How much does property manager insurance cost?
Key property management insurance policies and their expected costs
Here are the top business insurance policies purchased and the average cost of property manager insurance:
- General liability insurance: $44 per month
- Errors and omissions / professional liability insurance: $83 per month
- Workers' compensation insurance: $73 per month
- Business owner's policy: $212 per month
- Commercial auto insurance: $167 per month
- Cyber insurance: $58 per month
- Surety bonds: $21 per month
Our figures are based on the median policy costs for property managers who request quotes through TechInsurance. The median provides a better estimate of your expected insurance rates because it excludes outlier premiums.
General liability insurance for property managers
Property managers pay an average of $44 per month, or $528 annually, for general liability insurance, the most common type of liability coverage.
General liability insurance protects small businesses against third-party risks, such as a prospective tenant falling and breaking an arm during a property showing.
This policy also covers attorneys' legal fees and other defense costs if someone sues your business over advertising injuries, such as copyright infringement or defamation.
The average general liability policy for property managers that purchase from TechInsurance:
Premium: $44 per month
Policy limits: $1 million per occurrence; $2 million aggregate
The per-occurrence limit is the maximum amount your insurance provider will pay for a single covered incident. The aggregate limit is the maximum the insurance provider will pay for all claims during the policy period.
General liability insurance costs depend on a variety of factors, including the coverage limits and deductible you choose, your business size, the types of services you provide, your annual income, and any additional insured endorsements you choose to add.
How much is a $1 million dollar insurance policy for a real estate business?
Many property managers elect to carry a $1 million liability insurance policy for their business, though some may opt for more or less coverage depending on their needs.
A $1 million policy protects your property management company up to a $1 million limit for covered damages or losses for a single claim. 89% of TechInsurance's customers who are real estate professionals choose a policy with a $1 million limit.
Factors that can affect your policy's cost include your annual revenue, industry, business size, location, number of employees, and claims history.
Errors and omissions / Professional liability insurance for property managers
Property managers pay an average of $83 per month, or $996 annually, for errors and omissions insurance (E&O), also called professional liability insurance.
E&O covers the cost of client lawsuits over claims that your work was negligent, late, never completed, or otherwise unsatisfactory.
For example, the owner of an apartment complex hires a property management company to oversee their building. The management company fails to adequately screen tenants, leading to significant property damage and costly evictions.
The property owner could sue the management company to recoup their losses. In this case, the professional liability policy would help pay legal defense costs and settlement fees.
Below is the average cost of E&O insurance for property managers who buy from TechInsurance:
Premium: $83 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $1,000
A variety of factors influence the cost of E&O coverage, including the number of tenants you have, the size of your leased properties, and the number of workers you employ. Reducing your risks also helps you avoid liability claims and lower your costs.
Workers’ compensation insurance for property managers
Property managers pay an average of $73 per month, or $880 annually, for workers’ compensation insurance.
This policy covers medical expenses and lost wages related to workplace injuries for property managers and their employees. It would not cover bodily injuries or medical bills for tenants or renters.
Workers' comp typically includes employer's liability insurance to protect against lawsuits from workers injured on the job.
Most property management companies that hire staff must purchase workers' comp to comply with state requirements and avoid penalties.
For example, all property management firms in New York, California, and Pennsylvania must purchase workers' comp if they have one or more employees.
In Florida, businesses with four or more employees need coverage, while in Texas, coverage is optional but highly recommended.
Independent contractors and sole proprietors are encouraged to purchase workers' comp as well, even though it's typically not required. This is because health insurance plans can deny claims for injuries related to your job.
The cost of workers' comp depends on several factors, including the number of employees you have and their occupational risks.
You can save money on workers' comp coverage by classifying your employees correctly and ensuring you're regularly engaging in risk management to avoid work-related injuries and medical claims.
Find workers' comp requirements in your state
Business owner's policy for property managers
Property managers pay an average of $212 per month, or $2,547 per year, for a business owner’s policy (BOP).
A BOP bundles general liability coverage with commercial property insurance to navigate third-party risks and protect your business property. Most business owners save money by bundling the two policies into one.
This bundle protects your business against customer property damage and injuries, vandalism to your property, and damage to your business equipment.
Keep in mind that a BOP will not cover damage to tenants' personal property. For that, tenants will need a separate rental property insurance policy. Renters insurance would cover tenant belongings, furniture, and other items within the dwelling.
