As property managers of both residential and commercial buildings become more susceptible to lawsuits and other types of risks, the need for business insurance coverage only increases with time. To combat the growing chances of a disaster in your unique industry, having the right kind of property manager's insurance is essential. Fortunately, getting coverage can be simple.
An independent insurance agent can help you find the right kind of property management insurance. They'll set you up with a policy that includes each type of coverage you need. But for starters, here's a closer look at property manager insurance and why it's necessary.
The Most Common Property Management Liability Risks
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
Each one of these endeavors comes with its own set of risks. Luckily, property and liability insurance is designed to protect your investments and business.
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What Does Property Manager Insurance Cover?
The biggest risks to be concerned about in property management are related to property maintenance and contract negligence. In most cases, property managers need to carry commercial property insurance and a few other kinds of business liability insurance. Insurance for property managers often includes the following:
- Commercial property insurance:Protects a property manager’s assets after a physical loss due to smoke, fire, wind, hailstorm, vandalism, and other covered events. Property managers are responsible for keeping insurance coverage on the buildings they manage, but it depends on their responsibilities as outlined in the contract with the property owner.
- Commercial general liability:Provides reimbursem*nt if you get sued by a third party, such as a tenant, for claims of bodily injury or personal property damage.
- Professional liability/:In this case, also known as property management liability insurance, this coverage provides reimbursem*nts for lawsuit costs that result from third-party claims of providing negligent or incomplete professional services.
An independent insurance agent can help you get set up with the right kind of property management insurance coverage.
Why Do Property Managers Need Liability Coverage?
One necessary type of coverage for a property manager is professional liability insurance, or errors and omissions coverage. When it comes to property management, there are a few unique exposures that can be protected by professional liability insurance, such as:
- The failure to purchase enough property insurance, resulting in a loss for the property owner
- Wrongful or negligent evictions
- Discrimination claims (e.g., tenant claims discrimination against them by you)
- Other claims of failure to perform professional duties according to your contract
Professional liability insurance covers your legal defense costs, settlements or judgments you're required to pay, court costs, and attorney fees. Commercial general liability insurance will not cover expenses related to professional liability lawsuits, making this coverage essential for property managers.
However, E&O policies have specific coverage exclusions, depending on your profession. Typical exclusions could include:
- Criminal, fraudulent, intentional, or malicious acts
- Bodily injury and property damage
- Workers' compensation claims
- Punitive damages
Having the right kind of professional liability insurance on hand is one of the keys to running a successful property management company.
Other Property Management Coverages to Consider
Insurance for a property management company must include many different types of coverage. You might want to consider adding these coverages to your property manager insurance policy:
- Commercial auto insurance:This covers accidents and other incidents related to company vehicles.
- Workers' compensation insurance: Thisis required for most businesses that have employees and protects you and your employees from the costs of work-related injuries, illnesses, and death.
- Employee dishonesty coverage:A form of crime insurance, this protects the business owner from a financial loss due to employee theft.
- Equipment breakdown insurance: Often referred to asboiler and machinery coverage, this covers costs associated with the accidental breakdown of machinery or equipment and resulting property damage or loss.
Work together with an independent insurance agent to ensure your property manager's insurance policy is truly complete.
Save on Business Insurance
Our independent agents shop around to find you the best coverage.
Why Work with an Independent Insurance Agent?
Independent insurance agents excel at matching the most appropriate policy to the business or professional in need. Shopping around for insurance policies can be time-consuming, and an independent insurance agent's role is to simplify the process.
These agents help ensure you get the best blend of coverage and cost and the property manager insurance policy that meets your unique needs. They shop and compare insurance quotes for you, only presenting the best results.
FAQs
Anyone you ask to serve as a director, manager, or officer might be reluctant to join your operation without some kind of indemnity or financial protection from their decisions. Otherwise, they could put their personal assets at risk.
