Why Property Managers Should Embrace Risk Management
In today’s litigious world, property managers are required to become more educated and acutely aware of how quickly a claim can be made following an incident or injury sustained in a property which is under their management. While some managers may see dealing with this sort of scenario as part of their role, making sure those involved have an understanding of strategies which can decrease the risk to all parties involved makes sense.
The concept of risk minimisation for property management, is simply implementing processes which ensure that any unforeseen risk of harm against the business, landlords or tenants. In real terms, these strategies could take the form of updating property inspection practises and ensuring appropriate insurances are held.Despite the vast majority of property managers being extremely time poor, understanding and discussing how managed properties can have their exposure to risk minimised is important.
Ideally, it would be deemed ‘best practice’ that every management has three types of insurance cover – Building Insurance, Landlord Insurance and Renters Contents Insurance. Some property managers may assume that Landlord’s have some sort of insurance, without a Certificate of Currency. By simply starting the conversation around insurance’s with the Landlord, these assumptions can then be turned into facts.
Property Managers don’t need to be insurance experts. A real estate-specific insurer should be available to provide help and guidance through every step. However, knowing the risks and understanding how to prevent them with some simple processes should be common knowledge. As an example, if there is an incident that causes harm or injury, there could be a potential claim made. If this claim is made against a managed property that has no public liability insurance then the Agency office insurance will be triggered.
This scenario could financially impact all involved, including the Agency.
Risk minimisation processes which we recommend
- Not physically opening a property to prospective tenants until you have obtained a current COC outlining the Landlord’s Public Liability Insurance
- Ensuring all contractors representing the business have appropriate cover, such as; Public Liability Insurance, Work Cover and relevant trade licensing.
- Consider arranging Landlord’s Insurance for your clients as part of a service offering. This way you will know that there is adequate cover in place and is current.
DISCLAIMER: The information contained in this article is provided for general information purposes only. The information should not be used or relied on as a substitute for legal advice. If you require legal advice concerning a specific fact or situation, you should seek independent legal advice. MetroCity Realty accepts no liability or responsibility for any loss occurring as a result of anyone acting or refraining from acting on the basis of the information contained herein. Whilst MetroCity Realty has taken all reasonable measures to ensure that the information contained in this fact sheet is correct, MetroCity Realty gives no warranty and accepts no responsibility for the accuracy or the completeness of the information.