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Property Management Errors & Omissions Insurance

Real estate investors who self-manage their properties are at risk of liability claims due to inadequate work or negligent actions while performing property management duties, but standard premises liability policies provide little to no protection.  

REInsurePro offers a property management insurance option to help protect investors in the event of such claims. Policies fit within our monthly reporting form and can be standalone or added to existing coverage. 

At-A-Glance

PMEO Coverage

Property Management Errors & Omissions (PMEO) coverage is Professional Liability coverage to assist in situations where a tenant alleges that the investor was negligent or failed to perform property management duties as promised in the lease. Coverage includes: 

  • $1MM limit of liability for exposures on the residence premises due to property management activities not covered by premises liability 
  • $50K sublimit for tenant discrimination (this coverage can apply to fair housing laws) 
  • Legal defense costs (including attorney fees, settlements, court costs, etc.) within the coverage limit 
  • Coverage may extend to errors and contract performance disputes 

This policy is subject to a $2K deductible. 

Availability & Exclusions

REInsurePro’s Property Management Errors & Omissions Insurance does not extend to or include: 

  • Properties managed by anyone who is not the owner of the residence 
  • Property owners who have their own property management business and/or manage properties for other owners 
  • General contractor operations 
  • Crime coverage 
  • Wrongful eviction 
  • Business liability coverage for an office space 

PMEO Cost

The cost of Errors and Omissions insurance for self-managed properties is $2 per unit per month.

PMEO coverage through REInsurePro is unavailable for properties in Arkansas, Illinois, Indiana, Maine, New York, Washington, Wyoming, and any location where REInsurePro does not provide coverage.

Property Management Errors & Omissions FAQ

Frequently asked questions and answers about REInsurePro’s property management insurance coverage.

REInsurePro’s PMEO is available for real estate investors who manage their own properties without the assistance of a professional property management company or hired individual.

Errors and Omissions (E&O) or Professional Liability is for businesses that provide a specialized service or play an advisor role, such as financial services, lawyers, and consultants. E&O insures against claims made when the work provided or advice given causes harm to the recipient of those services. Depending on the policy and carrier, E&O can cover legal fees, court costs, and settlements. REInsurePro’s property management liability insurance offering is designed to protect investors who self-manage their properties from various claims of negligence or failure to perform their duties. 

When comparing the activities of a landlord to a property manager, there can be some gray areas. Essentially, the role of a landlord is to own the property and provide for its ability to function properly (e.g., plumbing, gas, heat, and water). The property manager (which can be, but doesn’t have to be a third party) handles most of the responsibility for maintaining the property and managing the relationship with the tenant. Specific activities can include: 

  • Setting rent rates based on market standards and collecting rent from tenants. 
  • Advertising property vacancies, showing the location to potential tenants, performing background or credit checks, screening potential tenants, finalizing lease agreements, and coordinating placement. 
  • Paying bills and managing the budget and financial records for the property. 
  • Property maintenance including responding to tenant requests, performing maintenance or hiring contractors when necessary, and updating facilities when warranted. 
  • Resolving tenant complaints and enforcing lease requirements. 

 

If your investor client is performing these duties but is not a property manager as their primary business, it can be challenging to find Errors & Omissions coverage to protect from lawsuits that arise in the course of these activities. 

Learn more about PMEO coverage

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