Property Management Insurance
If you run a property management business, it’s important to have insurance in place to ensure that your investment and rental income is protected.
If you have ever wondered what your responsibilities are from an insurance point of view, read on to find out how Black Lion Broking Services Ltd can help you find insurance and give you the peace of mind that you require.
What is property management insurance?
For landlords and owners of rental properties, as well as estate agents, there are a series of risks that you need to be aware of. When it comes to renting a residential property to a tenant or leasing a commercial property to a business, you need to ensure that you have the correct protection in place if things go wrong and a claim is made against you, especially if you are managing properties on behalf of clients too.
A property management insurance policy will provide cover for both the buildings as well as any contents and furnishings, in a very similar way to home insurance. The main difference, however, is that property management insurance is a specialist type of policy that also provides protection for a number of additional financial risks and liabilities. For example, this can include cover if a tenant suffers an injury whilst living or working in your property, and you are subsequently found to be at fault, as well as protecting any rental income if it is not possible for you to rent out the property due to damage and covering any unexpected costs that arise from tenant disputes.
Types of property management insurance policies
Without a property management insurance policy in place, as a landlord, property owner or estate agent manager you could take a large financial hit in the event of a claim.
There are several types of property management insurance policies that you could consider for your business. These include:
- Buildings insurance: If you own the freehold of the property, this will cover damage to the building’s structure and built-in features such as fitted kitchens as a result of fire, storm subsidence or a flood.
- Contents insurance: If you’re renting out a furnished property, this covers internal items including furniture, carpets and curtains, and if it’s a flat you may also be able to cover communal areas such as halls, receptions, stairs and landings.
- Rental protection insurance: This will cover the rental income that you lose if you can’t rent out your property due to serious damage that has occurred.
- Property owners’ liability insurance: Provides protection if one of your tenants suffers an injury on your property or if their possessions are lost or damaged, and will give you some protection in the event of a claim and you are taken to court.
- Employers’ liability cover: If you employ any member of staff (including permanent, temporary, contractors or freelancers) as part of your property management business, then this is a legal requirement. The minimum level of protection is £5m, which will cover the cost of compensation claims if they get injured or ill while working for you – for example, while putting up or taking down the for sale or to let signs that your company uses.
- Unoccupied property cover: Provides protection in-between tenants if no one has lived in your property for over 30 days. For example, this may be if you need to make repairs or renovations to the house or flat before you rent it out again.
- Professional indemnity insurance: A client could make a legal claim against your property management business if you are deemed to have given them negligent advice, or if you lose confidential documents. With this type of insurance, you will be covered for any compensation or legal costs that you have to pay.
- Public liability insurance: As you may be required to carry out viewings at clients’ properties, this will cover you for any accidental damage that occurs to their belongings. In addition it will also provide cover if a member of the public injure themselves whilst in your office, such as slipping on a wet floor for example, and will also pay to replace locks and keys for any properties that you manage in the event of a theft from your office too.
- Block insurance: If you manage a block of flats that is purpose built or has been converted, this will cover any risk management claims (in terms of asbestos surveys and fire risk assessments.)
These are just examples of some of the types of property management insurance policies that we look after at Black Lion Broking Services Ltd. As we know that no two businesses are the same, speak to us today to find out which policies will best meet your needs.
Do I need property management insurance?
Although it is not a legal requirement (apart from employers’ liability insurance), having insurance for your property management company will give you added peace of mind. The type of property letting managers’ insurance that you require depends on the type of business that you run, offering you total peace of mind that your business won’t suffer from a financial hit if things go wrong.
The cost of property management insurance
The cost of property managers’ insurance depends on the level of cover that you need and any optional extras that you choose to add to your policy.
Factors which could affect the premium you pay include:
- The condition of your property.
- The security measures that you have in place.
- Your claims history.
- The location of your property.
- The number of properties that you manage.
Optional extras that you may choose to add to your estate agents’ insurance could include:
- Legal expenses.
- Rent guarantee.
- Loss of rent.
- Accidental damage by tenant.
- Malicious damage by tenant.
- Cost to repair damage in an emergency such as pest infestation, a burst pipe or gas leak.
- Theft by tenant.
At Black Lion Broking Services Ltd we understand that cost is important to your property management business, but it is crucial to ensure that you are properly protected in line with the risks your business faces. With that in mind, we will take the time to understand the specific needs of your business and recommend the amount of cover that is best suited to you.
What else do I need to know about property management insurance?
If you are a property management owner that rents out multiple properties, your options for property management insurance are as follows:
- Insure each property individually with a tailored policy.
- Put multiple properties on one policy.
How can I get property management insurance?
Black Lion Broking Services Ltd have a team of specialist advisers ready to help you get the right protection in place for your business.
We will take the time to understand the specific needs of your business and are committed to delivering a completely personalised service, ensuring that you have the best possible cover at the best possible price.
To find out how much peace of mind costs, contact Lee Walstow by calling: 01932 974434.