Public Liability Insurance

#1

We have recently been having conversations in our weekly Property Management meetings about public liability insurance for our landlords and whether we should or should not take on an owner / management if they are not covered by this type of insurance.

When it comes to rental properties, the onus is on the owner of that property to make sure that they are covered by public liability insurance (usually a minimum of $10 million) in the event of a fall, injury or even a death at their property because, even though everyone does their best to avoid it,
accidents / incidents do happen.

Best practice for our office is that we recommend all owners take out landlord insurance and this usually includes public liability insurance or legal liability cover but we make sure owners check. Our office also requests a copy of this insurance annually so that we can keep it on file and make sure
its up to date.

What do other property managers do in this instance – would you take on a new management without an owner having this insurance?

Look forward to feedback.

Thanks!

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#2

Great topic @tara.abbot-anderson - It regularly surprises me that some Owners will elect not to insure the property - I guess that risk should fall to them, but I personally would not reject an Owner that elects Not to insure their property - I see that this person needs all the really good help, guidance and expert property management that they can get - so best that they are with an Agency that is switched on, so as to reduce the chance of a possible claim

imagine you said no to a LL, they went to another Agent not as good as you (and your team) and the new Agency acted in a way that also contributed to the chance of a claim -

  • Best to maintain the management
  • regularly reach out to them to initiate insurance
  • diarise each 12 months at least to follow them up to see if they have a policy, or would like your office to arrange one on their behalf
  • a No today, with some education may turn out to be a Yes tomorrow

Cheers Michael

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#3

We encourage landlord insurance but don’t enforce it!

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#4

It also depends on what you have on your MAA - some clauses vary from stating the owner should have PL insurance which is generally part of their building insurance and separate from Landlord Insurance - or some have a disclaimer that state

“The Agent has advised the Principal that the Principal should:
hold adequate and appropriate insurances including, without limitation, building insurance, indemnity insurance and landlords insurance”

There are some owners that have many properties so the total cost of insurance on all building is prohibitive and they figure the savings they make over the years is enough to cover if one property goes down.

That being said - as long as the Property Manager does their work well and identifies and advises owners of risks at their properties “in writing” and if it is not addressed, would be the time I would be considering not representing the owner. We hear of all too many cases where the Property Management company also get sued.

The relm that is Property Management is a hard pool to play in - cut throat and quite often inexperienced and any listing is a good listing. The sooner the industry is recongnised at a more Professional Level, the better fees we can earn, and these properties that don’t have the adequate requirements will not be represented by quality companies.

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