Property Management Insurance in Ontario

What Is Property Management Insurance?

Property management insurance protects professional property managers against legal claims from property owners and tenants. There are numerous reasons why a property manager can have lawsuits filed against them, ranging from negligence to discrimination, and Ontario property management insurance covers the legal and court fees that come along with a lawsuit to ensure a property manager doesn't have to pay out of their own pocket. Don't leave yourself vulnerable to a wide variety of potential claims—an experienced Morison Insurance broker can help you find the best coverage available for property managers in Ontario, so you can have peace of mind knowing you're protected against whatever comes your way.

Who Needs Property Management Insurance in Ontario?

Everyone who manages a commercial property needs property management insurance. That applies to building owners who manage their own rental properties, as well as a third-party property management business or individual. Because there are so many legal risks inherent in managing real estate assets, a robust property management insurance policy is very important for anyone who is responsible for tasks such as finding new tenants, handling sensitive tenant information and ensuring a building is in safe, livable condition.

In short, anyone who is doing the following should be covered by Ontario property management insurance:

• Renting or leasing residential properties
• Contracting repair and maintenance services for a rental building
• Managing any number of properties, from one to dozens

Why Is Property Management Insurance Necessary?

Because they deal with so much sensitive information and have to navigate complicated legal processes such as eviction, property managers are more vulnerable to litigation than many other professions. At the same time, there are so many things that can go wrong at a rental property that also leave property managers open to legal action. That's why Ontario property management insurance is so crucial. From cyber attacks from hackers determined to uncover sensitive information and hold it for ransom to serious bodily injury caused by negligent maintenance practices, there's a lot that can go wrong for property managers. When you call Morison Insurance, you get the peace of mind that comes with knowing you have the best coverage available and won't have to pay eye-watering bills for medical costs, legal fees, damages and much more.

What's Covered By Property Management Insurance?

As a professional property manager, you'll naturally benefit from basic coverages such as general liability insurance and professional liability insurance. But there are some additional coverages that can also be very important to protect you and your business against lawsuits, including commercial cyber insurance, consumer deposit and commission coverage and tenant discrimination insurance.

All of these coverages are designed to protect you from having to pay out-of-pocket for successful legal claims, but the type of insurance varies according to what it protects against. Navigating all the options for differing types of coverage from different insurance companies can be incredibly confusing, especially if you're not a property management insurance expert. The skilled brokers at Morison Insurance are very familiar with the ins and outs of property management insurance, and we know where to look to find the very best options to ensure you are fully protected against a full range of potential liability issues. Regardless of what happens, your property management insurance will stand behind you so you never have to worry about crippling legal costs.

General Liability Insurance

Property manager liability insurance is a baseline liability coverage that protects you against claims related to bodily injury, personal harm and property damage. It covers costs for damages that require repairs or replacement, along with expenses such as legal fees and medical bills. For example, if a tenant slips and falls on the stairs in a building you manage, you could be sued for the cost of their medical bills and more, regardless of whether you were actually present in the building at the time of the incident.

Here's another example: say you have to enter an apartment to check something out and you accidentally bump your ladder into a painting, causing a big tear in the canvas. Even though it was an accident, you could still have a lawsuit brought against you to cover the cost of repair or replacement. General liability insurance protects you against claims of bodily injury and third-party property damage so you don't have to pay those costs yourself should you be successfully sued.

Property Management Professional Liability Insurance

General liability is not enough. Property managers must have professional liability insurance as well, which is also known as errors and omissions insurance. Professional liability insurance protects property managers and property management companies against lawsuits that are based on errors, omissions and negligence. An example of this would be if a mistake was made in a rental contract that caused the building owner to lose money. The owner could sue for damages related to the contractual error, and your errors and omissions coverage would protect you against the results of that lawsuit.

Professional liability insurance is a critical part of Ontario property management insurance because there are so many things that can potentially go wrong—and you can also be sued for things you didn't even do, like discriminatory practices and wrongful eviction. Evicting a tenant is an onerous legal process, and the former tenant can sue for wrongful eviction if they feel they have been evicted for an invalid reason or that the process was not handled correctly.

Tenant Discrimination Insurance

This is typically covered under professional liability, but it's a good idea to speak with your Morison Insurance broker to confirm that tenant discrimination issues are fully covered under your policy. This protects you against allegations of wrongful discrimination during processes that involve tenants, such as application approvals, changes to the lease agreement or rental fees, and more. Discrimination includes unfair treatment on the basis of race, sex, gender, sexual orientation, disability, age, religion or marital status. For example, prospective tenants could allege that you denied their rental application because of their race or gender,  even if that's completely untrue. You can relax knowing you're protected by property management insurance against tenant discrimination claims.

