Directors and Officers (D&O) Liability Insurance

In the event of any allegations or lawsuits of wrongful acts or mismanagement, D&O liability insurance protects an organization’s directors and officers from personal financial loss. If your business is large enough to be governed by a board of directors, D&O liability insurance is a must. It protects the organization’s directors and officers from the following:

• Mismanagement accusations
• Breach of trustee duties
• Failure to comply with federal or provincial laws or regulations regarding:
  • Workplace safety
  • Employment practices
  • Environmental practices
• Misrepresentation to shareholders/creditors/etc.

Cyber Insurance

Property managers store a lot of confidential information regarding their tenants. Most information these days is stored electronically, which opens you up to the risk of cyberattacks. Cyber and privacy liability insurance protects your business by covering damages and legal claims if your customers’ personal information is leaked or stolen due to a data breach, ransom attack or theft. It can also cover the costs of any necessary network repairs after a breach or ransom attack.

Commercial Crime Insurance

Commercial crime insurance protects your business from the misuse or illegal transfers of funds. This policy safeguards your finances from internal criminal acts, such as employees who have access to company funds and abuse it. Commercial crime insurance includes the following:

• Extortion protection
• Computer fraud reimbursement
• Forgery and alteration coverage

Equipment Breakdown Insurance

Equipment breakdown insurance covers financial costs for equipment that need repairs or to be replaced due to internal damage. While you have some coverage for external event damage under commercial property insurance, this policy covers internal damages, such as power surges, motor burnout, electrical shorts, operator errors and mechanical breakdowns. It covers a broad range of equipment that is crucial to operating your business, including the following:

• Building elevator motors
• Hot water boilers
• Heating and cooling systems
• Electric power distribution systems
• Computers

Commercial Auto Insurance

If you use your vehicle to carry tools and equipment needed to maintain your rental properties, you should consider getting commercial auto insurance. While you likely have personal auto insurance already, if you get into an accident while on your way to one of your rental properties, your claim may be denied since you were using your vehicle for work. Commercial auto insurance includes the following:

• Third-party liability
• Accident benefits
• Uninsured automobile coverage
• Direct compensation-property damage

What kind of property management risks are there?

Here are five primary risks for property managers to consider:

• Physical property risk 

Every property manager must be aware of their property’s state and condition at all times. This is because physical property damage is a continual risk. Property managers need to perform periodic inspections and ensure that their buildings are maintained and repaired regularly and promptly by licensed professionals.

• Tenant risk 

Managing tenants is probably the most considerable risk for property managers. There are so many variables to consider when you are responsible for others. Some tenants can be careless and cause excessive amounts of damage. Others can refuse to pay rent, costing you a lot in court fees. And if a tenant is injured, they may sue the property manager, claiming negligence. No matter how carefully property managers vet their applicants, they are bound to deal with a bad tenant at some point.

• Administration risk 

Between contracts, rent rolls, incident claims, maintenance, bills, repair requests and more, property managers have a lot of information to juggle day-to-day. This runs the risk of administrator errors, mistakes and oversights, such as an improperly handled claim or a missed deadline. 

• Market risk

Market trends can quickly change, affecting the economy and, thus, a property manager’s livelihood. When the economy trends down, people have less money to spend. This increases the likelihood of empty rental properties as people choose to save money, cannot afford to move, and retail businesses have to close. 

• Cyber risk

Property managers have a lot of sensitive information about their tenants on their computers, which puts them at risk of a variety of cybercrimes. Property managers have to store confidential information such as social insurance numbers, credit card numbers and more, making them more of a target for hackers and data breaches.