Additional Insured for Property Manager
Fremont, CA · Member since 2017 · 46 posts · 7 votes
Additional Insured for Property Manager
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Property Manager · Columbus, OH · Member since 2012 · 309 posts · 275 votes
6yJust to add some more meat to this, here's a ton of info on which carriers allow this. This is copied and pasted from a NARPM discussion thread from a few years back. Credit is due to original posters; the below is not my info but posted for reference.
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Our company has an administrative person dedicated to making sure our owner and tenant insurance policies are current and in compliance. Here are some things we have learned which may be helpful to other management companies:
State Farm will name management companies as additional insured on the declaration pages and they will name management companies on condo policies as well as single-family homes and townhouses.
SAFECO policies will name management companies.
Allstate will not list management companies as additional insured for condo’s/apartments only. For townhouses and single-family homes, if the owners have a Landlord Package Policy and we are listed as “additional interest”, we are covered. In the full policy copy the owner receives, the following statement shows we are covered: section 6. “Insured person(s)” e) any person or organization while acting as your real estate manager for the residence premises.”
For Erie policies, it depends on what type of policy they have. The older Ultrasure policies automatically covered management companies but these policies are being phased out. A new policy (replacing the Ultrasure) is called the Ultra Pack Plus and is a commercial policy which can name management companies. Some agencies will list the management companies on the Erie Secure policies and others will not (it seems to depend on their underwriters).
USAA policies usually show us as covered if we are listed as “Real Estate Manager”. It is always a good policy to doublecheck.
For companies who only list management companies as additional insured internally, I have found that they will often issue a “certificate of insurance” if requested, that will list the management company for their files.
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Century National uses the additionally insured endorsement codes: DL-2410 and DP-0441 - section 2 only coverage L and M.
American National uses the additionally insured endorsement SD 9041 0989
State Farm uses the endorsement code: “Option AI” and the declaration page should list the property management company as “Additional Insured-Section II only”.
USAA uses the additionally insured endorsement DP-41 but this code only shows on the homeowner's policy not the declaration page received by the management company
CSE Insurance Group uses the endorsement code D041ST1
First American P+C: The property manager needs to be listed on the second page of the declarations under Additional Interest/Additional Insured with the words “Addtl Insrd” next to their company name. If the words "Addtl Insrd" are not written then the property manager is only an additional interest.
American Family Insurance: uses the additionally insured endorsement BP 04 02 01 06
Based on my research the following insurance carriers don’t offer the additionally insured endorsement for property managers: AAA, Geico, Progressive, Allstate, Liberty Mutual.
Farmers agents have told me they do offer the additionally insured endorsement but it only shows on the insurance agents internal files (not on the homeowner or property manager's dec page) so I'm not 100% confident I would be defended correctly if there was a lawsuit.
13 Replies
- Investor · Columbus, OH · Member since 2020 · 28 posts · 20 votes6y
That's an... interesting request. Did they say why they need to be listed as additional insured on your policy? I can definitely understand why carriers wouldn't allow that in this situation. The property manager should have their own policy for general liability, and they have no insurable interest in your property physically.
- Fremont, CA · Member since 2017 · 46 posts · 7 votes6y
I saw a lot discussion about whether to put property manager as additional insured. Looks many discussion and not uncommon, for example:
- Investor · Columbus, OH · Member since 2020 · 28 posts · 20 votes6y
Personally, I'd make sure they have a REALLY good reason to need to be Additional Insured. I'd have no issues adding them as Additional Interest, if they want to make sure they're aware if the policy cancels, but they'd have to have a really, really good reason to need to be an insured. Adding an additional insured to a policy gives them coverage that non-insureds don't have, which is likely what the carriers you're talking to are concerned about as well.
- Fremont, CA · Member since 2017 · 46 posts · 7 votes6y
Thanks a lot for the suggestion. I think I will need to talk with my property manager.
- Investor · Columbus, OH · Member since 2020 · 28 posts · 20 votes6y
No problem at all! I hope you get it worked out, one way or another!
- Property Manager · Columbus, OH · Member since 2012 · 309 posts · 275 votes6y
This is standard practice and most good property managers will require it. We do, and it's required in turn by our own general liability insurance carrier.
- Property Manager · Columbus, OH · Member since 2012 · 309 posts · 275 votes6y
Just to add some more meat to this, here's a ton of info on which carriers allow this. This is copied and pasted from a NARPM discussion thread from a few years back. Credit is due to original posters; the below is not my info but posted for reference.
---
Our company has an administrative person dedicated to making sure our owner and tenant insurance policies are current and in compliance. Here are some things we have learned which may be helpful to other management companies:
State Farm will name management companies as additional insured on the declaration pages and they will name management companies on condo policies as well as single-family homes and townhouses.
SAFECO policies will name management companies.
