Why do property managers need insurance?
Property management companies offer services such as advertising and maintenance, but legal claims may arise from errors, damages, or injuries.
Accidental injuries or property damage
As a property manager, you may face various incidents that could lead to claims against you. Slip-and-fall accidents, property damage, or injuries to tenants or visitors are just a few examples.
Tenant disputes leading to legal claims
Additionally, legal actions may arise due to tenant issues such as lease agreements, security deposits, or eviction proceedings, which can be expensive to resolve.
Accusations of making a costly mistake
Your role as a property manager involves providing various services, including advertising, tenant screening, lease preparation, and rent collection. It's important to note that property owners or tenants may hold you responsible for any financial losses they incur.
Unpaid invoices
Credit control is another service commonly provided by property management companies, and chasing bad debt is possible. It's crucial to be aware of these potential risks and take necessary precautions to protect yourself and your clients.
Professional indemnity insurance for property management
Professional indemnity insurance protects property managers against claims of negligence or inadequate advice that could lead to financial losses for your clients.
Property managers often face legal disputes with tenants and owners, which can be stressful and costly.
Professional indemnity insurance offers legal defence and compensation if you are deemed responsible, making it essential to protect your business.
What does professional indemnity insurance for property management cover?
To protect themselves from claims of wrongdoing in regards to their advice or work, property managers can obtain professional indemnity insurance.
Cover includes:
- Failing your duty of care
- Acting negligently
- Giving the wrong advice or recommendation
For example:
- A tenant might try to claim you caused harm to them whilst you were doing your job - inspecting a property, starting eviction proceedings, collecting rent or similar.
- Property owners may claim you’ve caused them a loss by letting to the wrong tenant or underselling their property.
Switching or cancelling professional indemnity insurance for property management
If you cancel your professional indemnity policy in the UK, you cannot make any claims against it.
Therefore, when switching to a new property management insurance provider, it is important to ensure that your new policy includes coverage for your previous work, referred to as "retroactive cover".
Should I keep professional indemnity insurance if I take a break from property management?
It’s wise to keep your professional indemnity if you retire or take a break from property management. Claims against professional misconduct can surface months or years after you delivered the work.
If a past client sues you for damages and you have cancelled your professional indemnity, you will not be covered.
How long you keep your cover in place is up to you; consider the type of property management you did and the likelihood that a client might bring a claim against you.
Public liability insurance for property management
Public liability insurance shields property managers from claims of injuries or property damage.
As a property manager, you're responsible for maintaining your properties. You'll likely hire a third party, but you're still liable for damages or losses. You may still be liable, even if it's your subcontractor's fault.
Public liability insurance is a must for property managers. It protects against unexpected incidents and potential lawsuits, providing legal and financial security. It's affordable and essential for this profession.
What does property management public liability insurance cover?
Having public liability insurance can be very helpful in the event of injury claims and demands for compensation.
Cover includes:
- accidental injury or death
- accidental property damage
For example:
- During a showing of a property, a fall occurred. Some weeks later, you’re faced with a legal letter asking you to pay compensation.
- Following a house inspection, you receive a tenant demand to pay repair costs to their property, which they claim happened during your visit.
Other insurance property management buy
Determining the appropriate insurance coverage for your unique situation requires careful consideration of several factors. These may include whether you possess a laptop, have personnel on staff, or conduct your operations from a physical office location.
Commercial legal expenses
Most commercial legal expenses insurance will protect property managers against various tax and legal issues you may encounter due to your profession, which are not covered by professional indemnity or public liability.
At Suited, we combined £100,000 of commercial legal expenses insurance with helplines and other tools to better assist property managers in dealing with these issues. We call this Business Legal Protect, and it’s part of your subscription.
Business Legal Protect offers qualified advice and assistance with:
- Legal and tax matters concerning your business
- Criminal prosecution
- Unpaid invoices (over £200)
For example:
- HMRC investigates your tax affairs
- You are facing an investigation from a professional body
- You need legal help chasing a significant unpaid invoice
- You’re being taken to court for breach of contract
Electronic business equipment insurance
Insurance for electronic business equipment covers the expenses of repairing or replacing business tools like computers, cameras, or other equipment. Property managers frequently depend on electronic devices. Whether you own or rent this equipment, you can obtain insurance coverage for the cost of repairing or replacing it in case of accidents.
Shopping for property management liability insurance
When choosing whether or not to use Suited property manager insurance to protect your business, it's important to consider the following:
Cheap property management insurance
Some insurance providers may offer very low prices, but their after-sales service may need to improve. It's important to check how easy it is to contact your insurance provider. At Suited, we offer multiple options for contact and respond quickly.
Research the insurer's reputation
The reputation of an insurer's payout is critical. Suited only partners with financially stable insurers with excellent ratings.
Many providers impose fees to amend or cancel
Low initial prices may seem appealing, but they may have hidden fees for monthly payments or policy amendments/cancellations. At Suited, we charge no extra fees, and you can cancel anytime without any additional charges.
Check for restrictive policy wordings or high excess
Some providers may offer attractive prices but may not provide sufficient coverage. Suited's professional indemnity and public liability policies have no £0 excess.
