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Expert says insurance is a small price to pay for peace of mind

Expert says insurance is a small price to pay for peace of mind

by Jay Garcia 0 comments

Property managers have been urged to remind clients about the importance of landlord insurance in case the unthinkable happens.

Sharon Fox-Slater, executive general manager of EBM RentCover, said property managers can be held liable for not disclosing to landlords that insurance is available should something go wrong.

“They are not required to recommend a specific product but they must, in the first instance, make owners aware they should have some insurance,” she told RPM.

“If a property manager doesn’t advise a landlord to have a landlord policy and something tenant-related occurs, the landlord would be in a position to claim negligence against the property manager for not making them aware of the need for insurance.”

According to Ms Fox-Slater, this could apply if tenants badly damage a property or default on rent.

“It actually makes their job easier if a landlord has a policy because if something goes wrong the property manager simply makes the claim rather than having to chase the debt,” she said.

Ms Fox-Slater offered an example of a tragic situation in which a property manager was held partially responsible, along with the landlord. A tenant complained about a faulty pool fence, which led to the property manager contacting the owner, who said he’d fix it in a few days’ time.

“In the meantime, the tenant’s young child got in through the faulty fence and drowned,” she said.

“The whole thing ended up in court and it was deemed that the property manager had played a part in this scenario by not determining the extent or severity of the problem; they just allowed the owner to say they’d be there in a few days’ time.”

Ms Fox-Slater said landlord insurance offers clients peace of mind in light of potential liability claims since legal costs are covered in those instances.

“For a relatively small amount of premium, they can effectively have hundreds of thousands of dollars in cover,” she said.

Ms Fox-Slater said landlord insurance only protects the landlord; and property managers' businesses should have insurances that cover liability and legal costs.

[Related: PMs could be running scared from landlord insurance]

 

Expert says insurance is a small price to pay for peace of mind
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