Property Managers face many areas for potential litigation and claims. Insurance programs can address many of these areas but unfortunately there are some common scenarios that often go uncovered.
Fair Housing Discrimination Claims– It’s surprising how the diligent efforts of Property Managers, Owners and Boards to address seemingly minor complaints or requests often become much more serious when residents claim that they are being discriminated against. Thorough documentation of the actions taken to resolve these issues are often the key to successfully defending claims of this nature.
Failure to Place or Failure to Maintain Insurance– An uncovered insurance loss will generally generate litigation at some level. Errors range from missing a bill to leaving locations off of schedules. Clear contracts specifying a Property Manager’s role and responsibilities are essential for successfully defending claims of this nature. Clear and documented communications with owners and boards are also essential. This is of particular concern when Property Managers take on a new client and are integrating the new locations and properties into their system
Personal Injury: Evictions are seldom pleasant. Claims for Wrongful Eviction certainly occur in Property Management. These can take the form of constructive evictions as well. Once again the devil is in the details. Documented correspondence is always critical when facts are challenged. A common surprise for Insurance Agents and their Property Manager Clients is the realization that Wrongful Eviction is not included as part of the Personal Injury definition under their policy. This is easily remedied prior to a claim.
Professional Services– Clients make many demands on their Property Managers. Property Managers must be sure that they are aware of the any Professional Services that they perform that may not be covered by their policies. Policies may limit coverage to “residential properties” or specific services that Property Managers provide. Since most Property Managers are licensed Real Estate Agents or Brokers this generally needs to be a covered service.
General Liability: Everyone knows that Property Managers are defined as insureds on most General Liability policies. As result many Property Managers and their agents opt against a General Liability policy for the Property Managers operations. While this may appear to be a wise budget decision Property Managers can find themselves as defendants in many situations in which they will not be covered by a client’s policy. A designated premises office policy generates the same concerns. Cost effective options are available in many cases.
Cyber Liability: Property Managers can be responsible for security breaches of the personal information in the care. This can be an electronic or “Cyber” breach or a simple theft of documents containing information. Third parties and employees with access can be potential threats. Notification requirements and credit repair can be substantial. Secure networks and thorough background checks can reduce this exposure. Large fines can also be assessed for the improper disposable of personal information even when there has been no actual breach.
For additional information on Property Manager’s loss exposures visit us at www.NewEmpireGroup.com.
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