| NYC Business Group
What Type of Insurance Do Property Managers Need?
When you are getting into property management, there are many measures you will take to protect yourself and your business. One of them is getting insurance.
Who Needs to Buy Property Management Insurance Coverage
As a property manager, if you participate in the following activities, then you need the right insurance coverage:
- You manage rental properties for other people.
- You lease or rent residential real estate to other people.
- You contract certain services for rental property owners, such as supervising or hiring a property maintenance crew
This industry faces a lot of lawsuits. If you do not have proper insurance in place, you are exposing your business to various risks. On top of that, you have clients who will be staying in the properties you are managing, and they trust you to have measures in place to protect their assets. When you have insurance, not only do you incentivize clients to choose your property, but you also show that you are professional and care about business. Get a Quote Today, to ensure your property is covered at the right amount!
The Type of Property Management Insurance You Need to Have
As a property manager, you need insurance cover for your tenants, clients, and the property you are managing. In some ways, the insurance needs of a property management company and other types of businesses are similar. For instance, most businesses need workers' compensation, health coverage, liability insurance, and property insurance. But also, there are some needs that are unique to a property management firm. Here are some common types of insurance such a company needs.
Errors and Omission Insurance
Any industry that provides special services to customers needs to have errors and omission insurance(E&O), also referred to as professional liability insurance. This type of policy is designed to protect property managers from claims against wrongful eviction, invasion of privacy, using unlicensed contractors, and many other actions related to this industry. Basically, this type of insurance offers protection to both the landlord and the tenant from getting a financial loss due to a mistake directly committed by the property manager.
General Liability Insurance
This type of policy is for the day-to-day business activities of any company. General liability insurance can cover medical bills, repairs and replacement, legal fees, and compensation.
You need to carry both general liability insurance and error and omission coverage for your property management business to cover the services you provide and the day-to-day business activities.
Tenant Discrimination Insurance
Tenant discrimination can also be a problem for a lot of property managers. This area is not always protected under a general liability policy. Therefore, talk to your insurance company about it to ensure you are covered. Tenant discrimination insurance will protect you when a current or former tenant files a claim against you stating wrongful discrimination.
Cyber Liability Insurance
This type of insurance is also known as data breach insurance or cyber risk insurance. In this digital age, you probably run almost all your operations using a computer. That means you have stored huge amounts of confidential data of your tenants and clients. In such a case, your company could be a target for cybercrime. Through cyber liability insurance, you can receive the following coverage:
- Lost income when an attack hinders you from doing business
- Website and data repair and restoration
- Legal fees if you are sued for losing confidential information
Workers Compensation Insurance
This is for any property manager that has workers. Even if it is one employee, you will need to get workers' compensation insurance. It is a state requirement, and the lack of it can lead to penalties. So it is a must-have and with good reason. Your employees can get injured at the workplace, which could cripple your business. It is not just about losing productivity, but without insurance, you will have to dig into your pocket and cover legal and medical expenses. You might also have to replace the lost wages. Workers' compensation insurance pays for these resulting expenses, including legal fees, lost wages, and medical bills. Allow us to help you shop these type of policies and give you advice!
Extra Protection for Property Managers
It is important to ensure that your tenants and the property owners are properly insured as well. When you are hired to manage the property, you will be performing various duties on behalf of the rental property owner. However, you do not have the same financial interests in the properties as the owners. Still, there are some risks you will be taking on as if you are the property owner, which leaves you exposed to various risks concerning the property. For instance, there are some claims that are not covered by a standard property manager's insurance policy, and they include water damage, property damage, fire, or burglary. To ensure that you are protected from all angles, talk to the property owner and request them to add you as an insured party to their landlord's insurance policy.
Your tenants also need to have renters insurance. It will help cover various losses like theft or damage of personal property. This type of insurance can also cover any damage to property caused by negligence. At the end of the day, it is in the property owners' interest to encourage their tenants to purchase renters' insurance. This ensures that when a tenant cannot cover the cost of damage, the landlord will not be stuck with a hefty bill for catering for damages. 
Where Can Property Managers Find The Right Insurance Coverage
Here are some helpful tips to consider when you are choosing insurance for your property management company:
- Ensure that you buy enough coverage to protect the value of all assets and the property
- Purchase liability insurance for all vehicles used in businesses. This includes the manager's truck or car if it is used to do business-related activities
- When purchasing a policy, ensure it covers more than physical injury liability. It should also cover libel, discrimination, slander, invasion of privacy suffered by guests and tenants, and unlawful and retaliatory eviction.
Insurance is worth having. Not only will the right coverage protect your assets, but it will also keep you in business when you are exposed to certain risks. If you are a private owner or real estate investor that has rented out your property, ensure you get landlord insurance. It does more than homeowners insurance. Having a Broker and Agency help you decide this, will make the process a lot smoother, get a quote today!