At first, the maintenance employee replaces filters and adjusts doors. A year later, the same person installs appliances, patches roof leaks and handles larger repairs between tenants.
The owner still calls the department "basic maintenance." The insurer's application still describes an office-based property management firm.
Property management maintenance insurance should reflect the work people actually perform. Adding a repair crew can change liability, payroll, vehicle and equipment exposures even when the company has not added another managed property.
Table of Contents
Quick Answer: What Insurance Should Property Management Companies Review for In-House Repairs?
In-house repairs should be disclosed before the work expands. Review general liability (GL) for the accepted maintenance operations, errors and omissions (E&O) for management services, workers' compensation for employees, and vehicle and equipment coverage as needed. Repair work may require different underwriting or separate contractor coverage. Licensing, permits and worker qualifications are separate obligations; calling a task maintenance does not settle either compliance or insurance.
Describe the Repair Work Precisely
An insurer needs more detail than "maintenance." Describe the tasks, where they occur, who performs them and whether work is limited to the managed portfolio or sold to other customers.
Changing light bulbs is different from electrical installation. Replacing a fixture is different from altering a plumbing system. Roof work, structural repairs, excavation and major remodeling should not be hidden inside a broad administrative description.
Include frequency, revenue, payroll and subcontracted portions of the work. If employees sometimes help a specialist contractor, explain that arrangement too.
Obtain appropriate legal and trade guidance on licensing and permits. For employee safety, OSHA's electrical training standard illustrates why worker qualification matters for particular tasks. Insurance acceptance is not permission to perform work an employee is unqualified or unauthorized to undertake.
Maintenance Exposures at a Glance
Activity | Insurance detail to review |
|---|---|
Work inside occupied units | Accepted operations and third-party injury or damage |
Repairs completed before move-in | Completed operations provisions and exclusions |
Employee uses ladders or power tools | Workers' comp duties and safety practices |
Crew travels between properties | Commercial auto or hired and non-owned auto arrangements |
Tools kept in a van | Equipment coverage, theft conditions and values |
Major project supervised by manager | E&O service scope and contractor responsibilities |
The right arrangement depends on the scope. The table is not a recommendation to perform every listed activity in-house.
Separate Repair Work From Management Oversight
One allegation says an employee installed a connection incorrectly. Another says the manager hired an unsuitable plumber or failed to follow an owner's instructions. Those allegations concern different conduct.
GL may address covered injury or property damage arising from accepted operations, subject to exclusions. E&O may address covered errors in professional management services, but it should not be assumed to insure physical contracting work.
StarNet's general liability versus professional liability guide explains the general categories. For in-house repairs, compare the operations described in GL underwriting with the services defined under E&O.
If an owner asks the manager to act as a general contractor for a renovation, discuss the proposed role before agreeing. Project coordination, construction management and physical trade work may require different arrangements and separate qualifications.
Review Faulty Work and Resulting Damage
An appliance installation fails. The owner wants the connection redone and compensation for water damage to surrounding property. The cost of correcting the work and the alleged resulting damage should be considered separately.
Liability insurance is not a warranty that every repair will be performed correctly. Exclusions concerning the insured's work, property being worked on or other damage can affect response. Timing matters as well: a problem discovered during work can raise different provisions from damage occurring afterward.
Ask the broker to review a realistic example using the actual policy. Avoid accepting a general statement that completed operations covers anything found after the crew leaves.
Travelers' discussion of construction defects emphasizes the importance of records and advice on the work performed. Keep scopes, photographs and completion documentation so the facts can be established if a repair is questioned.
Update Employee and Vehicle Information
Office employees may begin helping with unit turns, or a dedicated crew may join the company. Workers' compensation underwriting and payroll records should reflect actual duties and the applicable classification approach.
Do not decide that a title such as "property assistant" makes physical repair duties clerical. Explain mixed duties to the insurer. State rules and rating requirements differ, so obtain guidance before allocating payroll between classifications.
Vehicle use also changes. A company van carrying tools generally needs an appropriate commercial auto review. Personal cars used for supply runs or travel between properties can create non-owned auto exposure.
Auto liability does not necessarily insure the tools or materials inside the vehicle. Discuss those items separately, including where they are stored overnight and who owns them.
Identify Tools Materials and Separate Entities
Make a list of owned tools, rented equipment and materials awaiting installation. Property coverage centered on an office may not provide the intended protection while equipment travels or is left at a job location.
Review values, covered locations, theft conditions and any applicable equipment or inland marine coverage. If employees bring their own tools, determine what the company has agreed to insure rather than assuming ownership does not matter.
A separate maintenance LLC needs its own entity review. Shared staff and branding do not automatically make it insured under the management company's policies. Check agreements between the entities and who invoices the property owner.
If work is subcontracted, review the contractor's scope and insurance. StarNet's HOA vendor insurance requirements guide explains how to review certificates and request evidence of additional insured status when required by contract.
Set Approval Limits Before Accepting New Work
A manager needs a practical method for identifying tasks outside the insured or authorized scope. Staff should know when a request requires a licensed specialist, owner approval or a new insurance review.
Before expanding the service, prepare:
a task list and explicit limits on work accepted
employee qualifications, supervision and payroll details
tools, vehicles and storage arrangements
subcontractor agreements and insurance documentation
new revenue and contracts for services outside the portfolio
proposed changes to insured entities and operations
Check how work orders are approved and closed. The file should show the reported problem, authorized repair, person performing the work and completion record. If a condition remains unresolved, record the escalation rather than marking the job finished to clear the queue.
Tell the insurer about material changes as they arise. Waiting until renewal can leave the company performing work that was never reviewed. StarNet's insurance shopping checklist can help compare proposed terms once the expanded operation is accurately described.
A new repair service should have a clear acceptance process. If a resident asks the maintenance employee to perform extra work privately, the company needs to know whether the task falls within employment, the owner's approved scope or a separate arrangement. Staff should not assume the employer's insurance follows any side job performed at a managed property.
Record who supplied materials and who approved substitutions. An owner may choose a component that differs from the original work order, and the later claim file should show that decision accurately. Where a request exceeds the crew's qualifications or accepted operations, refer it for appropriate review and qualified assistance. Insurance discussion should support a defined service, rather than being used afterward to justify work the company had not assessed.
Frequently Asked Questions
Does Property Manager E&O Cover In-House Repair Work?
Not automatically. E&O service definitions and exclusions vary. Physical repair operations need their own liability and underwriting review.
Does GL Pay to Redo a Poor Repair?
Do not assume so. Correcting faulty work and liability for resulting damage can receive different treatment under the policy.
Should Maintenance Payroll Be Reported Separately?
Describe the actual duties and follow the insurer's applicable classification instructions. Separate allocation is not automatically allowed merely because the company uses different job titles.
Are Tools Covered by the Van's Auto Liability Policy?
Auto liability serves a different purpose. Tools and materials may need separate property or equipment protection, including coverage away from the office.
Contact StarNet Insurance Group
StarNet Insurance Group can help property management companies review insurance before expanding in-house maintenance. Bring the task list, employee duties, vehicles and service agreements.
Contact StarNet Insurance Group to review property management maintenance insurance when repairs become a larger part of the business.
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