Insurance - Property management company

4 Replies

I'm currently interviewing property management companies for a 16 unit apartment building that I'm purchasing.  What types of insurance/limits should I be looking for them to have?

@John Volpe They should have a professional liability policy, or what is sometimes called Errors & Omissions (E&O). In addition, I think they should have general liability policy.

My assumption on coverage would depend on how big their business is. If they only manage 100 units, the liability coverage would be very different than say if they manage 1,000 units. Also the local real estate association might require a set minimum. 

When I interviewed my property manager, I wasn't too concerned about the amount of coverage as she was also a licensed Broker in good standing. I was more concerned she had coverage.  

Hopefully an insurance agent can chime in with their thoughts, and perhaps a property manager can chime in with coverage limits they feel are the minimum needed/required.

They will have to have insurance in order to run their business, they will probably require you to have a million dollar policy, they should at least have the same as well as an error and omission  policy for their business. your commercial policy should have a clause in it that names them as additionally insured, so if they ask to have them added as additionally insured, you may not have to, it may already be in the policy, check with your insurance agent. if they use contractors, make sure they each contractor they use at your properties has a certificate of insurance and that their policies add you as additionally insured.

@Andrew @Patrick, thank you for the information, it was very helpful

@John Volpe here are the 5 insurance coverage's that that protect your interests when using a PM.


  1. Professional Liability – protects you from tenant claims of discrimination and wrongful eviction brought on by your property manager’s actions
  2. Errors & Omissions – protects you from property manager making a wrong decision that costs you money (enables you to file a claim to recoup your costs)
  3. Workers Compensation – protects you against personal injury claims from the property manager’s employees and subcontractors when they work on your property
  4. General Liability – protects you against property damage or bodily injuries caused by your property manager’s employees and subcontractors
  5. Fiduciary/Crime – protects you against the mishandling or theft of your money that’s in the care, custody and control of your property manager

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