Property preservation (or mortgage field services) companies help banks, governments, and asset management organizations maintain their vacant properties.
Property preservation companies have the typical building maintenance liabilities, as well as additional liabilities for the inspection and professional services they provide to their clients.
Property Preservation Insurance – What’s Needed?
The type of mortgage field services or property preservation insurance your company needs ultimately depends on the assets you have and institutions you typically work for.
For example, if you own a work truck, you need a commercial auto policy; but you could also need a commercial auto policy if the organization you are working for requires you to have one.
While this isn’t a comprehensive list of every coverage for this industry, here are the typical property preservation business insurance requirements:
General liability coverage will almost always be requested by any organization you are working for. This is the most basic and common form of insurance. General liability insurance covers a large portion of the liabilities arising from your construction work.
This policy provides coverage for bodily injury and property damage that you cause to people or property not owned or employed by you. It also covers the liability arising from your work after the job is complete.
For example, if you made a faulty repair to a building that resulted in large amounts of water damage, your general liability policy would pay for the damages and your legal defense costs (up to the insurance limit). Coverage would apply whether you had completed the job or were currently working on the job when the incident happened.
Errors and omissions (E&O) insurance is a bit more specific to property preservation companies. Whereas general liability focuses on damages you directly cause others, an E&O policy covers professional errors that result in damages to your clients.
Since property preservation companies inspect and provide professional services (such as yard maintenance and building repairs), they need this coverage in the event that something was overlooked or an error was made in the process of rendering those services.
Workers’ compensation is an insurance coverage required by your state government if you have any employees.
This policy covers medical bills and lost wages for employees who are injured while working for your company.
That being said, if you are contracting for large organizations, they might require you to have workers’ compensation insurance regardless if you have employees or not.
There are a couple of reasons for this requirement:
1. If the organization that hires you does not collect a certificate of workers’ compensation insurance, your total compensation will be added to the payroll of their own workers’ compensation policy. This results in additional premium money due on the organization’s insurance audit.
2. In many states, the "prime contractor" is responsible for paying the workers’ compensation claim if someone is injured on the job. The prime contractor is defined as the firm responsible for the entire project. Since the organization hiring you doesn't want to be responsible for claims you or any subcontractor cause, it’s often easier to require you to have workers’ compensation coverage with no exceptions (even if you have no employees).
Property Preservation Insurance Costs
Like any policy, property preservation insurance quotes depend on the type of work you are doing and the size of your company. For example, a one-person property preservation company will not pay the same as another company with 1000 employees.
That being said, the rates for a property preservation general liability and E&O insurance start around $1000-1500 annually. Additionally, you can get workers’ compensation for an additional $400, depending on the state you are in.
Property preservation companies are unique and require a different insurance program than traditional contractors. If you need help understanding insurance requirements to win a client or want to build your custom insurance program, let us know.