Claims and suits against property managers are on the rise. Staying out of court is getting harder and defense costs can run to $100,000 or more.
But lawsuits don’t just hurt financially, do they? They damage your reputation. And as a property manager, your reputation is your most priceless asset.
You know you need protection. But with so many different kinds of insurance for property managers out there, it can be hard to figure out exactly what you need.
It takes time, too. And that’s better spent on your business.
So here’s a quick rundown of what you need, why you need it, and tips for getting the right insurance plan:
1) General liability insurance for property managers
If you visit clients, or they visit you, you need general liability insurance. It’s coverage for claims against your business if someone gets hurt, or their property is damaged, and it’s your fault.
Think about it. All it takes is spilling your coffee over a landlord’s new laptop, or a prospective renter tripping over a computer cable in your office to find yourself facing a claim. Or worse, a lawsuit.
General liability insurance can cover repairs and replacements, medical bills, legal costs and compensation.
And if that’s not enough to convince you it’s coverage worth having, it’s a reputation-restorer, too.
Say you’re overheard making some not-so-nice remark about a renter. It gets back to them and they sue you. Your coverage can get you a defense attorney and pay your legal fees plus damages.
2) Professional liability insurance for property managers
It’s in the name. You need professional liability insurance because, as a property manager, you’re a professional. You provide a service to landlords and renters using your expertise.
Unfortunately, that means if you make an error, or omit something and it costs your client money, they could sue you. In fact, you can be sued even when you haven’t made a mistake.
What’s confusing, is that professional liability insurance is also known as Errors and Omissions insurance – or E&O, for short. What matters, is they do the same thing.
Whether you’re at fault, or not, your coverage gets you an attorney and can pay your legal expenses, plus any damages you’re liable for. And because it can also cover work you’ve done in the past, you won’t need to worry about past errors coming back to bite you.
3) Cyber liability insurance for property managers
Cyber Risk insurance, data breach insurance, cyber liability insurance…they’re all names for the same coverage. You should seriously think about getting it.
Why? Because as a property manager, you electronically store confidential, personal data on owners and tenants. You use email and you probably have a website. That makes you a target for cybercriminals.
And if you think your firm’s too small to be at risk, think again.
A whopping 85% of data breaches are at small businesses and 60% of these shut down within six months of the attack.
Cyber liability insurance for property managers can cover:
– the costs of investigating a cyber attack and telling your customers
- repairing and restoring your website and data
- any income lost if the attack stops you from doing business
- legal fees and damages if you’re sued for losing someone’s private data
If you don’t have cyber liability coverage and you’re the victim of a cyber-attack, your business will have to fund this. No wonder so many shut down.
Getting the right property management insurance plan
As a general rule, you need coverage for your business, your clients, your renters and the properties you manage. But every property management business is different. That means your insurance requirements are, too.
Find a broker who gets this and can customize your coverage to suit your exact needs.
Before you get in touch, have the answer to these questions ready. It’ll speed things up.
- what kind of properties do you manage?
- what is their value? (You don’t need the exact figure, just a rough idea.)
- do the properties belong to you, or are you managing them for someone else?
As for how much cover you need, it’s safer to over-estimate. Lawyers’ fees, compensation and court costs can go through the roof. You can always check with legal counsel about fees if you’re not sure. Imagine the worst-case scenario and go for as much as you can realistically afford.
It’s worth it. Having the right coverage doesn’t just keep you in business when things go wrong, it guards your assets.
That includes the one you can’t afford to lose – your reputation.
If you’d like to know more, check out InsuranceBee’s policies for property managers. Or give us a call: 978.344.4215.