What Insurance policies do you have for your PM company?
Member since 2025 · 10 posts · 7 votes
What Insurance policies do you have for your PM company?
Most Popular Reply
Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes
9moWe've helped insure 100's of property managers around the country. A big issue we commonly see is general liability insurance that is limited to the office premise only. This means that the policy won't respond if you are sued do to an injury at one of your managed properties.
Ultimately it comes down to the specifics of your business (1099 vs W2 employees; management only or sales included; etc.) and your risk tolerance.
16 Replies
- Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes9mo
We've helped insure 100's of property managers around the country. A big issue we commonly see is general liability insurance that is limited to the office premise only. This means that the policy won't respond if you are sued do to an injury at one of your managed properties.
Ultimately it comes down to the specifics of your business (1099 vs W2 employees; management only or sales included; etc.) and your risk tolerance. - 9moJames JonesPro MemberInvestor · Collierville, TN 38017 · Member since 2017 · 891 posts · 623 votes
Congrats on the launch. This is one area where being over-insured early is far cheaper than learning the hard way.
At a minimum, most professional PM companies carry:
1. General Liability
This is table stakes. Covers bodily injury, property damage, slip-and-falls, etc. Typically $1M per occurrence / $2M aggregate.
2. Errors & Omissions (E&O)
Arguably the most important policy for PMs. Covers claims related to:
Lease enforcement mistakes
Fair housing violations
Missed notices, improper handling of funds, or admin errors
Many owners won't work with a PM that doesn't carry E&O.
3. Fidelity Bond / Crime Insurance
Protects against employee theft, fraud, or mishandling of owner or tenant funds. This is especially important if you’re holding trust accounts.
4. Workers’ Comp
Required once you have employees. Even if you mainly use contractors, some states still expect coverage depending on how labor is classified.
5. Cyber / Data Breach Insurance
Often overlooked. Covers exposure from:
Online rent payments
Tenant personal data
Banking information
As PMs become more software-driven, this matters more every year.
6. Umbrella Policy
Not required, but highly recommended once you scale. It's relatively cheap protection over your GL and E&O limits.
Important Note
Your insurance should clearly list property management services as the business activity. Generic “real estate services” language can cause claim denials.
Also make sure:
Your management agreement limits liability appropriately
Owners carry their own landlord policies (your insurance does not replace theirs)
Talk to a broker who regularly insures PM companies, not a general commercial agent. The policy language matters as much as the coverage amount.
- Member since 2025 · 10 posts · 7 votes9mo
Thank Y'all! This information gives me a starting point/Idea of what to ask & look for! I appreciate the insight.
- 9moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Quote from @Ashton Smith:
Hi everyone! We’re getting ready to launch our PM company and wanted to see what types of insurance policies other companies carry. If anyone can point us in the right direction on what coverage we should have, I’d really appreciate it. Thanks in advance!
@James Jones is getting a little crazy with his AI! :)
Here's easy summary:
1) E&O - to portect you from lawsuits due to you & staff mistakes.
2) Managed Property Liability: two ways to get
- have property owner add you as "Additionally Insuread" (NOT additional interest!)
- get a master policy and add the owner properties to it (repalces their policies)3) Cyber Insurance - most E&O companies offer as add on. Covers lawsuits over owner & tenant personal info getting out due to oops's and hacking. May also cover your bank account getting drained by hackers.
4) If you have an office you will need general liability, unless landlord offers and adds you to their policy
5) Workers Comp only needed if you have employees
Logical Property Management4.9469 Reviews- Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes9mo
@Drew Sygit Our suggestion is alway that you insure your interest and clients insure theirs. You can certainly ask to be added as an additional insured, but many carriers won't allow it and you are also at the mercy of your client paying their bills. If they slip up and lose coverage then you have a huge exposure.
I would suggest your get off-premise general liability that includes managed locations. This allows you to control your own insurance which will be safer.
