In the past 6 months, I have been asked by the Realtor Community about Property Management more than any other topic.  The average E&O Policy is over 30 pages, but there are two sections to look at when pinpointing coverage.  While they vary by policy, this is what we find most often

  1. Who is an insured
    • The Brokers
    • Owners
    • Subcontractors – The key to a subcontractor being covered is they must use the broker of the real estate office as the broker 2on their contracts
  2.     What is a covered occupation or trade
    • Residential Real Estate
    • Notary Public
    • Property Management

So according to numbers 1 and 2, the property manager is covered for E&O Insurance as long as they use the office broker.  In most cases though, the Property Management Company would not be covered for General LiabilityGeneral Liability is an afterthought for most Real Estate Offices because there is rarely a claim.  This is not the case for a Property Manager.

General Liability would normally cover damage to a property or injury to a person.  Consider the following:

  • A latch on a fence doesn’t catch and someone gets bit by a dog or drowns in a pool
  • Someone slips and falls on a cracked stair leading up to the house
  • A renters dog bites a neighbor

In summary, if you have a property manager in your office, be concerned about General Liability Coverage.  E&O is more than likely already covered