All Forum Posts by: Hunter McNeill

I run a PM company with about 300 doors under management. Here's a breakdown of what this clause is and why it's important:

Additional Insured means your company is listed on the policy by name, and will be defended alongside the property owner in the case of any legal action.

As a property manager, you are an Agent of the property owner. If a personal injury occurs for whatever reason, you (the property manager) are almost always the first target, in place of the owner. If a legal claim takes place, it is highly likely both the property owner and property manager will be named co-defendants. Having the insurance coverage extends to both parties, creates a unified defense with one insurance company defending both parties. This streamlines the defense, reducing legal expenses which the owner (or their insurance company) is ultimately responsible for. 

So 

1. Is this required in general?  It's a good practice, but not required by law (at least not in AL)

2. How do you explain this section to your clients?  "If something were to happen at the proeprty, having the PM added to the insurance will create a unified front and will be more likely that we will be protected".  It's in their best interest as well to have you on their insurance.

3. What does it actually mean and what does it protect against?  See above.  

I haven't been suepr strict about having every owner get that to us prior to starting management, since we all know how challenging PM is, even without the additional paperwork.  But it is something that you should chip away at, especially for the new clients that you onboard.

Hope that helps!

@Lana Lee there are only two reasons for babysitting a PM: you are a micromanager or the PM is incapable of demonstrating their worth. I'll assume it's the latter.

When a Landlord asks me to manage a property, I can show them how I score applicants. My scoring criteria is clearly spelled out in writing and I use an objective score sheet to determine approval or denial. Once I show the Landlord my process, there is no need for them to question why I approved a certain individual because they already know my screening was stringent, fair, and objective. If your PM is unable to demonstrate their process to your satisfaction then I suggest you either help train them to do better or find another PM.

People turn their money over to investors all the time. Do they require the investor to call before making any investment decisions? Of course not! They trust the investor to know the business far better than they ever could so he is left alone to do his job. The same is true with property management. Hire correctly and your rentals should be very hands-off.