Do you know how to implement risk minimisation processes that will actually help reduce the likelihood of an event that can harm the tenant, the landlord or the business? Not enough property managers do and it is an important area of this business because one preventable accident can do lasting damage.
Property Managers are becoming more educated and aware of how quickly a claim can be made following on from an incident or injury sustained in one of your property managements. Often these scenarios are regularly presented and a Property Manager simply accepts this as part of “what they do”.
The concept of risk minimisation is simply implementing processes to ensure that you are preventing any unforeseeable risk or harm against the business and or the landlord/tenant.
Property Managers are already often time poor and governed by much state legislation, so discussing insurance is one subject that can often be overlooked, however it is proving to be a necessity.
In an ideal world, it would be deemed ‘best practice’ that every management that you have within your portfolio will have three types of insurance cover – Building Insurance, Landlord Insurance and Renters Contents Insurance.
We often assume that a Landlord has some form of insurance, although we can become complacent and not physically sight a current certificate of currency (COC). A copy of this certification needs to be viewed yearly and kept in the client file.
If there is an incident that causes bodily harm or injury, there could be a potential claim made against your office. If this claim is made against one of your managements that has no public liability insurance then the office insurance will be triggered. Is this a scenario that you want to be faced with? Why should your office be financially impacted?
Some risk minimisation processes we recommend for you to implement within your office are:
- 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. Copies of these will be kept on file
- Quite a few offices are simply not taking on any new property managements unless the Landlord has full Landlord Insurance and Building Insurance in place with a reputable real estate-specific insurer
- Consider arranging Landlord’s Insurance for your clients. This way you will know that there is adequate cover in place and is current.
Property Managers don’t need to be insurance experts. A trusted real estate-specific insurer should be guiding you and your office through every step. Know the risks and understand how to prevent them with some simple processes. Let’s not be blasé about insurance as we will all be impacted by more and more claims in the future through higher premiums. Focus on prevention and ensure that your business and clients have adequate policies in place should an event occur.
Joanna Boyd is a real estate specialist insurer with Aon Risk Solutions. She will be speaking on specific ways you and your office can minimise risk at the I LOVE PM conference, QUT Gardens Theatre, Friday March 17. Buy your tickets today at REIQ.com.