- 9moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Quote from @Jared Townsend:
@Drew Sygit Our suggestion is alway that you insure your interest and clients insure theirs. You can certainly ask to be added as an additional insured, but many carriers won't allow it and you are also at the mercy of your client paying their bills. If they slip up and lose coverage then you have a huge exposure.
I would suggest your get off-premise general liability that includes managed locations. This allows you to control your own insurance which will be safer.
Dude, appreciate you trying to help, but go find that policy and bring it to me!
Bet you WON'T find one!
FYI: being added as additionally insured means we get a nonpayment notice, so we can terminate the owner BEFORE we have exposure.
Logical Property Management4.9469 Reviews - Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes9mo
Quote from @Drew Sygit:
Quote from @Jared Townsend:
@Drew Sygit Our suggestion is alway that you insure your interest and clients insure theirs. You can certainly ask to be added as an additional insured, but many carriers won't allow it and you are also at the mercy of your client paying their bills. If they slip up and lose coverage then you have a huge exposure.
I would suggest your get off-premise general liability that includes managed locations. This allows you to control your own insurance which will be safer.
Dude, appreciate you trying to help, but go find that policy and bring it to me!
Bet you WON'T find one!
FYI: being added as additionally insured means we get a nonpayment notice, so we can terminate the owner BEFORE we have exposure.
Sure thing - I'll have my team pull an example for me tomorrow.
Additional Insured adds you as an Insured on the policy meaning you are extended coverage.
Additional Interest is what you are referring to - that does not extend coverage but simply provides notices of renewal, non-payment, etc.
- 9moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
@Drew Sygit Our suggestion is alway that you insure your interest and clients insure theirs. You can certainly ask to be added as an additional insured, but many carriers won't allow it and you are also at the mercy of your client paying their bills. If they slip up and lose coverage then you have a huge exposure.
I would suggest your get off-premise general liability that includes managed locations. This allows you to control your own insurance which will be safer.
Dude, appreciate you trying to help, but go find that policy and bring it to me!
Bet you WON'T find one!
FYI: being added as additionally insured means we get a nonpayment notice, so we can terminate the owner BEFORE we have exposure.
Sure thing - I'll have my team pull an example for me tomorrow.
Additional Insured adds you as an Insured on the policy meaning you are extended coverage.
Additional Interest is what you are referring to - that does not extend coverage but simply provides notices of renewal, non-payment, etc.
Where did I write, "additional interest"?
There's no point in a PMC pursuing that.
We are "Additionally Insured" on 100% of the owner policies of the properties we manage, so we have liability coverage.
- We are also alerted about any lapse coverage.We've even helped a client who was self-insuring their 14 properties, to get liability coverage only, no fire coverage, before we would manage their properties.
It'll interesting what your team comes up with that is NOT a commerical Master Policy for liability coverage on properties a PMC has no ownership interest in...
I just hope you don't keep Fudging my points:)
Logical Property Management4.9469 Reviews - Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes8mo
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
@Drew Sygit Our suggestion is alway that you insure your interest and clients insure theirs. You can certainly ask to be added as an additional insured, but many carriers won't allow it and you are also at the mercy of your client paying their bills. If they slip up and lose coverage then you have a huge exposure.
I would suggest your get off-premise general liability that includes managed locations. This allows you to control your own insurance which will be safer.
Dude, appreciate you trying to help, but go find that policy and bring it to me!
Bet you WON'T find one!
FYI: being added as additionally insured means we get a nonpayment notice, so we can terminate the owner BEFORE we have exposure.
Sure thing - I'll have my team pull an example for me tomorrow.
Additional Insured adds you as an Insured on the policy meaning you are extended coverage.
Additional Interest is what you are referring to - that does not extend coverage but simply provides notices of renewal, non-payment, etc.
Where did I write, "additional interest"?
There's no point in a PMC pursuing that.
We are "Additionally Insured" on 100% of the owner policies of the properties we manage, so we have liability coverage.
- We are also alerted about any lapse coverage.We've even helped a client who was self-insuring their 14 properties, to get liability coverage only, no fire coverage, before we would manage their properties.
