Claims and lawsuits against property managers are a common occurrence. As the owner of a property management company, failing to have the proper insurance protection in place can leave you and your business exposed to unnecessary financial risk. As well, your clients are relying on you to carry the proper insurance to protect their assets. Acquiring the appropriate insurance coverage to protect your business, yourself, and the properties you manage is essential when establishing yourself as a property manager.
Below is a quick rundown of the types of insurance coverage you need as the owner of a property management company.
General liability insurance
If you make frequent visits to clients, or if clients visit you, it is important to have general liability insurance. This type of insurance covers claims against you and your business from another party who alleges you are at fault for their personal injury or property damage. It is designed to cover medical bills, repairs and replacements, compensation, and legal costs.
This insurance can also save your reputation if you are sued by a renter for some other reason that has the potential to mar your reputation, and thus threaten your livelihood. This coverage can get you the legal representation you need and pay any damages plus legal fees involved in the case.
Business personal property insurance
Adding business personal property insurance to your policy package protects any movable item in your office space, including filing cabinets, desks, chairs, etc. It also covers mobile devices when you are outside of the office visiting owners and renters or viewing properties.
Professional liability insurance
As a property manager it is important to have professional liability insurance to provide you with protection against any omissions or errors you make in the performance of your services and in your business relationships with landlords and renters. If your client loses money due to a mistake on your part, you can be sued – in fact, you may face a lawsuit even if you have not made an error. This insurance coverage is also often referred to as errors and omissions, or E&O coverage. It can also cover you for work you have performed for others in the past in the event that someone decides to sue you for an old error or alleged error on your part.
When working as a property manager, it is also necessary to determine whether you or the property owner is responsible for insuring the property. Even if it is the property owner, it is important to make sure that the proper insurance coverage is obtained in the proper amounts. This will save a lot of heartache after a claim.
Workers’ compensation insurance
Workers’ compensation insurance is required for certain employers in TN. It is generally required under the law for companies having five or more employees regardless of fault. In some industries in the state, employers with only one employee are required to carry this insurance, unless they are specifically exempted. Workers’ comp can save your business from financial ruin in the event of a workplace injury to one of your employees. The insurance covers a portion of the workers lost wages, as well as medical expenses.
Cyber liability insurance for property managers
Cyber liability insurance is also referred to as cyber risk insurance and data breach insurance. As a property manager, you likely store significant amounts of confidential electronic information, including personal data on tenants and owners. You may have a website and use email. If this is the case, you and your business are potential targets for cybercrime.
Property managers can receive the following coverage through cyber liability insurance:
- Investigative costs involving a cyberattack and informing your customers
- Lost income if the attack prevents you from conducting business
- The repair and restoration of your website and data
- Legal damages and fees if you face a lawsuit for losing private data of another party
Your business will have to cover these costs if you do not have coverage and you are hit with a cyberattack.
Getting sufficient property management insurance coverage
Generally it is optimal to have insurance coverage for your business, your renters, and your clients, as well as the properties you manage. However, the requirements among property management business owners vary.
It is often better to err on the side of overestimating the coverage you need. The compensation, attorneys’ fees, and court costs can skyrocket in the event of a lawsuit. Purchasing as much coverage as you can realistically afford will help ensure you, your assets, and your reputation are protected when disaster strikes.
If you are having problems with an insurance claim you submitted, or are facing an insurance dispute, our attorneys at McWherter Scott & Bobbitt in Tennessee can help. We can fight for your right to obtain the fair financial compensation you are owed for your losses. We serve our clients from offices in Nashville, Memphis, Knoxville, Chattanooga, and Jackson. To schedule a free, no-obligation consultation about your case, give Brandon McWherter, Clint Scott or Jonathan Bobbitt a call today at 731-664-1340, or complete our contact form.