Property Managers Beware!

If a Property Manager tells you they’re not at risk because their client has held them harmless, tell them to think again. The sad truth is that Hold Harmless and Indemnity Agreements do not fully cover Property Managers.

Why Do Property Managers Need Their Own Insurance?

Property Managers are not only liable for their own mistakes but also the mistakes of their employees or contractors. If an association sues them for negligence, the association’s “General Indemnity” provision rarely provides adequate coverage.

In our litigious society, Property Managers can get sued for a myriad of reasons, including, mishandling financial matters, exceeding their authority, or plain mismanagement. It’s the Property Manager’s responsibility, not the association’s, to mount their own defense.

After the dust settles, the Property Manager is responsible for going back to the association and asking for reimbursement for legal costs. In the best-case scenario, the Property manager has to go through an uncomfortable process in order to get reimbursed — from the hand that feeds them, no less.

In the worst-case scenario, the association is forced to make a special assessment against their members to come up with the money to repay the Property Manager or they may balk at paying the legal fees altogether. Either way, it isn’t pretty for the Property Manager.

What is covered by Property Management Errors and Omissions Liability?

• Legal defense costs covering any services a Property Manager renders or fails to render, whether it’s a valid or baseless claim
• Judgments and court costs up to the limit of the policy

What Can You Do?

1. Ask Your Property Management clients if they carry their own insurance
2. Review their policies for potential holes
3. Educate them on potential risks

Next Steps…

Access E&S can assist you with finding the right Property Management Errors and Omissions Liability coverage for your clients.  Contact Us Today!

Download… Property Managers Errors & Omissions