Cyber Liability Insurance for Property Managers

In this day and age, file cabinets are going the way of the dinosaurs—most sensitive information and documents are stored electronically. That means they can't be physically damaged, but they're not safe from liability issues. That's why cyber liability insurance is a necessary part of property management insurance in Ontario. As a property manager, you have to store a lot of highly sensitive information related to tenants’ finances and identity, which leaves you vulnerable to cyber attacks. The expenses incurred by cyber breaches, ransomed information and repairing security networks can be extremely high—one data breach could be enough to bankrupt a company or individual that is not protected with cyber liability coverage on their property management insurance.

Consumer Deposit and Commission Coverage

Since property managers are required to handle tenant information such as credit card and bank account details, it's highly recommended that they invest in consumer deposit and commission coverage as part of their property management insurance policy. The consumer deposit offers protection to tenants if their payments are misappropriated or handled fraudulently. Commission coverage, on the other hand, protects your commission in the event of fraud or misappropriation. For example, if one of your employees misappropriates rental fees, commission coverage will ensure that you still receive your rightful commission from those fees.

Tool and Equipment Coverage for Property Managers

Some property managers take a hands-off approach and prefer to hire contractors to deal with repairs, cleaning, installations and replacements on rental properties, but others prefer to take care of handiwork on their own. If you are handling those tasks directly as part of your property management services, you have tools and equipment such as your toolbox and other devices like a pressure washer or carpet cleaner that need to be specifically covered by a tool and equipment floater. In the event that your essential equipment is stolen or maliciously damaged, your insurance will cover the cost of replacement. It's important to note that if you need to move your tools and equipment from one property to another, you'll need additional coverage to insure those items while they are in transit or on a new job site.

Additional Property Management Insurance Coverages

There are more potential coverages for property management insurance that you may need, depending on the unique deals of your job. If you're not sure where to start, give Morison Insurance a call. Our dedicated property management brokers have the experience and expertise to find the best combination of coverages for your Ontario property management insurance so you can rest assured that you have complete protection against all of the potential liability issues that may come your way in your professional life.

Frequently Asked Questions

What Are the Factors That Impact Property Management Insurance Rates?

Rates for property management insurance vary based on the same basic factors that influence most types of business insurance rates. That includes:

• Whether you were previously insured
• The building location
• The size of the building
• Your previous claims history
• Your work experience
• The number of people you employ
• Your credit score
• Your expected revenue in the coming year

Of course, the cost of your policy will also be influenced by the specific coverages and add-ons you need to be fully protected in your line of work.

Is the Property I'm Managing Covered By Property Management Insurance?

No it's not. The property owners will need commercial property management insurance to cover perils to the actual building itself. If you happen to be both the owner and property manager, that means you'll need commercial property management insurance. But if you're a third-party property manager that does not own the building, you do not need third party coverage.

Is General Liability Insurance Adequate for Property Managers?

While general liability is an important piece of the puzzle when it comes to Ontario property management insurance, it is not enough coverage on its own to adequately protect a property manager against all the potential legal challenges they may encounter. Professional liability insurance and cyber liability insurance are very strongly recommended, and there are a number of additional coverages you may need depending on how you choose to operate your business.

If I Manage Multiple Properties, Am I Covered for All of Them?

Typically your property management insurance policy will extend coverage to multiple buildings that are managed by your company. However, you must disclose this information to your broker so they can ensure that all the properties you manage are factored into your property management insurance premium.

What Happens if Legal Action is Taken Against Me?

If you are notified there's a lawsuit against you, the first step is to contact your attorney. They will guide you through each part of the process, offer professional advice and make sure deadlines are met.

Why Choose Morison Insurance for Property Management Insurance?

At Morison Insurance, we are proud to provide the highest standards of professional broker services by finding the absolute best coverage for each and every one of our clients. We are a family-owned and operated business, and as such, we treat our clients like members of our own family. Morison Insurance strives to build long-term relationships with our clients so they can have peace of mind knowing their broker is committed to their best interests.

To speak with our expert brokers about your unique Property Management insurance needs and learn more about coverage and property management insurance options, give our team a call at 1-800-463-8074. You can also inquire about a quote online.

This content is written by our Morison Insurance team. It is provided for general information only. Insurance needs differ from person to person, and this article is therefore not a substitute for professional advice about your individual insurance needs which can be obtained by speaking to one of our brokers.