It'll interesting what your team comes up with that is NOT a commerical Master Policy for liability coverage on properties a PMC has no ownership interest in...
I just hope you don't keep Fudging my points:)
Sorry for the delayed response - I ended up in the hospital last week with appendicitis.
Now that I'm back though, I spoke with our team that has insured 100's of property managers nationwide about your coverage question. Here is the quickest way I can explain it.
HO8 or DP1 (residential policies) operate on a basic coverage premise. They only cover named perils like fire or lightning. It is the insured's job to prove that their damage was caused by one of these named perils.
An HO3 policy is an open peril policy, meaning that everything is assumed covered unless explicitly excluded. This makes it the insurance carrier's job to prove that the damage was caused by an excluded peril.
These GL policies operate like an open peril policy - it assumes coverage is provided unless explicitly excluded. Most carriers that offer a GL for real estate operations will explicitly exclude managed locations, or require a schedule of locations to include (which is challenging at best to maintain).
The policy we write does not include this exclusion or schedul requirement, therfore assuming that coverage is provided. So its tough to show you where in the policy the coverage is ennumerated because we'd have to show that it is not excluded. How do you show something that isn't there?
Anyways, I hope that explanation is helpful to you. I appreciate the discussion where we can talk the realities and difficulties of properly insuring a management business! If you have further questions I'd be happy to connect you with one of our commercial experts that work with these policies daily. - 8moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
@Drew Sygit Our suggestion is alway that you insure your interest and clients insure theirs. You can certainly ask to be added as an additional insured, but many carriers won't allow it and you are also at the mercy of your client paying their bills. If they slip up and lose coverage then you have a huge exposure.
I would suggest your get off-premise general liability that includes managed locations. This allows you to control your own insurance which will be safer.
Dude, appreciate you trying to help, but go find that policy and bring it to me!
Bet you WON'T find one!
FYI: being added as additionally insured means we get a nonpayment notice, so we can terminate the owner BEFORE we have exposure.
Sure thing - I'll have my team pull an example for me tomorrow.
Additional Insured adds you as an Insured on the policy meaning you are extended coverage.
Additional Interest is what you are referring to - that does not extend coverage but simply provides notices of renewal, non-payment, etc.
Where did I write, "additional interest"?
There's no point in a PMC pursuing that.
We are "Additionally Insured" on 100% of the owner policies of the properties we manage, so we have liability coverage.
- We are also alerted about any lapse coverage.We've even helped a client who was self-insuring their 14 properties, to get liability coverage only, no fire coverage, before we would manage their properties.
It'll interesting what your team comes up with that is NOT a commerical Master Policy for liability coverage on properties a PMC has no ownership interest in...
I just hope you don't keep Fudging my points:)
Sorry for the delayed response - I ended up in the hospital last week with appendicitis.
Now that I'm back though, I spoke with our team that has insured 100's of property managers nationwide about your coverage question. Here is the quickest way I can explain it.
HO8 or DP1 (residential policies) operate on a basic coverage premise. They only cover named perils like fire or lightning. It is the insured's job to prove that their damage was caused by one of these named perils.
An HO3 policy is an open peril policy, meaning that everything is assumed covered unless explicitly excluded. This makes it the insurance carrier's job to prove that the damage was caused by an excluded peril.
These GL policies operate like an open peril policy - it assumes coverage is provided unless explicitly excluded. Most carriers that offer a GL for real estate operations will explicitly exclude managed locations, or require a schedule of locations to include (which is challenging at best to maintain).
The policy we write does not include this exclusion or schedul requirement, therfore assuming that coverage is provided. So its tough to show you where in the policy the coverage is ennumerated because we'd have to show that it is not excluded. How do you show something that isn't there?
Anyways, I hope that explanation is helpful to you. I appreciate the discussion where we can talk the realities and difficulties of properly insuring a management business! If you have further questions I'd be happy to connect you with one of our commercial experts that work with these policies daily.Glad you've recovered quickly!
