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The Importance of Professional Liability Insurance for Property Managers

The Importance of Professional Liability Insurance for Property Managers

The Importance of Professional Liability Insurance for Property Managers

Due to the nature of their profession – working with people, property, and all that the two entail – it is imperative that property managers protect themselves and their operations with the right insurance coverage. Property management cases are one of the most common forms of claim brought against real estate practitioners, as well as one of the areas with the highest damage awards. One of the most important forms of coverage is professional liability insurance, which will protect property managers from some of the most frequent claims against those working in that profession.

The Most Frequent Claims

Here is just a glimpse at the wide variety of claims that property managers could potentially experience at some point in their career:

  • Violation of the Fair Housing Act
  • Discrimination in renting
  • Wrongful eviction
  • Failure to perform necessary repairs
  • Failure to adequately maintain the property in order to prevent injury or damage
  • Failure to properly screen rental applicants
  • Failure to maintain accurate rent receipts and records
  • Negligence
  • Invasion of privacy

The Need for Professional Liability Insurance

Professional liability (or, specifically, errors & omissions) insurance is necessary to provide coverage where property insurance or directors & officers insurance may fail. It is a common mistake for property managers or property management companies to believe that property insurance, flood insurance, commercial general liability insurance, or other similar policies would provide the necessary coverage, but that is not the case. Most general liability policies, for example, only cover claims of bodily injury, property damage, personal injury, and advertising injury.

As seen above, many of the issues that arise relate to mistakes made by the property management, and may not be as simple as cases of property damage incurred in a hurricane or a resident being injured on the premises. Professional liability insurance fills in the coverage gaps left by the more standard policies, and can help a property management company (as with any industry providing a specialized service) against claims of wrongful acts, negligence, or losses specifically incurred as a result of their services.

About Axis Insurance Services

Axis Insurance Services specializes in providing employers with EPLI coverage and would be happy to discuss this must-have protection with you, particularly critical in today’s litigious environment. Just give us a call at (201) 847-9175.

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Blogged on: February 26, 2018 by Mike Smith
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