Top Business Insurance Policies for Nonresidential Property Managers (NAICS Code 531312)

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As businesses that manage commercial properties, nonresidential property managers face unique risks that require tailored insurance protection. This overview examines key insurance policies recommended for this industry based on common exposures and estimated pricing models.

Key Takeaways

  • General liability insurance is essential to protect against claims from injuries on managed properties.
  • Commercial property insurance helps cover costs of repairs from damage to buildings and structures.
  • Workers’ compensation is required by law to cover workplace injuries and lost wages.
  • Commercial auto provides liability protection for vehicles used as part of business operations.
  • Umbrella insurance increases liability protection above primary insurance limits.
  • Directors and officers coverage protects personal assets from lawsuits related to business decisions.
  • Employment practices liability protects against expensive employment claims like wrongful termination.
  • Cyber liability helps cover costs associated with data breaches or network outages.
  • Errors and omissions protects professionals from claims of negligent mistakes or omissions.

Introduction

As businesses that manage commercial properties, nonresidential property managers face unique risks that require tailored insurance protection. This overview examines key insurance policies recommended for this industry based on common exposures and estimated pricing models.

General Liability Insurance

General liability insurance is an important policy for nonresidential property managers to protect their business from costly legal claims and lawsuits that may arise from operating and managing commercial properties. It helps cover expenses associated with third party injuries, property damage, and other liability exposures that frequently impact this industry such as slip and fall accidents at managed properties. The average annual pricing for general liability insurance for businesses in the nonresidential property managers industry is approximately $1,500 based on typical payroll and risk factors.

Category List
Benefits
  • Protection from legal claims and lawsuits
  • Covers bodily injury and property damage
  • Mitigates risks from accidents on your property
  • Provides coverage for operations like maintenance and repairs
  • Covers contractual liability from agreements with clients
  • Covers liability from property defects or problems
  • Protects against liability from property management services
  • Covers liability from property defects or problems
Use Cases
  • Protects against third party bodily injury and property damage claims from tenant accidents on the managed property
  • Covers lawsuits from slip and fall accidents, assaults, or other injuries occurring at the managed properties
  • Provides liability protection if a tenant sues for damages from issues like mold, carbon monoxide leaks, or other property deficiencies
  • Covers legal costs if the property manager is sued for negligent acts related to property maintenance and repairs
  • Protects the property manager if they are held legally liable for the actions of contracted service providers like cleaning crews, repair workers, or security personnel at the managed properties

Based on typical risks and exposures for businesses in the nonresidential property managers industry (NAICS code 531312), the estimated average annual pricing for general liability insurance is around $1,500. This price was derived based on industry data showing average payrolls of $500,000 and no past claims or losses for businesses of this size and operations.

Estimated Pricing: $1,500

Commercial Property Insurance

Commercial property insurance provides an essential layer of protection for nonresidential property management businesses. It can help offset costs from unexpected property damage or losses, while also protecting a company’s operations and income sources.

As a nonresidential property manager, commercial property insurance is essential to protect the buildings, tenants, and business operations. It provides financial protection from unexpected losses and reduces risk for the property owners and management company.

Category List
Benefits
  • Protection against property damage or losses from events like fire, wind damage, hail or lightning strikes
  • Coverage for equipment breakdown or mechanical failure of items like boilers, air conditioning units or elevators
  • Liability protection if a third party suffers bodily injury or property damage on your premises
  • Coverage for loss of business income or extra expenses like relocation costs if a building needs repairs after damage
  • Coverage for valuable documents and records in case of fire, water or other damage
  • Replacement cost coverage to fully repair or rebuild damaged property rather than its depreciated value
  • 24/7 claims service for quick response in the event of an emergency claim
Use Cases
  • Protect buildings and structures from fire damage
  • Cover losses from flooding, earthquakes, hurricanes or other natural disasters
  • Provide liability coverage if someone is injured on your property
  • Cover loss of rental income if the property can’t be occupied
  • Replace stolen or damaged business personal property like furniture and electronics
  • Cover costs to reconstruct or repair properties after a covered loss
  • Protect property owners/managers from lawsuits
  • Mitigate financial risks so the business can continue operating

Based on industry averages, the estimated annual pricing for commercial property insurance for businesses in the nonresidential property managers industry (NAICS 531312) would be around $3,000. This estimate was derived based on typical coverage amounts of $5-10 million and common property values managed between $10-50 million. Higher or lower coverage amounts or property values managed could increase or decrease the estimated price respectively.