Here's the challenge that no one has been able to address - and I've asked many "experts" and other PMC managers at PMC conferences:
What policy can a PMC get that will offer liability coverage against tenant "slip & fall" lawsuits with no ownership in said rental property?
The only options given have been to get our own Master Policy to add managed properties to or be added to owners' policies.
How does your HO3 GL policy address this please?
Logical Property Management4.9469 Reviews - Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes8mo
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
@Drew Sygit Our suggestion is alway that you insure your interest and clients insure theirs. You can certainly ask to be added as an additional insured, but many carriers won't allow it and you are also at the mercy of your client paying their bills. If they slip up and lose coverage then you have a huge exposure.
I would suggest your get off-premise general liability that includes managed locations. This allows you to control your own insurance which will be safer.
Dude, appreciate you trying to help, but go find that policy and bring it to me!
Bet you WON'T find one!
FYI: being added as additionally insured means we get a nonpayment notice, so we can terminate the owner BEFORE we have exposure.
Sure thing - I'll have my team pull an example for me tomorrow.
Additional Insured adds you as an Insured on the policy meaning you are extended coverage.
Additional Interest is what you are referring to - that does not extend coverage but simply provides notices of renewal, non-payment, etc.
Where did I write, "additional interest"?
There's no point in a PMC pursuing that.
We are "Additionally Insured" on 100% of the owner policies of the properties we manage, so we have liability coverage.
- We are also alerted about any lapse coverage.We've even helped a client who was self-insuring their 14 properties, to get liability coverage only, no fire coverage, before we would manage their properties.
It'll interesting what your team comes up with that is NOT a commerical Master Policy for liability coverage on properties a PMC has no ownership interest in...
I just hope you don't keep Fudging my points:)
Sorry for the delayed response - I ended up in the hospital last week with appendicitis.
Now that I'm back though, I spoke with our team that has insured 100's of property managers nationwide about your coverage question. Here is the quickest way I can explain it.
HO8 or DP1 (residential policies) operate on a basic coverage premise. They only cover named perils like fire or lightning. It is the insured's job to prove that their damage was caused by one of these named perils.
An HO3 policy is an open peril policy, meaning that everything is assumed covered unless explicitly excluded. This makes it the insurance carrier's job to prove that the damage was caused by an excluded peril.
These GL policies operate like an open peril policy - it assumes coverage is provided unless explicitly excluded. Most carriers that offer a GL for real estate operations will explicitly exclude managed locations, or require a schedule of locations to include (which is challenging at best to maintain).
The policy we write does not include this exclusion or schedul requirement, therfore assuming that coverage is provided. So its tough to show you where in the policy the coverage is ennumerated because we'd have to show that it is not excluded. How do you show something that isn't there?
Anyways, I hope that explanation is helpful to you. I appreciate the discussion where we can talk the realities and difficulties of properly insuring a management business! If you have further questions I'd be happy to connect you with one of our commercial experts that work with these policies daily.Glad you've recovered quickly!
Here's the challenge that no one has been able to address - and I've asked many "experts" and other PMC managers at PMC conferences:
What policy can a PMC get that will offer liability coverage against tenant "slip & fall" lawsuits with no ownership in said rental property?
The only options given have been to get our own Master Policy to add managed properties to or be added to owners' policies.
How does your HO3 GL policy address this please?
Sorry if the example was confusing - the policy is a commercial general liability coverage. The homeowners coverage was just to explain the basic perils vs open perils.
The crux of the issue is that you need to be insured for possible lawsuits wherever you have business activities, which includes your managed locations. You aren't insuring the owner's property; you're insuring against a lawsuit related to your business activities which you do have insurable interest in.You're 100% right - you need to have your own 'master policy' liability only policy. We would set you up business general liability (slip/fall) and professional liability (professionally messed up, think medical malpractice) coverage. The catch is that we are writing it to include 'any managed location' not just explicitly scheduled properties. This removes the hurdle of adding/removing locations as they come and go - this reduces the hassle and likelihood of missing one.
