If you are a rental property owner hiring a property management company to manage your property, you may notice that most reputable management companies require clients to list them as an “Additional Insured” on the landlord insurance policy. This is very different from an “Interested Party” and is a very important way to mitigate liability for both parties.
Property managers assume a great deal of responsibility and inherent risk in the business of property management. And while a property management company should still always carry their own professional liability insurance and general liability insurance, that insurance will likely not always cover claims against matters concerning the home itself. This leaves the management company vulnerable to risks. And since most management companies also include a hold harmless clause in their agreement, this ultimately could leave the homeowner exposed and personally liable for a claim
Adding your property management company as an “Additional Insured” on your policy means that coverage is extended to the management company as well, so any claims or litigation that may arise become simplified, as both parties will present a unified defense, with one insurance company representing them both.
Not all insurance providers allow owners to add property managers as an “Additional Insured”, so make sure to find out as you may need to switch providers if this is not something they can support.
Being listed as an “Additional Insured” is NOT the same as being listed as an “Interested Party”
Some insurance providers do charge to add a property manager as an “Additional Insured.” Not all do.
Talk to your insurance agent to find out what options are available with your policy to extend coverage and keep your investments safer.