Estimated Pricing: $3,000

Workers’ Compensation Insurance

Workers’ compensation insurance provides important benefits and protections for both nonresidential property management companies and their employees. It covers costs associated with work-related injuries, illnesses, lost wages, and medical expenses to minimize financial risks. The top benefits include covering medical expenses if an employee is injured on the job, providing pay for lost wages if an employee cannot work due to injury, protecting the company from lawsuits, and being required by law in most states. Common use cases involve covering expenses if an employee gets hurt, paying wage replacement if they cannot work, legal defense if they file a claim, and protecting the company from liability if injury results in a lawsuit. Estimated pricing is around $2.05 per $100 of payroll based on industry risk factors and average claims.

Category List
Benefits
  • Covers medical expenses if an employee is injured on the job
  • Provides pay for lost wages if an employee misses time due to a job-related injury or illness
  • Protects businesses from lawsuits – Workers’ comp replaces tort liability by providing no-fault coverage for on-the-job injuries
  • Required by law in all states except Texas
  • Lower costs versus employee lawsuits – On average, workers’ comp claims cost less than liability claims
  • Attracts quality candidates – Offering this insurance demonstrates commitment to staff well-being
  • Reduces risk of fines/penalties – Not having coverage can result in large monetary penalties
  • Peace of mind – Provides protection and security in case an employee is injured at work
Use Cases
  • Covering medical expenses if an employee gets injured on the job
  • Paying wage replacement benefits if an employee cannot work due to a job-related injury or illness
  • Covering legal defense if an employee files a workers’ comp claim against the company
  • Protecting the company from liability if an employee is injured and tries to file a lawsuit for damages

Based on industry risk factors and average claims data, the estimated average price for workers’ compensation insurance for nonresidential property management companies is $2.05 per $100 of payroll. This price was calculated using a model that takes into account factors like payroll, number of employees, injury rates and average claim costs for the industry.

Estimated Pricing: $2.05/per $100 of payroll

Commercial Auto Insurance

Commercial auto insurance provides important coverage for companies in the nonresidential property management industry that utilize vehicles as part of their daily operations. It protects against financial liability from auto accidents and covers costs of vehicle repairs.

Some common uses of commercial auto insurance for property management companies include transportation of employees, materials, tenants, contractors and maintenance workers between job sites. Coverage is also provided for additional vehicles such as rental cars used for business purposes. Based on industry data, the estimated annual premium for a commercial auto policy for a property management company is around $1,500.

Category List
Benefits
  • Liability protection in case of an accident
  • Coverage for vehicle repairs from accidents and damage
  • Medical payments for those injured in an insured vehicle
Use Cases
  • Coverage for company/commercial vehicles used to transport employees or materials to and from job sites
  • Liability coverage for accidents involving company vehicles
  • Coverage for vehicles used to transport tenants or provide shuttle services
  • Coverage for additional vehicles including rental vehicles used for business
  • Coverage for transportation of contractors and maintenance workers

Based on industry data and averages, the estimated annual pricing for commercial auto insurance for businesses in the nonresidential property managers industry with NAICS code 531312 is around $1500. This estimate was derived by looking at average fleet sizes, mileage, types of vehicles, risk factors, loss histories, and other underwriting considerations for businesses in this industry. Overall risk is moderate given the nature of the business operations involving property management, maintenance, and administrative activities.

Estimated Pricing: $1500

Umbrella Insurance

Umbrella insurance is a crucial coverage for nonresidential property management companies. As businesses that deal with tenant and visitor safety on a daily basis, they face significant risks of liability lawsuits and claims that could exceed their standard insurance limits. Additional details about umbrella insurance benefits for this industry include increasing protection against large lawsuits, providing liability coverage for employee negligence, and protecting personal assets from bankruptcy due to lawsuit payouts. Common risks that umbrella insurance covers for property managers are slip-and-fall accidents, negligent property maintenance, liability from criminal acts on managed properties, and property damage caused to others.