Which type of lawsuit is commonly filed against property managers by building owners? ›
You may file a small claims lawsuit in your local small claims court as long as there is not a better court to handle your case.
How much does a property manager cost in Missouri? ›
A property management fee will either be charged as a flat monthly rate or as a percentage of your monthly rent. These fees vary based on rental rate, property type, and service scope.In St. Louis, flat fees generally run between $100 and $ 180, whereas percentage fees range from 8% to 10%.
How much is a property manager Florida? ›
Rental Management Fees
residential property management fees, but the average management fee ranges between 8%-12% in the state of Florida. For a single-family home, you might expect to pay 10% in real estate management fees.
What is a manager insurance? ›
What Is an Insurance Manager? Insurance managers help to supervise daily operations at an insurance organization. From team management to conflict resolution, your responsibilities will ensure that employees are motivated and tasks are completed on time and without error.
Do managers have to find coverage? ›
Employment law doesn't define who is responsible for finding coverage for a shift, so that responsibility often falls onto the employee.
Which type of insurance can property managers carry to protect against employee claims of injury? ›
Known as both professional liability insurance or E&O insurance, this type of property management insurance protects Property Management companies (PMCs) from claims about mistakes in their professional services.
What is an action landlords and property managers can take to avoid commingling funds? ›
Here are tips specifically to help landlords avoid commingling funds between their rental property and their personal accounts: Separate bank accounts: Open different bank accounts for each property or investment to track income and expenses easily.
Is property management system a liability? ›
According to the legal resource website NoLo, property managers are held legally liable for a handful of issues per the typical contract. Specifically, these liabilities pertain to serious concerns including bed bugs, injuries, vandalism and crimes at a property.
Do you need a license to be a property manager in Missouri? ›
A person offering property management services in the state of Missouri is required to have a real estate broker's license. A licensee working under a broker is permitted to engage in property management services. Services include leasing, renting, listing, procuring prospects, and negotiating terms.
Assistant Property Manager Salary in Missouri
| Annual Salary | Hourly Wage |
|---|
| Top Earners | $59,563 | $29 |
| 75th Percentile | $47,400 | $23 |
| Average | $41,836 | $20 |
| 25th Percentile | $34,700 | $17 |
Rates can vary, but most property management companies in Las Vegas charge between 8% and 12% of the monthly rent. This fee covers the day-to-day management of the property, including rent collection, tenant communications, and routine maintenance handling.
What do property management fees often consist of? ›
In addition to marketing costs, fees often also include lease-up fees for locating new tenants, as well as lease renewal fees, paid when a current tenant renews their lease. Finally, maintenance fees are another important property management cost to watch out for.
Can I be a property manager without a license in Florida? ›
In Florida, you must earn your Real Estate Broker license to start a property management company. Alternatively, you can work under a Broker with your Florida Real Estate Sale Associate license.
What is the hourly rate for a property manager in Florida? ›
$15.82 is the 25th percentile. Wages below this are outliers. $24.42 is the 75th percentile. Wages above this are outliers.
What is professional management insurance? ›
Management and professional liability insurance is designed to protect you and your business against the potentially devastating costs of those exposures. Without adequate insurance protection, your clients, your reputation, your company and even your personal assets may be at risk.
Is employer insurance worth it? ›
Benefits of employer sponsored health insurance plans include a discount based on your employer's contribution to the premium. Another benefit is that you save time and money researching health insurance on your own. Typically, you can include your dependents, including your spouse, in your plan for an additional cost.
Is there a need for managers? ›
In organizations, managers make up about 70% of the variance in team engagement. They have a tremendous impact on whether companies succeed or fail. 82% of American workers said they would potentially quit their job because of a bad manager. The impact and stakes are REAL.
Does D&O insurance cover managers? ›
D&O insurance reimburses the defense costs incurred by board members, managers, and employees in defending against claims made by shareholders or third parties for alleged wrongdoing. D&O insurance also covers monetary damages, settlements, and awards resulting from such claims.
