Does a property management company need E& O insurance?
On One Hand: Protect Your BusinessMany insurance brokers will recommend E & O insurance for property management companies because we live in such a litigious society, and an error can occur upon any transaction.On the Other: Not always necessaryProperty damage liability, a major source of lawsuits, is covered under general liability insurance. Therefore, if you elect to carry errors and omission insurance, you are covering your business twice-over. In addition, most responsibilities between the property management company, the owner and the client are spelled out in the leases, and therefore lawsuits tend not to go very far if ways of handling the dispute were previously spelled out in writing.Bottom LineThere is no absolute yes or no regarding whether or not property management companies carry E & O insurance; it depends on the size of the company, the type of property being rented out and the agreements written before between the owner, the company and the tenants.