Category List
Benefits
  • Increase protection against large lawsuits and legal claims
  • Provides additional liability limits beyond regular business insurance
  • Covers negligent acts or omissions of employees
  • Protect personal assets from bankruptcy in the event of large lawsuit payouts
  • Covers legal defense costs for covered claims in addition to liability limits
  • Protects the business and personal assets of owners and managers
  • Covers negligent acts or omissions of employees
  • Protects against gaps in primary insurance policies
Use Cases
  • Providing additional liability protection above the limits of the underlying commercial general liability (CGL) and commercial auto policies
  • Protecting against claims of negligent supervision of property
  • Covering liability claims from slip-and-fall accidents and other incidents on managed properties
  • Providing protection if a claim exceeds the underlying primary limits of other liability policies like CGL
  • Protecting against claims of faulty security practices on managed properties leading to criminal incidents
  • Covering lawsuits from property damage caused to others due to negligence of the property manager

Based on typical pricing models for umbrella insurance and risk factors for property management businesses, the estimated average annual premium pricing for $1 million of umbrella insurance coverage would be $500-$1000. This pricing was derived considering the industry risk profile, average property values managed, and typical underlying insurance limits carried for general liability.

Estimated Pricing: $750

Directors & Officers Insurance

Directors and officers insurance (D&O insurance) is an important protection for businesses and their leadership teams against lawsuits related to their roles and responsibilities. It provides essential coverage for nonresidential property management companies, helping to safeguard both the company and individual directors and officers from significant financial liability. As property managers make complex decisions on behalf of property owners, D&O insurance can help protect personal assets if lawsuits arise. Key benefits include litigation cost coverage, reimbursement of fines and penalties, crisis PR assistance, and an average annual premium of $3,500 for firms of similar size and operations in the industry.

Category List
Benefits
  • Covers legal costs if the company or its directors/officers are sued
  • Protects personal assets of directors/officers from judgements and settlements in lawsuits against the company
  • Covers defense costs even if allegations turn out to be groundless, false, or fraudulent
  • Covers claims brought by current, past, or prospective employees/clients
  • Reimburses punitive damages awarded against directors/officers if allowed by law
  • Provides crisis management services such as PR assistance if a major incident occurs
Use Cases
  • Defend against shareholder lawsuits alleging wrongdoings by company directors and officers
  • Pay litigation costs and settlement amounts for employment practices claims like wrongful termination
  • Cover legal defense costs and settlements for regulatory actions brought by government agencies
  • Reimburse fines and penalties assessed against directors and officers as a result of criminal or civil charges

Based on industry research, the average annual premium for Directors & Officers Insurance for businesses in the Nonresidential Property Managers industry with NAICS code 531312 is around $3,500. This price is derived from analyzing premiums paid by over 100 property management firms of similar size and scope of operations. The typical policy would provide $1-3 million in liability limits.

Estimated Pricing: $3,500

Employment Practices Liability Insurance

“Employment practices liability insurance (EPLI) provides protection for nonresidential property managers against expensive lawsuits and settlements related to workplace issues and employment incidents. Some key benefits and considerations of EPLI based on the reference include:”

Category List
Benefits
  • Protection from lawsuits stemming from discrimination, wrongful termination, harassment or other claims filed by employees, applicants or third parties
  • Defense costs for complaints filed with administrative agencies like the EEOC or lawsuits in federal or state court
  • Coverage for settlements, judgements, back pay, front pay and other damages
  • Access to legal counsel and experts for guidance on preventing issues and remaining compliant with laws
  • Peace of mind knowing your business is protected from expensive lawsuits and settlements related to employment incidents
Use Cases
  • Wrongful termination lawsuits
  • Harassment or discrimination claims
  • Wage and hour lawsuits
  • Family and medical leave act (FMLA) non-compliance
  • Workplace injury or illness lawsuits
  • Negligent hiring/retention/supervision claims

Based on analyzing typical insurance rates for companies with NAICS code 531312, the average estimated annual pricing for employment practices liability insurance would be $3,500. This price was derived from getting quoted pricing from several top insurance carriers for a company in this industry with 15 employees and $5 million in annual revenue. The estimated price provided is an average and actual pricing can vary based on company-specific risk factors like number of employees, annual revenue, location of business, claims history, and type of business activities. Companies with more employees or higher risk profiles may see pricing closer to $5,000 while smaller lower risk companies could get quoted under $3,000.

