As a property owner, you are vulnerable to certain legal claims regarding someone injuring themselves on the property, burglary, fire, water leaks, etc. By adding your Property Management Firm as an Additional Insured entity, your coverage is effectively extended and thus, the problem is solved, reducing the financial and legal burden on both parties in the event of a legal claim.
Protection From Liability
Property managers are often the target of litigation in the event of an incident, such as a personal injury, on the property. Listing them as an additional insured protects both parties from potential liabilities.
Streamlined Defense
In the worst of cases, in the event major litigation takes place, having the property manager listed as “Additional Insured” creates a unified defense, with one insurance company defending both parties, streamlining the defense and significantly reducing legal expenses for all parties, for which the owner is ultimately responsible.
Avoids Costly Reimbursement
Without the additional insured endorsement, the property manager would have to seek reimbursement from the owner or their insurance for any losses. This would be more expensive and time consuming for both parties.
What Does “Additional Insured” Mean?
The Additional Insured verbiage on a homeowner’s policy means that the coverage is extended not only to the owner of the property but also to the listed agent or Management Company.
Industry Best Practice
Adding the property manager as an additional insured is usually free and is recommended by NARPM, industry attorneys, and many insurance agents. It provides an extra layer of protection, making the claims and litigation process easier for both parties.
Consult your attorney and insurance agent to find out how you can effectively and affordably add your Property Manager to your landlord policy – all it takes is often a simple request and your signature on an e-form.
