by Kasey Green, Compliance Coordinator
In December 2017, the Rental Protection Agency reported that the increasing growth rate of new renters means about 2,654 individuals are entering the rental market every day. Property Managers are seeing some of the strongest numbers in recent decades with rental households consistently increasing and demand outnumbering supply. With data like this, whether you are just starting out or have been managing properties for years, it’s a great time to be a property manager. However, no matter how stable your situation is, unplanned risks can turn your business upside down. Theft, lawsuits, environmental liabilities, injuries by tenants, and property damage are just a sampling of the hazards property managers can face in their daily operations. Guard against these dangers by getting the right insurance coverage for your risk profile.
As a property management professional, you will work with clients to protect their one of their most valuable assets. From showing the property to presenting to HOA boards, delegating maintenance requests, and locking in leases, you are no stranger to managing details. But how do you extend the same courtesies to your own business? General Liability Insurance and Errors & Omissions Insurance are two details you can’t afford to overlook.
THE NECESSITY OF GENERAL LIABILITY INSURANCE
All businesses, old and new, need general liability insurance. It's basic liability protection that can protect you from a variety of claims that can arise from your business operations including bodily injury, property damage, personal injury, and others. General liability covers business-related incidents that result in bodily injury to a third-party. Say, for example, a prospective renter comes to visit your property management office, and they slip and fall over a step as they come through the door. Could you handle the cost of a lawsuit over a broken bone? Even if it’s found that your property management business is not ultimately at fault, the cost of an attorney and going to court to defend your business might add up. But with your General Liability policy in place, you don’t have to worry about putting a drain on your wallet to pay for court fees.
DON’T FORGET ERROR & OMISSIONS INSURANCE
Anyone working in property management, as in any other service industry that provides a specialized service, should also never be without Error and Omissions Insurance, often referred to as Professional Liability Insurance. With E&O, when you’re sued – even if the lawsuit is one-sided, unfair, or utterly absurd – your insurance can cover your legal bills, which could mean the difference between business as usual and bankruptcy.
All property managers have a unique set of needs and face very specific risks but these two types of coverage, General Liability, and E&O, are a perfect place to start. Your best bet is to enlist an insurance agent to help determine the gaps in your coverage, develop a risk-management strategy, and address all potential areas of exposure.