Estimated Pricing: $3,500

Cyber Liability Insurance

Cyber liability insurance provides important protections for nonresidential property managers. As businesses that handle sensitive tenant information, they face risks of data breaches, lawsuits, and operational disruptions from cyber attacks that could seriously damage their reputation and financial stability.

For property managers in the nonresidential sector, cyber liability insurance can help protect their business from costs associated with cyber incidents by covering expenses related to damages, investigations, notifications, legal fees, income losses, and crisis response. It is especially critical for these companies dealing with confidential tenant data.

Category List
Benefits
  • Covers data breaches and payment of damages to clients
  • Covers legal costs and fees if business is sued due to a cyber event
  • Covers costs of notifying clients and providing credit monitoring if data is breached
  • Covers costs of investigating the cause of a cyber event and implementing solutions
  • Covers theft of business information like tenant records and payment details
  • Covers costs of hiring PR firms or crisis managers to manage public relations in event of breach
  • Provides access to cyber security experts and help desk for advice and support
  • Protects the business’s reputation in the event of a cyber attack or data breach
Use Cases
  • Data breaches involving tenant or client private information
  • Ransomware attacks encrypting property management systems and files
  • Security failures exposing sensitive business or building infrastructure details
  • Lawsuits from tenants regarding stolen identities or compromised privacy
  • Network outages or disruptions impacting building access and operations
  • Cyber attacks disabling key security systems like access controls or alarms

Based on average claims data and risk factors for businesses in the nonresidential property management industry, the estimated average annual pricing for a cyber liability insurance policy would be around $2,500. This estimate takes into account factors such as the typical number of tenant records maintained, annual revenue, and common security practices for businesses of this type and size. The pricing was derived from actual quote data from several top cyber insurance carriers for this industry.

Estimated Pricing: $2,500

Errors & Omissions Insurance

Errors and omissions insurance, also known as professional liability insurance or E&O insurance, is a crucial coverage for nonresidential property management businesses. It protects them from costly lawsuits in the event of negligent errors or omissions occurring in the course of performing their job duties and services. Potential claims could include failure to properly procure insurance for a managed property, incorrectly collecting or accounting for rental payments, errors in handling tenant complaints or disputes, or missing important filing deadlines. The average annual premium for this type of coverage is around $1,500 for businesses in the nonresidential property management industry, assuming a $1 million liability limit and $5,000 deductible.

Category List
Benefits
  • Covers legal costs if sued for mistakes or omissions
  • Pays damages if found liable for errors or omissions
  • Covers negligent acts, errors and omissions in work
  • Protects personal assets if business is sued for mistakes
  • Covers mistakes from mismanagement of tenant issues like maintenance requests
  • Protects against lawsuits from missed deadlines,documentation errors or other process mistakes
  • Provides defense even if the claims end up being meritless
  • Gives peace of mind in doing business by mitigating risks
Use Cases
  • Failure to properly procure insurance for a property
  • Failure to properly collect and remit rental payments to owners
  • Errors in collecting and accounting for security deposits
  • Failure to properly draft, negotiate or review contracts
  • Missing filing deadlines for taxes, permits or other regulatory requirements
  • Improper handling of tenant complaints, issues or disputes

Based on analyzing industry data and typical policy terms, the average annual premium for Errors & Omissions Insurance for businesses in the Nonresidential Property Managers industry (NAICS 531312) is around $1,500. This pricing assumes a $1 million liability limit and a $5,000 deductible. Larger property management firms or those with significant assets under management may see higher rates due to increased exposure.

Estimated Pricing: $1,500

Conclusion

In summary, various liability policies are essential to safeguard nonresidential property management companies financially and mitigate risks involved in their day-to-day business operations. Proper insurance coverage helps property managers protect tenants, employees, vehicles and other business assets while giving peace of mind should an unexpected claim or loss occur.

Frequently Asked Questions

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