping you run your business. They are also often used when managers are on the go or in the field. Say you lost your laptop or your phone was stolen, BPP coverage means this won’t halt operations and will replace the items.
Workers Compensation Insurance
Are you an employer? You need workers compensation insurance. Most states in 2019 require you to purchase WCI the day you hire your first employee. Failing to do so will result in you facing penalties and fines. Although, that shouldn’t be the driving reason behind adding this insurance to your package.
This insurance protects you against the substantial cost of workplace injuries to your staff, which could disrupt your business entirely. Workers compensation insurance protects you from medical expenses, legal expenses, replaces missed wages and can also protect you from lawsuits, regardless of who was at fault.
Deposits And Damage Property Management Insurance
Damage coverage from your tenants is typically the deposit they put down on the property when they sign the lease. This is confirmed and paid before a tenant moves in, and is refundable when the tenant moves out, provided that there is no damage. This is the most standard way of ensuring that you will have money to fix unknown problems if a tenant moves out.
Choosing the right property insurance plan for your business
When selecting an insurance plan, at the bare minimum you need to check that it covers your business, your clients, your tenants and the properties that you manage. However, no two property management companies are the same. This means that different companies require different packages.
Get in contact with a broker that understands this and will customize your coverage to match your needs. It’s imperative that you get a package that reflects your business operations. Property managers face very industry-specific risks, failing to have an appropriate insurance package puts your tenants, clients, employees, and self at tremendous risk.