Property management companies are fiduciaries — they collect rent, hold security deposits, approve vendors, sign contracts, and make maintenance decisions on behalf of property owners who trust them completely. Each of those functions creates a distinct liability exposure. E&O covers management errors. Crime covers embezzlement. GL covers premises incidents. Fair housing EPLI covers tenant discrimination claims. A complete program addresses all four — and most property management submissions miss at least two of them.
Professional Liability (E&O)The most important specialty coverage for property managers. Covers claims arising from errors or omissions in property management services — wrongful eviction, failure to collect rent, lease negotiation errors, security deposit mishandling, failure to disclose property defects, and negligent vendor selection. A property manager who fails to enforce lease terms, misplaces security deposits, or approves an unqualified tenant creates E&O exposure that GL will not cover.
Commercial General LiabilityCovers bodily injury and property damage arising from managed property operations. A tenant who slips on an unrepaired common area walkway, a visitor injured in a parking lot, or a contractor injury on managed property creates premises liability. GL is essential but is not a substitute for E&O — the two coverages address entirely different exposures.
Crime / Employee DishonestyProperty managers handle significant client funds — security deposits, rent collections, vendor payments, and reserve accounts. Employee theft, embezzlement of client funds, fraudulent vendor invoices, and forgery are recurring loss categories. A property manager who embezzles rent deposits exposes both the management company and the property owners. Crime coverage with employee dishonesty, computer fraud, and funds transfer fraud is essential.
Workers' CompensationProperty management companies employ maintenance staff, leasing agents, property inspectors, and office personnel. Maintenance workers face elevated WC risk from falls, tool injuries, and chemical exposures. WC is mandatory in virtually every state and must cover all classifications correctly — maintenance staff carry higher rates than office staff.
Hired and Non-Owned AutoProperty managers and leasing agents drive personal vehicles and rented vehicles for property inspections, showings, maintenance coordination, and vendor meetings. If an employee causes an accident in a personal vehicle while on company business, the employer can be named in the lawsuit. Hired and non-owned auto provides coverage for this exposure without requiring the company to own vehicles.
Employment Practices Liability (EPLI)Property management companies face significant EPLI exposure from two directions — their own employees (harassment, discrimination, wrongful termination) and from tenants alleging Fair Housing Act violations. A leasing agent who steers applicants based on race, national origin, or family status creates federal Fair Housing liability that goes beyond standard GL. EPLI covering tenant fair housing claims is a specialty endorsement that should be specifically confirmed.
Commercial UmbrellaA serious premises liability incident at a managed property — a tenant death from a carbon monoxide leak, a violent crime in an inadequately secured parking area, a structural failure — can produce claims exceeding underlying GL limits. Property managers handling large residential or commercial portfolios should carry umbrella limits of $2M or more.
ACORD 125 — Commercial Insurance ApplicationPrimary submission document for property management accounts. Capture total number of units managed, mix of residential vs commercial properties, total portfolio value under management, and whether the PM company owns any of the managed properties. Owned property creates additional insurable interest beyond the management liability.
ACORD 126 — Commercial General Liability SectionRequired for GL coverage. Describe all property management operations — residential leasing, commercial leasing, HOA management, short-term rental management, maintenance coordination. Each type of managed property has different liability characteristics and must be separately described.
ACORD 130 — Workers Compensation ApplicationRequired for WC. Property management employee classifications include property managers/leasing agents (8742 or 8810), maintenance and repair staff (5183 or specific trade codes), and clerical staff (8810). Each classification must be correctly identified with accurate payroll figures.
→How many residential units does the company manage? How many commercial units?
→Does the company manage HOAs, condominiums, or common interest developments?
→Does the company manage any short-term rentals (Airbnb, VRBO)?
→Does the company own any of the properties it manages, or is it purely a third-party manager?
→What is the total value of properties under management?
→What is the annual gross management fee revenue?
→Does the company hold security deposits in a trust or escrow account?
→Does the company collect and disburse rent on behalf of property owners?
→Does the company have authority to approve vendors and sign contracts on behalf of owners?
→Does the company have in-house maintenance staff or does it coordinate outside vendors only?
→Do employees use personal vehicles for property inspections, showings, or maintenance coordination?
→Has the company had any E&O claims or tenant discrimination complaints in the last 5 years?
→Has the company had any employee dishonesty incidents or trust account discrepancies?
→Does the company manage properties in multiple states?
→Is the company licensed as a real estate broker in each state where it manages property?