All Forum Posts by: Phil Workman

In my everyday experience interacting with landlords, I have noticed a few things that are surprising to me. Often times the smaller scale landlord/investor does not take into consideration certain liability exposures that could completely undermine their respective investments. 

One may ask, what do I mean by the above statement- As many or all of you would agree, our society is quick to litigate against each other.  Because of this I believe it is important to mitigate as much liability risk as possible. Below I want to talk about some things one should know about landlord liability and exposure: 

1) Landlords can be held responsible for injuries that occur on rented premises if it is proven that the landlord has been negligent in maintaining he property. Because of this it is important to periodically inspect the premises and document it. Many landlords I know only inspect the premises at the beginning/end of the lease term. 

2) Animals by their nature pose a big concern when it comes to landlord liability exposure. I am sure most of you are aware of this one. This is why many landlords prohibit pets or charge tenants additional money to have them on premise. If there is a lawsuit and the landlord "should have know" that the animal was potentially dangerous, the landlord can be held liable. 

3) Tenant behavior- Landlords also assume some responsibility for their tenants behavior. This obviously creates a huge liability exposure. If the landlord knows of unlawful or other behavior is happening, they have an obligation to take steps to rectify this issue- including evicting if necessary. 

Now that we've discussed some potential ways a landlord can be exposed from a liability standpoint, let's discuss a few simple ways to mitigate that exposure as much as possible.   

The first and foremost method to mitigate these exposures is to carry adequate liability coverage. Going back to my experiences on daily basis= I run into a great deal of landlords who are only carrying 100k of liability coverage on their investment properties. In my opinion, one should carry a minimum of 300k of liability per property. Ideally one should also be carrying an excess liability umbrella over all of their properties as well. 

Hopefully this provides a few helpful insights for landlords out there who may be interested in minimizing their liability exposures. 

@Brandon Foard I completely agree with you as well! The agent should be an advocate for the insured. 

@Jason Bott For some reason the mention did not work from my phone- I appreciate your feedback. 

@Jason Bott great point. My objective here was to educate the smaller scale investor/Landlords who are typically carrying LLP vs Commercial packages. In those cases most insurers will look at frequency vs. Loss amount.

Have you ever been truly educated on the claim process by your insurance agent??? If you answered yes, that is wonderful. However, if your answer is NO, that is where I can help. In my 7 years in the insurance/financial services industry, I find that more often than not the answer to that question is "No". 

This is concerning to me- in my opinion, during the insurance sales process, agents should ALWAYS go over tips/what to expect during the claim process. For those of you reading who may not have had an agent do this for you, please see some of my top tips when it comes to the claim process: 

• Before filing a claim- ALWAYS talk to your agent first. Why is this? One wants to speak with there agent to make sure the loss is A) a covered loss B) Exceeds your deductible. 
• The above may very well happen if you go ahead and file a claim prematurely. 

Now let's talk about some costly consequences of the above scenarios happening- If the claim is filed and an adjuster representing your insurance company comes to assess the damage and it is determined that the loss is A) NOT covered or B) Does NOT exceed your deductible- You most likely will LOSE a claim free discount of some kind, it will go on your claim record (depending on the insurance company they will look back at this for 3-5 years), AND your rates could be surcharged because of the claim. 

All of these negative consequences can be avoided all by the agent going the extra mile and educating the insured. 

Hopefully this was resourceful for some of you. Thank you!

Thank you for the info. I was able to connect with James