It's a necessity for all Property Managers to understand the correct coverage for Errors and Omissions. Property Managers do have an exposure and a need for Errors and Omissions coverage.
Although you or your property management team may be listed an additional insured under the properties you manage, what if the property sues you personally?????
Did you know in the case mentioned above there IS NOT COVERAGE included on most Errors and Omissions policies?
Wthout an E&O Policy, a property manager could be exposed and therefore responsible for any of the following.
-Misrepresentation and/or miscalculation of the financial strength of managed properties.
-Inaccurate record keeping or tax preparation for managed property Abuse of fiduciary responsibility with regards to entering into leases.
-Failure to adequately perform due diligence before hiring subcontractors.
-Failure to provide a written description of services to be performed for the community association.
-Abuse of discretionary authority provided to property manager with regards to capital improvement or repairs.
-Management of properties that are not in compliance with statutory and regulatory requirements for persons with physical handicaps.
-Inadequate budgeting for property managed.
-Abuse of authority in drafting check or money management activities performed by property manager.
-Failure to perform proper background checks on perspective tenants.
-Failure to follow proper procedures in the tenant eviction process.
-Entering improper indemnity or limitation of liability agreement.
-Personal injury including libel, slander, and invasion of privacy.
-Failure to timely report insurance claims.
For a Full Explanation
of Errors and Omissions coverage as well as a more in depth look at many of the exposures a E&O policy may cover, feel free to review "Community Manager Errors & Omissions Coverage", an excellent article by Ian H. Graham Insurance. The artcle can be accessed simply by clicking here .
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