Never manage a rental unless the owner/client adds your company name to their landlord policy as an additional insured. This is standard practice for the insurance companies and will do it at no cost to your client. When this authorization is signed by the owner you’ll send it to their insurance agent who will add you on the policy and send you a declaration page (Dec Page) evidencing your coverage. Don’t manage the property without it. Other managers understand this and so does the insurance carrier. It’s the owner that is new to this process. Don’t let the owner talk you out of it. E&O policies and General Liability policies for property managers often mandate that this is in place or your coverage is diminished (or voided). You’re not covered for property damage because you don’t own the property. You’re just covered for liability when someone is caught in a fire, falls off the deck or drowns in the tub. We’ve had all these things happen and the owner’s policy covered us instead of our GL policy. Make it clear to the owner that insurers understand this and will add you without cost.
“The longer you’re in property management the more you realize that it’s sticky, often hostile, sometimes even litigious. Over 35 years I’ve been burned many times by owners, tenants, vendors, staff and third parties and after the second or third time (I’m a slow learner) I would go back to the attorney and have her draft a document that prevents it from ever happening again. Blaming property managers has reached an all-time high and isn’t going away anytime soon. So, understanding this reality, smart managers need to spend extra time, money and effort building/crafting documents designed to protect themselves, even from the folks they are trying to serve. We’ve pulled these documents from our archives and have listed them here for your review and downloading individually (or in packages by topic). We’ve laid this material out in the Property Management Life Cycle categories for purposes of giving the discussion some order.
Protecting yourself from Owners is what these documents are all about.
The Property Management Lifecycle by Crown Investor Institute LLC