Property Manager wants to be named as “Additionally Insured”

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Property Manager wants to be named as “Additionally Insured”

Matthew McNeil
Rental Property Investor · Boise/Portland · Member since 2017 · 709 posts · 742 votes

I'm the primary insured, but my PM wants to be included on Liability policy.  Has anyone heard of this?

My insurer refused to accommodate the request saying they've had problems with PMs named in their policies, although they didn't elaborate.  

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
7y

@Matthew McNeil you guys are wrong. 

The PM is asking to be added as "Additional Insured" or "Additional Interest" to your liability policy. if the house burns down or the roof blows off, the PM will not receive a dime.

Let's say your tenant falls and breaks a leg. Their attorney will sue everybody and anybody, which means the Landlord and the PM both. If the PM is named as "Additional Insured" on your policy, your insurance company will represent both you and the PM. If the PM is not named, your insurance company will represent you and the PM insurance company will represent him. This increases the likelihood that your insurer and the PM insurer may fight against each other and it weakens the defense for both parties.

Naming the PM on your policy is simple, doesn't cost a dime, and does not change your protection in any way except to strengthen it. I manage over 350 rentals and only one insurance company refuses to add us as Additional Interest on the policy. State Farm, USAA, Farmers, AllState, and others have no problem with it.

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  • Heather Frusco
    Investor · Union, NJ · Member since 2020 · 81 posts · 312 votes
    6y

    @Ricardo R. love it.... and thank you for sharing. Class 'C' landlords and especially #12 listed on that list are exactly why you have some on here trying every which way and so hard to make a point even though everyone which has more experience and has been there are trying to tell them otherwise, but to each their own - doctors with a phD in google medical studies, I guess. Thank for the article and something for some here worth reading.   

    https://www.biggerpockets.com/forums/52/topics/402958-investors---are-you-a-c-class-landlord?page=1

    @Ralph R. @Guy Gimenez

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  • Guy Gimenez
    Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes
    6y

     Laughable. Those who do not recognize their mistakes are bound to repeat them. 

    @Heather Frusco

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  • Ralph R.
    Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
    6y

    @Heather Frusco if you say so

    0Reply
  • Greg Martin
    Investor · Valrico, FL · Member since 2012 · 32 posts · 9 votes
    3y

    Wow, just doing some research and the amount if incorrect info in this thread is shocking.

    1)  There's a lot of different types of policies.  If you have a DP3 landlord policy, it usually has property and liability together on 1 policy and endorsements may impact both parts.  Others have commercial property and separate commercial liability. 
    2)  Insurance companies have different verbiage in their policies.  Something true for 1 company may not be the same for another company.

    3)  Additional Insured and Additional Interest are often used interchangeably through this thread.  Some companies automatically add Additional Interest and don't differentiate.  You have to look at your actual endorsements to confirm what was added, but they aren't interchangeable and they aren't the same.

    *End rant*

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  • Matthew Cordova
    Investor · Albquerque New Mexico · Member since 2023 · 4 posts · 0 votes
    2y
    Quote from @Leah Slaughter:

    This is actually part of the standard property management contract from the Association in our state and is a requirement for many if not most property management companies here. Not sure about all states, but definitely common in Texas and it’s for our own protection. As a landlord you have a responsibility to indemnify the property manager when they are sued in lieu of or along with you under the contract, so in a case like a frivolous tenant suing for a slip and fall without negligence, you want that insurance defending you both or you’re going to be in the hook for the PM’s attorney fees. 


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  • Matthew Cordova
    Investor · Albquerque New Mexico · Member since 2023 · 4 posts · 0 votes
    2y
    Quote from @Leah Slaughter:

    This is actually part of the standard property management contract from the Association in our state and is a requirement for many if not most property management companies here. Not sure about all states, but definitely common in Texas and it’s for our own protection. As a landlord you have a responsibility to indemnify the property manager when they are sued in lieu of or along with you under the contract, so in a case like a frivolous tenant suing for a slip and fall without negligence, you want that insurance defending you both or you’re going to be in the hook for the PM’s attorney fees. 

    Is it a law or just a code requirement? My pm company in TEXAS never asked me to add them now i’m worried. Thanks 
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