Category: Activities Related to Real Estate

NAICS CANADA CODE:  531310 Real estate property managers

Description of Operations:

Managers of property may have a variety of exposures. Some simply manage the overall property maintenance and care, contracting out the performance of those services. Others do the actual service operations. Services may include building cleaning, lawn maintenance, rent collection and dispersal, screening and acquisition of tenants, and the overall property management and security. In some cases, the manager will live on premises. Each operation will have its own set of exposures to evaluate.

  • Property exposure at the operation’s home base usually consists of an office with equipment and supply storage. Fire concerns may exist from the maintenance and cleaning chemicals and supplies. Should any of the chemicals and cleaners be flammable, proper labelling, separation, and storage will be needed — in approved containers and cabinets.

  • Inland marine exposures are determined based on where the supplies and equipment are kept and who owns them. If the insured owns them but they are kept on the customer’s premises, the ability to safeguard and protect at the job site is important. If the insured uses the customer’s equipment and supplies, there could be a care, custody and control exposure involved making it necessary for the insured to prevent theft of the equipment.

  • Occupiers’ liability is the concern since the insured is always working at a job site. Wet or slippery floors can cause injury to customers and passers-by. What controls are in place? Is any work carried out while the premises are open for business or is all cleaning done after hours? Are nonslip finishes used? How is the customer protected from the employees of the insured? Are there background checks for both property exposures and personal actions? If there is lawn care, is the insured licensed to apply herbicide? What procedures does the operation have in place to prevent employee theft of customers’ property? Are references required? Are references and background checks carried out? What procedures are followed if an employee does commit theft? What is done to prevent other types of damage or injury to customers’ property? What training and procedures are in place to prevent improper lockup after completion of operation, lost keys, security issues, and unauthorized visitors? Bailees or care, custody, and control exposure may exist from the management and care of the property and the contractual agreements made by the caretaker and owner. All agreements require careful review and evaluation.

    Personal injury and other liability exposures may exist should the caretaker or manager be responsible for advertising and screening of potential tenants of property. Is there a clear understanding of the screening that must take place to prevent discrimination?

  • Automobile exposures are often Hired and Non-Owned only. Any employees who run errands for the insured or customer must be required to have adequate underlying limits.

  • Workplace safety exposure is extremely varied, based on the actual work handled by the insured. Workers can experience lung, eye, or skin irritations and reactions to the cleaning chemicals. Slip and falls can occur during cleaning. Lifting, back injury, hernia, and sprain and strain are all common occurrences. If any lawn care includes chemical applications of fertilizers or weed control, losses from this type of operation can be severe. When employees work off hours in deserted buildings, there is a potential for assault. What procedures are in place to protect them?

    This category is very broad and the potential for loss varies from extremely low to very high. The more exacting the needs of the customers, the higher the potential for loss. The key to evaluating this risk is to understand the insured’s customer.

Minimum recommended Insurance coverage for property managers:

Business Personal Property, Accounts Receivable, Contractors’ Equipment, Employee Dishonesty, General Liability, Umbrella, Non-owned Automobile

Other Insurance coverage to consider for property managers:

Building, Business Income with Extra Expense, Accounts Receivable, Computers, Employment Practices Liability, Directors and Officers – for profit, Automobile Liability and Physical Damage