At the annual California NARPM conference, we were fortunate to talk with Curt Bulloch from Bulloch Insurance Brokers. There are a couple of questions that we always have about insurance policies, and he spoke to us about the top question: the difference between being named as an additional insured and an additional interest on a landlord’s policy.
Additional Insured vs. Additional Interest
There is a big difference between additional insured and additional interest. When you’re named as an additional interest, it just means you’re going to get a copy of that client’s policy. So, when there’s a renewal policy in place, you’ll be notified. However, if you’re named as an additional insured on the policy, which you should be as a property manager, that will protect you under the liability protections in the policy. This means if there’s a slip and fall or an accident that results in a lawsuit, you are covered by the landlord policy and the owner that you are managing for.
Additional Insurance and Protection
Recently, we heard about a property manager who was not named on a policy as an additional insured, and had to hire an attorney to answer complaints coming from a lawsuit. A lot of legal costs added up, and those had to be passed on to the landlord due to the property management agreement. Naming a property management company as an additional insured provides the landlord with more insurance and financial protection as well as the property manager. It also doesn’t cost any more. When you use a professional property manager, you usually get a discount on your policy. There are also special coverages for laws like the new bed bug provisions. The policy can cover eviction expenses and extended loss of rental income.
The main mistake that landlords make when it comes to insurance is under-insuring. You don’t want too little liability or a lack of coverage for fair housing or discrimination claims. Many landlords also lose money because they don’t have any loss of income or loss of rent coverage.