The average BOP for property managers that buy from TechInsurance:
Insurance premium: $212 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $1,000
Small, low-risk commercial property management offices are often eligible for a business owner's policy.
Larger, higher-risk businesses should consider a commercial package policy (CPP), which combines your general liability coverage with property insurance and offers more flexibility than a BOP. The CPP policy cost for property managers is $461 per month, or $5,530 per year.
Endorsements, such as business interruption insurance or equipment breakdown coverage, are recommended to help prevent financial losses. For example, if a covered event forces your business to cease operations for an extended period, your business interruption insurance would help cover expenses related to the closure.
The cost of a business owner's policy depends on several factors, including the value of your business property, your location, your annual income, your industry, and the number of employees you have.
Commercial auto insurance for property managers
Property managers pay an average of $167 per month, or $2,007 per year, for commercial auto insurance.
Commercial auto insurance covers legal costs and medical expenses if your company vehicle is involved in an accident that results in injuries or property damage. It typically also covers vehicle theft, weather damage, and vandalism.
Most states require commercial auto insurance for business-owned vehicles. For personal, rented, or leased vehicles used for work purposes, consider hired and non-owned auto insurance (HNOA) instead. A standard commercial auto policy will not cover any vehicle that isn't company-owned.
The cost of commercial auto insurance depends on various factors, including the policy limits you select, your coverage options, the number and value of your vehicles, and the driving records of anyone permitted to drive.
Cyber insurance for property managers
Real estate businesses, including property management companies, spend an average of $58 per month, or $692 per year, on cyber insurance. This policy is often known as cyber liability insurance or cybersecurity insurance.
Cyber insurance provides financial assistance to your business after a cyberattack or data breach. It covers cyber extortion payments, data breach investigations, and expenses related to complying with your local data breach laws.
A cyber insurance policy is necessary for commercial property managers who store sensitive client information, such as names, email addresses, home addresses, credit card details, and Social Security numbers.
How much you pay for cyber insurance depends largely on the amount of sensitive information you handle at your property management business.
Surety bonds for property managers
Real estate professionals, including property managers, spend an average of $21 per month, or $250 per year.
Surety bonds provide reimbursement payments for your client if you're unable to fulfill the terms of a contract or agreement.
Some property owners may require a surety bond before they agree to sign a contract or work with you.
The cost of a surety bond depends mostly on the size of the bond you choose to purchase.
Top factors impacting property manager insurance costs
Property manager coverage costs can vary significantly for small business owners. Factors that may influence your premiums during underwriting include:
- Type and value of properties. Residential buildings, single-person homes, condos, and commercial properties will all carry different risks and costs. For example, a small residential building will cost considerably less than a large commercial building with more risks.
- Number of units and properties. The size and scope of the properties that you manage will impact how much you pay for insurance. More tenants and larger properties mean greater risk and higher insurance costs.
- Claims history. An easy way to save money on insurance is to choose higher deductibles or lower policy limits. Businesses and professionals with a history of insurance claims will likely pay more for small business insurance because prior claims signal a higher risk to insurers.
- Value of business equipment. If your property management company has expensive equipment and vehicles, it'll cost more to insure than it does for more modest operations.
- Coverage limits and deductibles. How much coverage you pick will directly affect how much you pay. Picking the right type of insurance and policy limits for your unique insurance needs can help you avoid overpaying for policies and additional coverage you may not need.
- Number of employees. The more employees you hire, the greater the likelihood of incidents and errors, which increases your rates.
- Business location. Property values, weather conditions, healthcare costs, and crime rates vary by location and can affect the price of some policies.
- Business size and revenue. Bigger businesses that earn more are considered high risk, leading to higher insurance costs.
How do I get affordable property manager insurance with TechInsurance?
TechInsurance helps property managers, commercial landlords, real estate agents and brokers, and other real estate professionals find affordable insurance coverage in three easy steps:
- Fill out a free online application with details about your business.
- Compare custom quotes from top-rated U.S. insurance providers.
- Select a policy and pay the premium to begin coverage.
Talk with a licensed insurance agent to get answers to questions about your risks and the best types of coverage for your business needs.
After you select your policies, you can download a certificate of insurance for proof of coverage. Most small businesses receive proof of coverage within 24 hours of applying for quotes. This gives you the peace of mind to operate your business knowing your finances are protected.
