In this explosive real estate market in North Texas, real estate syndication has become a popular way to acquire real estate. Below, we’ve enclosed a list of exposures and coverage(s) that a property syndicator should consider in order to minimize their exposure to risk.
Property Insurance: This is the coverage for the building, office contents or equipment owned by the management company. It can also include laptops and computer hardware.
Employee Dishonesty: This protects the property manager from theft by their own employees including cash, check, or money orders.
Business Auto Coverage: This can include the vehicles owned by the management company, as well as insuring the management company for employees using their own vehicles during the course of employment.
Workers Compensation: This exposure can vary. Some managers employee all their personnel while some managers put the local personnel under direct employment of the property owner. Interestingly enough, Texas is one of the only states where workers compensation is optional.
General Liability: Most general liability coverage for a property will provide coverage for the property manager as well, but it also makes sense for the management company to have general liability coverage in the name to avoid any gaps. Why depend on another company to insure your risk?
Errors & Omissions: This is professional liability that will include coverage for discrimination.
Directors & Officers Insurance: This policy covers claims resulting from managerial decisions that have adverse financial consequences.
Master Insurance Policy: Some real estate syndicators will put together a master policy to include all of the insurance coverage for their properties.
While this is certainly not a complete list, it is hopefully providing enough information to shed some light on the various gaps in exposure that can lead your business prone to risk. At Ramey King, we’d love the opportunity to talk more with you about protecting your business today.