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Property preservation businesses perform a variety of tasks to keep vacant or foreclosed properties in good condition, including maintenance, cleaning, repairs, and inspections. These services can lead to a number of risks, such as accidental injuries, property damaged by your business, or lawsuits alleging that you made mistakes in your work. Having the right business insurance coverage in place can give your company the financial security it needs to continue operating in the event of a disaster or lawsuit.
What insurance coverage do I need as a property preservation business?
There are many types of insurance coverage to consider, but these policies are particularly relevant for property preservation businesses:
General Liability Insurance
General liability insurance covers a number of common risks, including third-party bodily injury, personal injury, and property damage. Property preservation contractors perform work at a variety of locations and could be held liable for any damage that occurs to someone else’s property. There’s also a possibility that someone could be injured as a result of your activities or suffer an injury on your business property.
If you are sued due to an accident, general liability insurance will provide coverage for the lawsuit, as well as any medical payments for injured individuals. This type of insurance also covers unintentional non-physical injuries to third parties, including libel, slander, copyright infringement, and more.
A critical part of general liability insurance for property preservation businesses is products and completed operations coverage. This covers property damage or injuries that take place away from your business’s premises and are caused by your work after it has been completed. If you complete repairs or other work that later injures someone or causes property damage, this aspect of general liability insurance would provide coverage.
- Bodily injury: A client visits a property where repairs are in progress and trips over a paint can, which causes him to fall and break his wrist. General liability insurance would cover medical costs as well as legal fees if the client sues.
- Property damage: A ladder placed by one of your employees falls and hits a neighboring house, breaking a window. Your general liability insurance would pay for a replacement.
- Product and completed operations: While winterizing a foreclosed home, one of your property preservation specialists fails to turn the water off completely at the source. Several pipes freeze and burst. General liability insurance would cover the claim.
Errors and Omissions Insurance
Errors and omissions insurance (also known as professional liability insurance) provides coverage if you are sued due to negligence, mistakes, or omissions in your professional work. For property preservation businesses, this could include claims that you failed to notice issues during inspections or failed to prevent property damage, leading to financial losses for the owner of the property.
- One of your employees inspected a property but failed to notice signs of black mold in the basement. The owner of the property finds that it cannot be sold until extensive work is done and sue your business for negligence. Errors and omissions insurance would cover the lawsuit.
Workers’ Compensation Insurance
Property preservation professionals often work at unfamiliar properties and perform cleaning, repair, maintenance, and junk removal services—all physically demanding activities that could lead to injury. If your employees are injured or fall ill as a result of their work, workers’ compensation insurance will provide funds to cover employees’ medical expenses and lost income. Workers’ comp insurance can also provide benefits to surviving dependents if an employee dies.
In almost every state, workers’ compensation is required for companies who employ others. Each state has different requirements and policies regarding what types of companies need to provide workers’ comp, the level of benefits, and qualifying injuries. It’s important to check your state guidelines, as non-compliance could result in heavy fines or penalties.
- While performing some maintenance work at a foreclosed property, your employee trips on a loose stair and falls, breaking her elbow. Your workers’ compensation insurance would pay for the employee’s medical expenses and a portion of lost income while she is recovering.
Commercial Auto Insurance
If your company owns or leases vehicles, you’ll need to obtain commercial auto insurance. Commercial auto insurance is a critical coverage that will pay for damages if you or your employees are at fault in a collision while driving a company vehicle. It will cover medical costs if the other vehicle’s occupants are injured as well as paying for damages to the other vehicle. Commercial auto insurance also covers your vehicles if they are physically damaged or lost due to theft, vandalism, collisions, or other hazards.
If your employees drive their personal vehicles for work purposes, you will likely need hired and non-owned auto insurance, which can be purchased as an endorsement on a commercial auto policy or obtained separately. If your employee causes an accident while driving for work purposes, personal auto insurance may not be sufficient to cover the claim, and your company could be held liable. Hired and non-owned auto coverage can step in to provide coverage in these situations.
- While doing a drive-by to check if the occupants have moved out of a foreclosed property, one of your employees misses a stop sign and hits another car. Your commercial auto insurance would cover damages to both vehicles.
Commercial Property Insurance
Commercial property insurance provides protection for your business property, including buildings, furniture, equipment, and tools. Commercial property insurance will provide funds to replace or repair your business property if it is destroyed or damaged by a covered peril such as fire, explosion, storm, vandalism, and more.
Commercial property insurance covers the following:
- Buildings belonging to or leased by your company
- Contents of the building, including furniture, equipment, and tools
- Property of others while it is under your care, custody, or control
- A severe storm causes a tree to fall on the roof of your office building, damaging the roof and causing water damage to computers in the office. Your commercial property insurance would pay for repairs to the roof and replacement computers.
- A business owner’s policy may be a great choice for small or midsize businesses. It combines general liability, property, business income, and extra expense coverage into a single package, which is often cheaper than purchasing similar coverage separately.
- Business income coverage will reimburse you for lost income and operating expenses if your business is forced to cease operations due to a covered peril, such as fire, storm damage, or other property damage.
- Inland marine insurance provides financial protection for your business’s property that does not remain at a fixed location and is not covered by a standard commercial property policy. You may need this coverage to protect high-value, specialized equipment or tools.
Pricing and Quotes
Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:
- Business size
- Number of employees
- Claims history
Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a property preservation business with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.
In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for property preservation businesses:
|Provider||General Liability||Professional Liability||Business Owner's Policy|
There are many risks that could harm your property preservation company, from accidental property damage or physical injury to lawsuits claiming that you made professional errors. While you likely work as carefully as possible, it’s important to be prepared for every eventuality. Business insurance can help your company cope with unexpected disasters, providing financial support to enable your business to continue operating even after a costly disaster or lawsuit.