- 8moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
@Drew Sygit Our suggestion is alway that you insure your interest and clients insure theirs. You can certainly ask to be added as an additional insured, but many carriers won't allow it and you are also at the mercy of your client paying their bills. If they slip up and lose coverage then you have a huge exposure.
I would suggest your get off-premise general liability that includes managed locations. This allows you to control your own insurance which will be safer.
Dude, appreciate you trying to help, but go find that policy and bring it to me!
Bet you WON'T find one!
FYI: being added as additionally insured means we get a nonpayment notice, so we can terminate the owner BEFORE we have exposure.
Sure thing - I'll have my team pull an example for me tomorrow.
Additional Insured adds you as an Insured on the policy meaning you are extended coverage.
Additional Interest is what you are referring to - that does not extend coverage but simply provides notices of renewal, non-payment, etc.
Where did I write, "additional interest"?
There's no point in a PMC pursuing that.
We are "Additionally Insured" on 100% of the owner policies of the properties we manage, so we have liability coverage.
- We are also alerted about any lapse coverage.We've even helped a client who was self-insuring their 14 properties, to get liability coverage only, no fire coverage, before we would manage their properties.
It'll interesting what your team comes up with that is NOT a commerical Master Policy for liability coverage on properties a PMC has no ownership interest in...
I just hope you don't keep Fudging my points:)
Sorry for the delayed response - I ended up in the hospital last week with appendicitis.
Now that I'm back though, I spoke with our team that has insured 100's of property managers nationwide about your coverage question. Here is the quickest way I can explain it.
HO8 or DP1 (residential policies) operate on a basic coverage premise. They only cover named perils like fire or lightning. It is the insured's job to prove that their damage was caused by one of these named perils.
An HO3 policy is an open peril policy, meaning that everything is assumed covered unless explicitly excluded. This makes it the insurance carrier's job to prove that the damage was caused by an excluded peril.
These GL policies operate like an open peril policy - it assumes coverage is provided unless explicitly excluded. Most carriers that offer a GL for real estate operations will explicitly exclude managed locations, or require a schedule of locations to include (which is challenging at best to maintain).
The policy we write does not include this exclusion or schedul requirement, therfore assuming that coverage is provided. So its tough to show you where in the policy the coverage is ennumerated because we'd have to show that it is not excluded. How do you show something that isn't there?
Anyways, I hope that explanation is helpful to you. I appreciate the discussion where we can talk the realities and difficulties of properly insuring a management business! If you have further questions I'd be happy to connect you with one of our commercial experts that work with these policies daily.Glad you've recovered quickly!
Here's the challenge that no one has been able to address - and I've asked many "experts" and other PMC managers at PMC conferences:
What policy can a PMC get that will offer liability coverage against tenant "slip & fall" lawsuits with no ownership in said rental property?
The only options given have been to get our own Master Policy to add managed properties to or be added to owners' policies.
How does your HO3 GL policy address this please?
Sorry if the example was confusing - the policy is a commercial general liability coverage. The homeowners coverage was just to explain the basic perils vs open perils.
The crux of the issue is that you need to be insured for possible lawsuits wherever you have business activities, which includes your managed locations. You aren't insuring the owner's property; you're insuring against a lawsuit related to your business activities which you do have insurable interest in.You're 100% right - you need to have your own 'master policy' liability only policy. We would set you up business general liability (slip/fall) and professional liability (professionally messed up, think medical malpractice) coverage. The catch is that we are writing it to include 'any managed location' not just explicitly scheduled properties. This removes the hurdle of adding/removing locations as they come and go - this reduces the hassle and likelihood of missing one.
Yep, that's what I initially posted:)
Logical Property Management4.9469 Reviews - Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes8mo
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
@Drew Sygit Our suggestion is alway that you insure your interest and clients insure theirs. You can certainly ask to be added as an additional insured, but many carriers won't allow it and you are also at the mercy of your client paying their bills. If they slip up and lose coverage then you have a huge exposure.
