Why does your PM want to be added to your insurance?

Suppose you use a property manager to manage your properties. In that case, there is a high likelihood that they have asked you to add them to the property's insurance policy as additional insured. Either that or the property manager likely charges you a fee for their added insurance cost for the property.

The property management company will ask you to add them as "additional named insured." This typically comes at no additional cost to you, the policyholder.

Why would your property manager ask to be added to your policy, you may ask?

When a property manager is hired, they take on almost all responsibilities as if they were the owner. As such, if something were to go wrong, such as personal injury, the property manager is often the target, in place of the owner, of any resulting litigation. That is it. That is why they ask to be added as an additional named insured.

Note that insurers can also add third parties to a policy as "additional named interest". That is vastly different from "additional named insured"! "Additional named interest" does not extend insurance coverage to that individual or entity but will simply notify them of any changes or cancellations to the insurance policy. 

It is also worth noting that adding someone as "additional named insured" does not give them any financial interest in the property.

Hopefully, this helps clarify this topic that has come up as a relatively frequent question.