PM company-additionally insured

[Lance H.]

Hi everyone, I'm in the process of hiring a property management company for the first time. In their contract they require that I add them as additionally insured on my Insurance policy. Is this pretty standard practice or something I should be concerned with? Thanks Lance

[Robert Gilstrap]

Don't you just love uninformed comments like "the PM should have their own insurance"?

Every property manager on Earth (if they know what they are doing) would require you to add them as additional insured. This is really meant to protect you as well. When a lawsuit is filed the attorney is going to sue everybody; the owner, the PM, etc.  If the PM is listed as additional insured then the insurance company must defend both of you in court on the liability claim. If you didn't have that in place what's going to happen? Well your PM will come to you seeking coverage for his defense expenses because I can assure you that in your mgmt agreement you have agreed to indemnify the PM against any claims. It costs you nothing to add an additional insured and you should absolutely do it.