I would suggest your get off-premise general liability that includes managed locations. This allows you to control your own insurance which will be safer.
Dude, appreciate you trying to help, but go find that policy and bring it to me!
Bet you WON'T find one!
FYI: being added as additionally insured means we get a nonpayment notice, so we can terminate the owner BEFORE we have exposure.
Sure thing - I'll have my team pull an example for me tomorrow.
Additional Insured adds you as an Insured on the policy meaning you are extended coverage.
Additional Interest is what you are referring to - that does not extend coverage but simply provides notices of renewal, non-payment, etc.
Where did I write, "additional interest"?
There's no point in a PMC pursuing that.
We are "Additionally Insured" on 100% of the owner policies of the properties we manage, so we have liability coverage.
- We are also alerted about any lapse coverage.We've even helped a client who was self-insuring their 14 properties, to get liability coverage only, no fire coverage, before we would manage their properties.
It'll interesting what your team comes up with that is NOT a commerical Master Policy for liability coverage on properties a PMC has no ownership interest in...
I just hope you don't keep Fudging my points:)
Sorry for the delayed response - I ended up in the hospital last week with appendicitis.
Now that I'm back though, I spoke with our team that has insured 100's of property managers nationwide about your coverage question. Here is the quickest way I can explain it.
HO8 or DP1 (residential policies) operate on a basic coverage premise. They only cover named perils like fire or lightning. It is the insured's job to prove that their damage was caused by one of these named perils.
An HO3 policy is an open peril policy, meaning that everything is assumed covered unless explicitly excluded. This makes it the insurance carrier's job to prove that the damage was caused by an excluded peril.
These GL policies operate like an open peril policy - it assumes coverage is provided unless explicitly excluded. Most carriers that offer a GL for real estate operations will explicitly exclude managed locations, or require a schedule of locations to include (which is challenging at best to maintain).
The policy we write does not include this exclusion or schedul requirement, therfore assuming that coverage is provided. So its tough to show you where in the policy the coverage is ennumerated because we'd have to show that it is not excluded. How do you show something that isn't there?
Anyways, I hope that explanation is helpful to you. I appreciate the discussion where we can talk the realities and difficulties of properly insuring a management business! If you have further questions I'd be happy to connect you with one of our commercial experts that work with these policies daily.Glad you've recovered quickly!
Here's the challenge that no one has been able to address - and I've asked many "experts" and other PMC managers at PMC conferences:
What policy can a PMC get that will offer liability coverage against tenant "slip & fall" lawsuits with no ownership in said rental property?
The only options given have been to get our own Master Policy to add managed properties to or be added to owners' policies.
How does your HO3 GL policy address this please?
Sorry if the example was confusing - the policy is a commercial general liability coverage. The homeowners coverage was just to explain the basic perils vs open perils.
The crux of the issue is that you need to be insured for possible lawsuits wherever you have business activities, which includes your managed locations. You aren't insuring the owner's property; you're insuring against a lawsuit related to your business activities which you do have insurable interest in.You're 100% right - you need to have your own 'master policy' liability only policy. We would set you up business general liability (slip/fall) and professional liability (professionally messed up, think medical malpractice) coverage. The catch is that we are writing it to include 'any managed location' not just explicitly scheduled properties. This removes the hurdle of adding/removing locations as they come and go - this reduces the hassle and likelihood of missing one.
Yep, that's what I initially posted:)
My argument is that adding yourself as additional insured to owner's policy is risky at best and that there are GL policies that don't have the requirement to add owner's property addresses to them. I agree with the rest of your points!
- 8moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
Quote from @Drew Sygit:
Quote from @Jared Townsend:
@Drew Sygit Our suggestion is alway that you insure your interest and clients insure theirs. You can certainly ask to be added as an additional insured, but many carriers won't allow it and you are also at the mercy of your client paying their bills. If they slip up and lose coverage then you have a huge exposure.
