Hiring a property manager is smart, but it doesn’t replace the insurance you, as the property owner, should carry. In fact, most management agreements and lenders require specific coverages—and the right policy lineup can save you from costly surprises. Here’s what Los Angeles Property Management clients should know, and how TGN Property Management recommends you structure coverage to protect your investment.Is insurance legally required to hire a property manager?There’s no blanket California law that forces you to buy insurance just because you hire a manager. However:
- Most mortgages require property and liability insurance.
- Most Los Angeles Property Management contracts require owners to maintain minimum liability limits and name the manager as an additional insured.
- Risk in LA is real—water leaks, habitability claims, vendor injuries, dog bites, and earthquakes. Going without coverage is gambling with your asset.
Core policies every landlord should carry
For single-family rentals, condos, and 2–4 unit properties, look for a landlord (DP-3) policy. For 5+ unit buildings, a commercial package is typical. At a minimum, owners working with Los Angeles Property Management teams should include:
- Property coverage (building): Replacement-cost coverage for the structure, including perils common to LA (fire, vandalism, wind events). Add ordinance or law coverage to handle code upgrades after a loss.
- Liability coverage: Protects you from third-party injury or property damage claims (e.g., slip-and-fall on stairs). Typical target limits are $1,000,000 per occurrence / $2,000,000 aggregate for small properties; larger assets often pair this with a $2–$5M umbrella.
- Loss of rents (business income): Replaces rental income if a covered loss forces tenants out during repairs. Aim for at least 12 months of coverage.
- Sewer/water backup: Common and often excluded—add this endorsement.
- Equipment breakdown: Helps with sudden mechanical failures (e.g., HVAC or boiler in multifamily).
- Wrongful eviction/discrimination defense: Many carriers offer a tenant discrimination/wrongful eviction endorsement—valuable given California’s regulatory environment.
- Animal liability: If pets are allowed, ensure your policy doesn’t exclude dog-related claims.
- Catastrophe options: Earthquake insurance is separate in California and critical to consider. Flood insurance is separate as well and required in certain FEMA zones.
Condo tip: If your rental is a condo, the HOA’s master policy does not cover your interior finishes, personal liability as a landlord, or loss of rent. You’ll likely need a landlord HO-6 policy to fill those gaps.How your property manager should be listed on your policyA common point of confusion in Los Angeles Property Management is how to list the manager. Best practice:
- Additional insured: Name the management company (e.g., TGN Property Management) as an additional insured on your liability policy. Insurers typically use an endorsement like “Additional Insured – Managers or Lessors of Premises.”
- Waiver of subrogation: Where available, add a waiver in favor of the manager to reduce finger-pointing between insurers after a claim.
- Certificate of Insurance (COI): Provide an annual COI to your manager showing limits, effective dates, endorsements, and 30-day notice of cancellation.
This setup aligns with most management agreements and helps ensure defense and coverage if a claim involves management operations at your property.What insurance does your Los Angeles Property Management company carry?
Your policy protects you; your manager should carry their own protections for their professional services. Reputable firms like TGN Property Management maintain:
- General liability: For third-party injury or property damage related to company operations.
- Professional liability (Errors & Omissions): Covers alleged mistakes in leasing, trust accounting, or compliance work.
- Workers’ compensation: For the company’s employees.
- Crime/fidelity bond: Protects against theft of client funds.
- Cyber liability: Increasingly important, given online applications, portals, and stored resident data.
Important distinction: a manager’s insurance is not a substitute for the owner’s policy. It complements yours and helps reduce disputes when a claim crosses responsibilities.Vendor and contractor insuranceMany claims in Los Angeles start with a maintenance call. Protect yourself by ensuring:
- Vendors are licensed, insured, and, where applicable, have workers’ compensation.
- Your Los Angeles Property Management company collects and tracks vendor COIs and endorsements before work starts.
- High-risk tasks (roofing, tree trimming, electrical) are assigned only to properly insured specialists.
Without proper vendor coverage, you could face liability if a worker is injured at your property or causes damage that your carrier excludes.Common claim scenarios (and which coverage typically responds)
- Slip-and-fall on stairs: Your liability (and umbrella) responds. Additional insured status can help cover the manager if named in the suit.
- Burst pipe damages units and forces a vacancy: Property coverage handles repairs; loss-of-rents covers income during restoration.
- Dog bite in a shared courtyard: Your liability responds; confirm no animal exclusions.
- Vendor falls from a ladder: Vendor’s workers’ comp should respond first; your liability could be implicated if the vendor lacks proper coverage.
- Kitchen fire spreads: Property coverage repairs the structure; loss-of-rents covers downtime. Ordinance or law may pay for required code upgrades.
- Alleged wrongful eviction: Specialized endorsement or tenant discrimination coverage may be needed.
Renters insurance and liability add-ons
Many Los Angeles Property Management companies require residents to maintain renters insurance. Benefits include:
- Coverage for the resident’s belongings and temporary housing after a loss.
- Resident liability coverage for tenant-caused damage (e.g., kitchen fire, overflowed tub).
- Additional interest listing: Your manager can be listed as “additional interest” to receive notice of cancellation. Note: additional interest is not the same as additional insured.
FAQ:
Do I still need insurance if the manager has it?
Yes. Your manager’s policies protect their business first. As the property owner, you’re the primary target in most premises liability and habitability claims. Your lender, management agreement, and prudent risk management all point to maintaining your own robust coverage.
How to align your policy with your management agreement
Before you sign:
- Confirm the minimum liability limits required by your Los Angeles Property Management agreement.
- Ask your broker for endorsements naming TGN Property Management as additional insured and, where possible, adding a waiver of subrogation.
- Verify loss-of-rents duration and that property limits reflect true replacement cost.
- Review exclusions (breed restrictions, short-term rental exclusions, mold limits).
- Calendar renewal dates so your COI is always current.
Quick checklist for owners
- Landlord or commercial package policy in force
- Liability at $1M/$2M or higher; umbrella as needed
- Loss-of-rents for at least 12 months
- Additional insured endorsement for TGN Property Management
- Waiver of subrogation where available
- Ordinance or law, water backup, equipment breakdown
- Earthquake/flood evaluated and quoted
- Vendor COIs tracked by your Los Angeles Property Management team
- Resident renters insurance required and monitored
The TGN Property Management difference
Los Angeles Property Management works best when insurance, compliance, and operations are aligned. TGN Property Management:
- Sets clear insurance requirements in the management agreement
- Coordinates COIs and renewal tracking
- Works with licensed, insured vendors
- Advises owners on practical coverage options to reduce risk and downtime
Final thought and next stepsInsurance isn’t a box to check—it’s the safety net that keeps a repair from becoming a financial crisis. When you hire a property management company, you still need your own coverage, and it should be tailored to your asset, financing, and risk tolerance. For guidance tailored to Los Angeles Property Management, connect with TGN Property Management. We’ll review your goals, explain the insurance provisions in plain English, and coordinate with your broker so your property is protected from day one.