Property management is a critical aspect of owning a property. A property management agreement is essential to ensure that your property is well-maintained and continuously occupied. A crucial aspect of such an agreement is the insurance clause.

The insurance clause is a provision in a property management agreement that outlines the insurance requirements for the property. It specifies what type of insurance coverage the property management company must maintain on behalf of the property owner.

The insurance clause covers two essential types of insurance: liability insurance and property insurance.

Liability Insurance

Liability insurance is necessary to protect against any damage or injury that may occur on the property. The insurance covers the cost of any legal claims, settlements, or judgements that result from a third party injured on the property. The property management company must maintain sufficient liability insurance that meets the standards set forth in the agreement.

Property Insurance

Property insurance is necessary to protect the property owner against any loss, damage, or theft of personal property. It covers the cost of repairing or replacing any damaged property. The property management company must maintain sufficient property insurance that meets the standards set forth in the agreement.

A well-drafted insurance clause should also include the following:

– A requirement for the property management company to provide proof of insurance coverage on a regular basis.

– A requirement for the property management company to name the property owner as an additional insured on the liability policy.

– A requirement for the property management company to notify the property owner immediately of any changes to the insurance policy.

It is crucial to note that the insurance clause is not a substitute for the property owner’s insurance policy. The property management company’s insurance policy should be in addition to the owner’s insurance policy.

In conclusion, the insurance clause is a critical provision in any property management agreement. It helps ensure that the property owner is adequately protected against any unforeseen mishaps that may occur on the property. As a property owner, it is essential to consult with an experienced copy editor with SEO skills to ensure that your insurance clause is well-drafted and meets all legal requirements.