Allstate will not list management companies as additional insured for condo’s/apartments only. For townhouses and single-family homes, if the owners have a Landlord Package Policy and we are listed as “additional interest”, we are covered. In the full policy copy the owner receives, the following statement shows we are covered: section 6. “Insured person(s)” e) any person or organization while acting as your real estate manager for the residence premises.”
For Erie policies, it depends on what type of policy they have. The older Ultrasure policies automatically covered management companies but these policies are being phased out. A new policy (replacing the Ultrasure) is called the Ultra Pack Plus and is a commercial policy which can name management companies. Some agencies will list the management companies on the Erie Secure policies and others will not (it seems to depend on their underwriters).
USAA policies usually show us as covered if we are listed as “Real Estate Manager”. It is always a good policy to doublecheck.
For companies who only list management companies as additional insured internally, I have found that they will often issue a “certificate of insurance” if requested, that will list the management company for their files.
-----
Century National uses the additionally insured endorsement codes: DL-2410 and DP-0441 - section 2 only coverage L and M.
American National uses the additionally insured endorsement SD 9041 0989
State Farm uses the endorsement code: “Option AI” and the declaration page should list the property management company as “Additional Insured-Section II only”.
USAA uses the additionally insured endorsement DP-41 but this code only shows on the homeowner's policy not the declaration page received by the management company
CSE Insurance Group uses the endorsement code D041ST1
First American P+C: The property manager needs to be listed on the second page of the declarations under Additional Interest/Additional Insured with the words “Addtl Insrd” next to their company name. If the words "Addtl Insrd" are not written then the property manager is only an additional interest.
American Family Insurance: uses the additionally insured endorsement BP 04 02 01 06
Based on my research the following insurance carriers don’t offer the additionally insured endorsement for property managers: AAA, Geico, Progressive, Allstate, Liberty Mutual.
Farmers agents have told me they do offer the additionally insured endorsement but it only shows on the insurance agents internal files (not on the homeowner or property manager's dec page) so I'm not 100% confident I would be defended correctly if there was a lawsuit.
- Investor · Columbus, OH · Member since 2020 · 28 posts · 20 votes6y
Hey Peter, thanks for weighing in! Could you help me understand the need for being listed as Additional Insured? I get why the carrier would want another policy to help offset the total risk, but I can see the potential for a lot of confusion (and, potentially, declined claims) if a PM is AI on the rental policy.
- Investor · Columbus, OH · Member since 2020 · 28 posts · 20 votes6y
Oh, wait, just had a thought. I've been considering this all from a Dwelling Fire point of view. But your GL carrier is asking for the AI endorsement, which would likely mean they're looking for it on the liability policy and don't care about the property? That's where I'm getting hung up - a PM has no insurable interest in the property itself, but I can see times where you could be named in a liability lawsuit resulting from a landlord's neglect of a property and it wouldn't make sense for their own policy to be in force for that.
- 6yJason BottPro MemberInsurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
@Jason DeVelvis 2 comments on this that should add some clarity.
1) It's standard practice for the PM to be added as Additional Insured (AI) when possible. The PM is the main contact for the renter, so when there is a Liability claim, it is usually submitted right to the PM and naming the PM as the responsible party. It is much easier the PM to tender that claim right to the landlord's insurance instead of going through the PM's insurance first only to be passed on to the landlords policy. The AI endorsement is what makes it possible for them to do this.
2) Insurance companies are all over the board on when they will allow the AI endorsement to be used. Many times it is a reflection of the law in that particular state and if the insurance carrier feels they can safely extend the Additional Insured status without being pulled into additional claims from the PM's business who is not the insurance carriers client.
- Investor · Columbus, OH · Member since 2020 · 28 posts · 20 votes6y
Thanks Jason! #1 makes a ton of sense, and #2 was really where my mind went. It's been a few years since I was actively selling insurance, but I ran through all the "worst case" carrier scenarios that my UWs would have relayed to me if I'd asked them to add a AI to a policy like this for a client. However, I can also see why the PM and PM's carrier would want to be able to file claims on the landlord's policy when it was warranted, as well. Which, I suppose, is why carriers are all over the board :)
Good to have front of mind, though, as I'm considering working with a PM so I'll want to make sure my policies are lined up properly to allow for an AI before I go down that path, to save us both time.
Thanks for helping me think through this, everyone!
- Fremont, CA · Member since 2017 · 46 posts · 7 votes6y
Thanks a lot @Peter Lohmann. So what property manager is looking for is actually that they are covered for liability? I saw my carrier actually extend liability to property manager, probably that is what property manager is looking for?
Thanks @Jason Bott and @Jason DeVelvis for the discussion.
- 6yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
This is America, a personal injury attorney will sue EVERY party they can find in an effort to get every dollar of settlement they can.
Also, we've been looking for a reasonable liability policy that would insure us on properties we have 0% interest in. No luck.
So, that leaves us with requiring property owner clients to add us as an additionally insured to their rental property insurance policies for liability purposes only. We don't really care about anything else about the policy.
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