Property managers have a need for proper insurance coverage. Property Managers often get caught in disputes between owners and tenants. Property managers can not only be sued by their own employees but also by the staff of the property owner. Also, property managers who have an equity interest in the property have increased risks that often lead to conflict of interest claims. There is increased litigation holding all professionals to a higher standard, including property managers.
If your clients own property that is leased to others, whether one small office or an entire manufacturing complex, Lessors Risk Insurance is a must-have. Lessors Risk Coverage is necessary to adequately protect your client’s investment from litigation as the result of an accident.
We thought it would be helpful to identify a few common claims made against property managers.
Common Property Managers Claims:
A property manager managed a small retail mall that had 12 retail businesses, including a restaurant and coffee shop. The property manager failed to maintain the property as contracted, which included maintaining the exterior and parking lighting. A customer of the restaurant was injured while exiting the parking lot at night and sued the restaurant and property management company for $15,000. The property manager was held responsible for the loss and settled the claim.
A property manager of a commercial building failed to maintain and update the building as required under the agreement. As a result the owner was forced to lower rents, and the building owner sued the property manager for loss of income.
A property manager hired an office manager to help with accounting and other functions. The office manager was fired due to poor performance. The office manager sued for wrongful termination. The defense costs exceed $25,000.
Who needs property management insurance coverage?
If you are involved in the following types of activities you will need the right kind of insurance:
- Renting or leasing real estate to others
- Managing real estate for others
- Selling, buying or renting real estate for others
- Lawsuits in this area continue to climb. Don’t leave your business exposed by not having this type of protection in place.