Property management professionals agree that operating a property can expose both the owner and the managing agent to significant risk. All risks cannot be eliminated, but a step can be taken regarding supplier partners.
Ensuring that these partners are not only adequately insured for the type of service they provide to the property, but perhaps more important, that the coverage under their respective policies extends to the property owner, the managing agent and their respective agents.
This is covered through the “Additional Insured” endorsement to the vendor’s policy in the event the supplier partner acts wrongfully or negligently in such a way that it exposes the owner or management company to liability. If this happens, the owner or manager can make a claim to the supplier’s carrier for coverage.
Steps necessary to ensure that vendors have added these coverages to their policies can be burdensome and time-consuming for property managers, who are more focused on running the property. And, mistakenly, many managers think they’ve satisfied this requirement by obtaining a Certificate of Insurance (COI). However, a COI is simply evidence that the vendor has insurance, and while that is certainly an important document to have, it provides no evidence of coverage, even if the property is listed as the “Certificate Holder” on that COI.
Keep in mind that something that on the surface may seem to be a risk-free service can expose owners/managers to significant liability. For example:
- The installation of an overhead door seems to be liability free because, after all, thousands are installed without incident. However, in one case, the door malfunctioned and severely injured someone.
- After a security officer, who was hired to protect residents and maintain the peace, had an altercation with a resident, that resident was fatally wounded.
- After a landscaping providers’ employees got into an altercation with a resident, it resulted in injuries to both individuals.
Because the supplier partners were required to add H.J. Russell & Company as an “Additional Insured,” there was no liability found during these unfortunate incidents.
— Yasmine S. Murray, Esq., Executive Vice President, General Counsel & Corporate Secretary for H.J. Russell & Company