Risk and Insurance Issues for Property Managers
The operational and contractual risks faced by property managers vary widely.
Some manage the overall maintenance and care of their clients’ properties but contract out the actual services, while others maintain their own staff for such work. Services may include cleaning, maintenance, collection of rents, payment of bills, screening and recruiting tenants, security, evaluating and purchasing insurance, and so on. Clients range from owners of large commercial and retail properties to owners of individual rental dwellings, and each operation will present its own unique risk exposures.
In evaluating risks, we recommend a four-step process in your consideration:
- First, try to imagine everything that might happen to cause financial loss.
- Second, make your best estimate of the probable maximum loss you would face in each case and assign it to one of three categories:
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