As a landlord, is it in my best interest to have my property management company listed as additional insured on my home owners policy?

UPDATED: Oct 1, 2022

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As a landlord, is it in my best interest to have my property management company listed as additional insured on my home owners policy?

I am moving out of my home into a new one and would like to rent my property. I have changed my home owners policy accordingly called them, told the it will be a rental and made changes to the policy as they recommended. I am shopping around for a property management company and so far, 3 out of 3 companies require me to list them as additionally insured on my policy. I haven’t heard a good reason why that’s necessary. Am I essentially paying for them to be insured? There’s no additional cost to me, so I guess there’s no harm but I’m very skeptical about adding a property management company to my insurance. I understand when a lender requires it as they have an investment stake in the property but why the property management company?

Asked on August 24, 2017 under Real Estate Law, Virginia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

It's potentially indirectly in your interest. Tenants often sue the property manager, not the owner of the property, which makes sense when you think about it: the tenant likely knows the PM, but may not know who the owner is. Same thing goes for visitors to the property, who again, are more likely to know or be able to find the "public face," or PM.
Say the PM is sued over something which is really at least in part, if not entirely, your fault: maybe you have failed or refused to do maintenance and repairs, and that results in an injury. If the PM ends up being sued due to your fault, they are not going to be willing to pay for it, so in one way or another, they will bring you into the lawsuit (or sue you later themselves) to get reimbursement. Therefore, it makes sense to bring them under the umbrella of your insurance coverage, since protecting them can protect you.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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