What Are the Property Management Insurance Requirements?
You are well on your way to starting a property management agency. Maybe you've even got a few property owners already lined up as clients. Before you officially open up your doors for business, you will need to make sure that you have comprehensive property management insurance to protect your business. It's the best way to make sure your business can stay in business. What requirements should you look at for this insurance? Let's take a look at what most companies like yours are going to need.
1. You Will Want to Have a Comprehensive E&O Policy
E&O stands for “errors and omissions” and is becoming required for all property management companies to carry. This means that if a property manager makes an error or omits something, this insurance rider can help to make sure your business stays protected. Even if it is just the claim of a perceived error, comprehensive E&O will make sure that you don't go out of business defending yourself.
2. Make Sure That Your Policy Covers Legal Costs
Any property management company qualifies for a property management insurance program, but not all policies have been created equal. The ever-changing needs of a property manager mean that there is more scrutiny on individual practices and higher costs associated with the errors that will inevitable come. Even if a claim or lawsuit is baseless, you can go broke defending yourself. Having a policy that provides assistance with legal costs can help you maintain your business.
3. These Items Are Not Generally Covered by General Liability Coverage
General liability insurance for property management companies does not cover E&O issues, performance disputes, or issues of professional liability to a property. Think about it like this: doctors carry specific insurance to make sure they are protected against malpractice. That's what property management insurance does for the property manager.
4. Personal Injury Claims Could Devastate You if They Are Not Covered
Personal injury coverages are not usually covered in a standard insurance policy either. You will want to ask your agent about the options that are available to you in this area to make sure that any issue is properly covered. A failure to properly inspect a home could not only mean that you'd need comprehensive E&O, but personal injury as well if the injury resulted from professional negligence.
5. Make Sure the Contractors You Hire Are Also Covered by Your Insurance
Even though the contractors you hire work independently, they are still representing your business. That means there is a certain responsibility that your business must take on because you chose to hire the contractor. By having comprehensive property management insurance, you'll always stay protected. Deductibles for property management insurance can start at $0. Speak with your insurance agent today about the policies that will be needed for your business and you'll be ready to open your doors to new business without the worry of being driven out of business.
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