Currently, to become a property manager, we do not need to have any specific education or have specific certificates (although these, of course, may be desired by a potential client and contribute to increasing our prestige). If we want to deal with real estate management in Warsaw or anywhere else, we must be aware of the insurance obligation imposed on us by the legislator. In today’s text, we describe what the obligatory third-party liability insurance is for property managers. We will also indicate exceptions to which this insurance does not extend, and we will provide voluntary examples of policies that may also be useful to us while practicing our profession.
Third party liability insurance, i.e. a few words about third party liability for property managers
The obligation to have this insurance is precisely specified in the Act, namely the Act of August 21, 1997 on real estate management. According to its content, the obligation to have third party liability insurance arises no later than on the day on which we start working as a property manager. Such third party liability insurance protects us against civil liability for damages that occurred as a result of actions or as a result of failure to act in connection with property management. The minimum guarantee amount is determined by the ordinance of the Minister of Finance and currently amounts to EUR 50,000.
In addition, it is worth remembering that if, as an administrator, we employ our employees, our third party liability insurance also extends to our possible liability for damages that they caused while working. It does not matter whether these people are employed under a mandate contract or a contract of employment.
Exceptions that are not covered by third party liability insurance
Regardless of whether our job is to manage real estate in Warsaw or to provide other types of services, we are often forced to take out an insurance policy. It is worth referring to the act each time, because it defines not only the situations in which we are protected, but also those in which the responsibility will fall on us. In the case of third party liability insurance of the property manager, the following exceptions can be distinguished:
- damage caused by riots, riots, war and terrorist attacks;
- damages consisting in the payment of contractual penalties;
- damage consisting in the loss of things, destruction or damage caused to someone from the following group of people:
- spouse, siblings, ascendants, descendants, persons with whom the insured person stays together.
Why is it worth taking care of third party liability insurance?
First of all, we must be aware that by purchasing the policy, we fulfill the statutory obligation. When deciding to purchase liability insurance for real estate managers, we also decide about the legality of our business. The second important consideration is reduced risk. During work, many unexpected situations can happen that may burden us financially to a large extent. It is not uncommon to hear about bankruptcy due to excessive fines due to damages resulting from professional activities. Having such a policy, we also increase our credibility in the eyes of potential partners and clients. An additional advantage of the solution is the fact that the third party liability insurance premium for property managers can be paid in installments or once.
Property management Warsaw – is the third party liability insurance alone enough?
As mentioned above, third party liability insurance is a necessary policy because the necessity to have it has been described in the act. In addition to it, however, we have the option of choosing additional security. It does not matter whether we work in a smaller city or specialize in real estate management in Warsaw – operating in this industry, despite having a third party liability insurance, can be risky. This is due to the fact that not every loss resulting from the performance of the property manager is considered under the third party liability insurance policy. If we want increased protection, we can choose from many available options. One of them is professional liability insurance. This solution is chosen when we apply for a policy with an insurance company with a higher sum than the minimum amount,specified in the regulation of the Minister of Finance. As part of additional, voluntary insurance, we can choose, for example, insurance against loss of profit, property insurance against theft, vandalism, robbery, fire and other random events, etc.
In order to fully secure our real estate management activities in Warsaw or another city, we should not only meet the statutory requirements, but also consider additional insurance related to the property under management. The current insurance offers are so diverse that a quick overview is enough to find policies that have not undermined our budget too much and at the same time will allow us to stand calmly.