There are two types of policies that are essential for the Honolulu property manager who is responsible for managing your rental home. These policies are a General Liability policy and an Errors & Omissions policy (which is generally known as an E&O insurance). Your property manager should have these two types of insurance when they are hired to manage your Honolulu investment property.
Property Management Honolulu: Coverage Amounts
The coverage amount will vary depending on the size of your property management company and the project or the property that will be managed. The general amount for these insurance products is $1 million worth of coverage per policy.
Comparing Liability and E&O Policies
The difference between liability insurance and errors & omissions is that general liability will protect you against day to day business activities for managing a Honolulu investment home. This includes things like employee misconduct or consumer liability. E&O insurance provides coverage for things that are specific to the real estate and property management industries. For example, if you fail to disclose lead based paint or you violate fair housing laws, or you improperly enforce the terms of a lease, then E&O coverage will kick in.
What These Policies Will Not Include
Neither of these policies offer coverage for Honolulu owners or the manager for property-specific issues. Water losses, floods, fire, or a dog bite incident will require different insurance. Those things fall under a renter’s insurance policy, a homeowner’s insurance policy (aka landlord insurance policy), or your commercial property policy.
There are benefits to ensuring your property manager is properly insured. If you or a tenant or a consumer has a liability claim, you know there will be some coverage in place to protect you and the consumer as well as your tenant. Before you hire a management company, make sure you see proof of this insurance coverage.
If you have any questions about property management in Honolulu, please contact us at Certified Property Solutions.
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