Property management insurance frees you up to carry out your job quickly and efficiently. This is because you have peace of mind. However, the reality is that many property managers are under extreme stress. Rather than face the cause, they have grown used to living with it.
One of the core sources of their stress is a black cloud of fear lurking at the back of their minds. They are afraid of a law suit threatening their personal assets. Sadly, for many, lawsuits and claims could become their reality.
Is this you? What can you do?
Our society is strong on litigation. Because of this it seems weird that independent property managers have not protected their small businesses. Either they haven’t got around to getting insurance coverage, or they think it is too expensive. It seems as though they just haven’t considered what could happen.
Property management insurance can be a gray area. Ultimately, responsibility and liability belongs to the property owners. However, if you are a property manager, you assume a certain level of responsibility for the daily operations of someone else’s property.
Say you are an employee of a rental complex corporation or a property management firm. You receive a payroll check. You probably don’t need any liability coverage. However, most property management professionals are independent contractors. If that is you, then you are a small business owner. A business, no matter what size, needs protection.
If you are starting out in the business of property management, then this is a message for you. Before you sign any property management contracts,secure small business liability coverage. Rather than losing everything, coverage like this will protect your financial assets from lawsuits and judgments.
The responsibilities of a property management professional include background checks of potential renters. You must make sure they meet the expected standards. Imagine leasing an apartment to someone with a criminal background. If he commits a crime (including bodily injury or property damage) the renters and property owners will be looking at you. Even if that criminal record didn’t show up on reports!
It’s also up to you to respond to the renters’ requests. The building may need repairs. If these don’t happen fast enough and someone gets hurt, you’ll bear the responsibility.
Property managers face a lot of challenges when dealing with renters. For example, you are in charge of rent collection. Did you pre-qualify the apartment renter accurately to assure he or she can afford the rent? You must also be careful of wrongful eviction.
As the professional property manager, you are often at risk of overlooking something. E&O insurance (errors and omissions insurance) is the type of insurance coverage designed to protect property managers. Property management insurance guards against both the fear and the reality of mishaps and mistakes that accompany a busy life in the real estate industry.
As the property manager, you assume a great deal of responsibility for the safety of the people who live at or visit the property. Each task property managers face carries risk of liability. Luckily, it is rare that anyone responds to mistakes or oversights with a lawsuit. Most will appreciate a job well done.
Still, it only takes one. We recommend that you put liability coverage in place. Do this as soon as you possibly can. As a minimum, secure small business property management insurance. Your coverage should include general liability insurance. Circumstances may dictate additional insurance policies. Advice and assistance from an experienced insurance agent will ensure that you have the right type of insurance coverage.
Once your personal assets are protected, you can turn your mind to being the property management professional instead of the liability police. You’ll know there are attorneys are to represent you if somebody does perceive negligence and file a lawsuit. Your liability coverage can cover the costs associated with such a lawsuit. To find out more about the best insurance coverage for Property Managers, contact John today!
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