There have been questions asking if others of us require renter's insurance.

It is "best practice" to require renter's insurance from your residents.

It is also "best practice" to require to be listed as "additional insured" on that policy. There have been members who say that is not necessary. I believe they are wrong.

Here is a post from another forum and I asked the poster if I could repost and was given permission. This is real life not armchair quarterbacking from the peanut gallery. I X'ed out his property management company for privacy.

So look at your lease and make some changes.

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Thought NARPM would be interested in this ongoing insurance issue:

Our PMA requires owners to defend and indemnify our management company for most claims, except those arising from our gross negligence.

A tenant sued both the owner and XYZ management after allegedly suffering a personal injury when a tree fell in the backyard

XYZ was not named as an additional insured on the owner's liability policy (not best practice I know..)

I reported the claim immediately to our general liability carrier.

At the same time, I contacted the owner's carrier and asked it to provide a defense to XYZ in this matter.

The owner's carrier denied coverage on the basis that XYZ was not listed as an additional insured. I then asked our carrier to file a crossclaim against the owner for breach of the PMA's defense and indemnification obligations. The owner's carrier contacted me today and advised that it will defend XYZ if we dismiss the crossclaim.

I know it is best practice to be listed as an additional insured, but I think we handled this as well as we could by enforcing the contractual defense and indemnification obligations early. That limits XYZ 's $$ exposure under our GL policy and puts us in a stronger position with our carrier.

Hopefully this helps someone else down the road.

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Read this twice. Don't be complacent.

I posed the following question to Google AI

When a tenant has renters insurance what provides a landlord best liability protection and what would be proper wording on the tenant's policy. Should a landlord be listed as "additional insured" or "interested party"

This is the answer it spit out:

For a landlord, being listed as an Interested Party (also known as "Additional Interest") generally provides the most practical protection for a residential rental. While the terms are often used interchangeably by landlords, they serve very different legal and operational purposes.

1. Choosing the Right Status

Interested Party (Recommended): This status provides the landlord with notifications only. They are alerted if the policy is canceled, lapses, or if coverage limits are changed. It confirms the tenant is maintaining the insurance required by the lease without giving the landlord any ownership rights over the policy.

Additional Insured (Generally Discouraged): This status extends actual liability coverage to the landlord. While this sounds better, many insurers refuse to add landlords as "additional insured" on standard HO-4 renters policies.

The Risk: If a landlord is an "insured" on the tenant's policy, they may be barred from collecting against that policy for damages the tenant causes to the building (due to "cross-suits" exclusions that prevent one insured party from suing another under the same policy).

+10

2. Proper Wording for the Tenant’s Policy

The policy should explicitly name the landlord or property management company as an "Interested Party" or "Additional Interest."

Wording Example: "Landlord [Name] shall be listed as an Additional Interest on the Tenant’s renters insurance policy for the duration of the lease."

Details to Include: Ensure the tenant provides the insurer with the landlord's correct mailing address or email so they actually receive the automated notifications of policy changes.

Policy---genius

+1

3. Necessary Lease Language

To ensure the best liability protection, the lease agreement should include specific requirements for the tenant's policy:

Minimum Liability Limit: Most professional landlords require a minimum of $100,000 in personal liability coverage.

Indemnification Clause: The lease should state that the tenant agrees to indemnify and hold the landlord harmless from any claims or damages resulting from the tenant's use of the property.

Proof of Insurance: Require the tenant to provide a Certificate of Insurance (COI) before move-in and upon every annual renewal.

Goodcover

Goodcover

There are some insurance companies that push back on additional insured.

Foremost insurance will do additional insured because that is how my own rentals are set up with the property management company as "additional insured"

I am giving you a real world, not hypothetical, situation. You make the best decision you can with the information you have. Each of my leases has the wording that the tenant is responsible for getting renter's insurance and naming the property management company as "additional insured".

b. Whether or not Tenant is required to obtain a renter's insurance policy, Tenant shall be solely responsible for insuring any of his personal property located or stored upon the Premises upon the risks of damage, destruction, or loss resulting from theft, fire, storm and all other hazards and casualties. Regardless of whether the Tenant secures such insurance, the Landlord and his agents shall not be liable for any damage to, or destruction or loss of, any of the Tenant's personal property located or stored upon the Premises regardless of the cause or causes of such damage, destruction, or loss, unless such loss or destruction is attributable to the intentional acts or willful or wanton negligence of the Landlord.

c. The Tenant agrees to release and indemnity the Landlord and his agents from and against liability for injury to the person of the Tenant or to any members of his household resulting from any cause whatsoever except only such personal injury caused by the negligent, or intentional acts of the Landlord or his agents.