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Why do property managers need business insurance?
Property managers take on a lot of responsibility, which results in high risks. A disagreement with a tenant or a building owner could have serious financial consequences. Property management insurance protects against the cost of wrongful eviction claims, injuries, and property damage.
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Property managers can save money on insurance by comparing quotes from top insurance companies.
Fill out Insureon's easy online application to get free quotes and advice from a licensed insurance agent.
What types of business insurance do property managers need?
These insurance products cover common risks faced by property managers.
Errors and omissions insurance
E&O covers legal defense costs related to a property manager's work performance, such as an accusation of negligence from the property owner or a renter. It's also called professional liability insurance.
BEST FOR
- Failure to provide promised services
- Tenant discrimination claims
- Eviction disputes
General liability insurance
This policy covers basic property management risks, such as tenant property damage and bodily injuries. Bundle with commercial property insurance for savings in a BOP.
BEST FOR
- Slip-and-fall accidents
- Damaged personal property
- Libel and other advertising injuries
Workers’ compensation insurance
Most states require workers' comp for property management businesses that have employees. It also protects sole proprietors from work injury costs that health insurance might deny.
BEST FOR
- Employee medical expenses
- Disability benefits
- Employee injury lawsuits
Business owner’s policy
A BOP bundles commercial general liability coverage and property insurance in one plan. It's one of the most cost-effective business insurance policies for a property manager.
BEST FOR
- Tenant injuries
- Physical damage to tenant property
- Business property damage and theft
Commercial auto insurance
This policy covers legal fees in an accident involving a vehicle owned by a property management company. Each state has its own requirements for auto liability insurance.
BEST FOR
- Property damage caused by your vehicle
- Medical bills from an accident
- Vehicle theft and vandalism
Cyber insurance
Cyber liability insurance helps cover financial losses from data breaches and cyberattacks. It's strongly recommended for any small business that handles sensitive information.
BEST FOR
- Client notification expenses
- Fraud monitoring services
- Data recovery
Looking for different coverage? See more policies.
How much does insurance cost for property managers?
A small property management business will pay a lower price for insurance than a larger company.
Factors that affect property manager insurance premiums during underwriting include:
- Real estate services offered
- Business property and equipment
- Business income
- Types of insurance purchased
- Policy limits and deductibles
How do I get property manager insurance?
It's easy to get property management insurance coverage if you have your company information on hand. Our application will ask for basic facts about your business, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance with Insureon in three easy steps:
- Complete a free online application.
- Compare insurance quotes and choose policies.
- Pay for your policy and download a certificate.
Insureon's licensed insurance agents work with top-rated U.S. providers to find the right insurance coverage for your property management business, whether you work independently or hire employees.
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FAQs about insurance for property managers
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Why is business insurance necessary for property managers?
Business insurance is essential for property managers because it helps meet legal requirements and protects against common risks that could lead to costly lawsuits or financial setbacks. In some cases, coverage is mandated by state law. For example, commercial auto insurance is required if your business owns vehicles, and workers’ compensation insurance is typically mandatory if you have employees.
In California, property management businesses must carry commercial auto coverage for company vehicles and workers’ comp if they employ one or more people. Requirements vary by location, so it’s important to understand the laws in your state.
Even when insurance isn't legally required, it’s still highly recommended. General liability insurance, for example, isn't mandated by law but is often the first policy small business owners buy. It offers essential protection against third-party claims of bodily injury, property damage, or personal injury—risks that are especially relevant when managing residential or commercial properties.
Insureon's licensed insurance agents can help property managers build a custom insurance package tailored to their state's legal requirements and specific exposures. Whether you manage a single apartment complex or a portfolio of commercial buildings, our team can guide you toward the right coverage for lasting protection.
Are property managers required to carry errors and omissions insurance?
State laws determine whether errors and omissions (E&O) insurance for property management companies is required or not. In some states, property managers must hold a real estate license to operate legally—and certain real estate licensing boards require proof of E&O insurance to obtain or maintain that license.
Even when E&O insurance isn’t legally required, it’s still strongly recommended. Also known as professional liability insurance or professional indemnity insurance, this coverage helps protect property managers against costly lawsuits stemming from mistakes, oversights, negligence, or perceived failures in their professional services.
E&O insurance for property management companies can cover claims related to:
- Wrongful eviction
- Miscalculation of rent
- Failure to follow lease terms
- Missed deadlines for repair or replacement of broken building equipment
Even a simple clerical error or miscommunication can lead to a lawsuit. Without errors & omissions coverage, property managers could be responsible for legal fees, settlements, and court costs out of pocket.
Do property management owners need additional property coverage?
Yes, if you own the buildings you manage, you’ll likely need additional insurance coverage to fully protect your property and financial investment, such as:
- Lessor’s risk only (LRO) insurance is designed for building owners who lease space to tenants, such as office buildings, apartment complexes, or retail units. It helps cover legal fees and damages if a tenant or visitor sues over injuries or property damage that occur on the premises.
- Building insurance helps pay to repair or replace your physical structure if it’s damaged by fire, storms, vandalism, or other covered events. This coverage is essential for protecting the value of your real estate assets.
Together, these policies help property management business owners safeguard both their liability exposure and the physical properties they own and rent out.
What other insurance policies should property managers consider?
In addition to general liability and errors and omissions coverage, property managers often need several other types of insurance to protect their real estate investments from a wide range of risks. This includes:
- Business income insurance, also known as business interruption insurance, helps cover lost income and operating expenses if your property management business is forced to temporarily close due to a covered event, such as a fire or storm.
- Commercial umbrella insurance provides extra liability protection by extending the limits of your other liability policies, such as general liability, commercial auto, and employer's liability. This is especially valuable if you manage multiple properties or have high-value assets that increase your exposure to lawsuits.
- Commercial property insurance protects your business’s different types of property—such as office space, furniture, and equipment—from damage caused by fire, theft, vandalism, or natural disasters.
- Commercial crime insurance covers financial losses due to crimes like employee theft, fraud, forgery, or burglary. This coverage is particularly important for property managers who handle tenant rent payments.
Together, these policies help property managers build a strong risk management strategy and ensure they’re prepared for the unexpected.