I would suggest your get off-premise general liability that includes managed locations. This allows you to control your own insurance which will be safer.
Dude, appreciate you trying to help, but go find that policy and bring it to me!
Bet you WON'T find one!
FYI: being added as additionally insured means we get a nonpayment notice, so we can terminate the owner BEFORE we have exposure.
Sure thing - I'll have my team pull an example for me tomorrow.
Additional Insured adds you as an Insured on the policy meaning you are extended coverage.
Additional Interest is what you are referring to - that does not extend coverage but simply provides notices of renewal, non-payment, etc.
Where did I write, "additional interest"?
There's no point in a PMC pursuing that.
We are "Additionally Insured" on 100% of the owner policies of the properties we manage, so we have liability coverage.
- We are also alerted about any lapse coverage.We've even helped a client who was self-insuring their 14 properties, to get liability coverage only, no fire coverage, before we would manage their properties.
It'll interesting what your team comes up with that is NOT a commerical Master Policy for liability coverage on properties a PMC has no ownership interest in...
I just hope you don't keep Fudging my points:)
Sorry for the delayed response - I ended up in the hospital last week with appendicitis.
Now that I'm back though, I spoke with our team that has insured 100's of property managers nationwide about your coverage question. Here is the quickest way I can explain it.
HO8 or DP1 (residential policies) operate on a basic coverage premise. They only cover named perils like fire or lightning. It is the insured's job to prove that their damage was caused by one of these named perils.
An HO3 policy is an open peril policy, meaning that everything is assumed covered unless explicitly excluded. This makes it the insurance carrier's job to prove that the damage was caused by an excluded peril.
These GL policies operate like an open peril policy - it assumes coverage is provided unless explicitly excluded. Most carriers that offer a GL for real estate operations will explicitly exclude managed locations, or require a schedule of locations to include (which is challenging at best to maintain).
The policy we write does not include this exclusion or schedul requirement, therfore assuming that coverage is provided. So its tough to show you where in the policy the coverage is ennumerated because we'd have to show that it is not excluded. How do you show something that isn't there?
Anyways, I hope that explanation is helpful to you. I appreciate the discussion where we can talk the realities and difficulties of properly insuring a management business! If you have further questions I'd be happy to connect you with one of our commercial experts that work with these policies daily.Glad you've recovered quickly!
Here's the challenge that no one has been able to address - and I've asked many "experts" and other PMC managers at PMC conferences:
What policy can a PMC get that will offer liability coverage against tenant "slip & fall" lawsuits with no ownership in said rental property?
The only options given have been to get our own Master Policy to add managed properties to or be added to owners' policies.
How does your HO3 GL policy address this please?
Sorry if the example was confusing - the policy is a commercial general liability coverage. The homeowners coverage was just to explain the basic perils vs open perils.
The crux of the issue is that you need to be insured for possible lawsuits wherever you have business activities, which includes your managed locations. You aren't insuring the owner's property; you're insuring against a lawsuit related to your business activities which you do have insurable interest in.You're 100% right - you need to have your own 'master policy' liability only policy. We would set you up business general liability (slip/fall) and professional liability (professionally messed up, think medical malpractice) coverage. The catch is that we are writing it to include 'any managed location' not just explicitly scheduled properties. This removes the hurdle of adding/removing locations as they come and go - this reduces the hassle and likelihood of missing one.
Yep, that's what I initially posted:)
My argument is that adding yourself as additional insured to owner's policy is risky at best and that there are GL policies that don't have the requirement to add owner's property addresses to them. I agree with the rest of your points!
Gotcha 😄
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- Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes9mo
You said additional insured gives you non-payment notices, which it does, but implies that that is all it does. I was trying to clarify for anyone else reading this the important difference between additional interest and additional insured, that's all.
Trusting your clients to maintain insurance on your behalf feels like a risk I would never take, but to each their own.Its not about ownership, its about insurable interest. When you enter a contractual relationship to manage a home you are also creating insurable interest.
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