Q: Why is it in the best interest of the Owner for the Property Manager to be listed as Additional Insured?
A: From the owner’s standpoint, listing the Property Manager as an Additional Insured helps make the claims or litigation process easier.
When the policy extends to both parties, they are able to present a unified defense, with one insurance company representing both. It not only streamlines the process but reduces costs all around.
Without an Additional Insured endorsement, the Property Manager would have to cover any expenses up front and then seek reimbursement from the property owner directly under their indemnification clause – a much more time-consuming and costly process that could even lead to the PM suing the owner.
Q: Doesn’t the property management company have their own insurance?
A: The Property Manager typically does carry E&O Insurance and General Liability insurance, but this generally only offers protection from claims that are a result from negligence by the Property Manager. It typically does not offer any protection against lawsuits concerning the home itself that weren’t a direct result of the Property Manager’s negligence.