Yes. Standard practice. It's for liability coverage since that PM will have keys to enter the house and essentially will be assisting you in conducting business. It doesn't affect your insurance rate.
@Eric H. I'll second that. this is common practice.
Most insurance companies will have the PM automatically added as an Additional Insured within your policy, so you do not incur a $25 or $50 surcharge.
I'd be happy to hear an insurance agent chime in here but my understanding is most insurance companies won't even do this anymore. I know of several large management companies on here who don't require it due to that. I am a property manager myself and don't require it.
@Peter T. Most insurance companies allow it, but it may also be the state law that has the final say.
Same goes for tenants adding the Landlord as an Additional Insured on the tenants renters policy. Some states allow it, others don't.