The Risk Adverse Property Management Firm

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The Risk Adverse Property Management Firm

• Understanding the risks to your business and
  methods to manage those risks.

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About

• Cary Smith, CIC- President
• Treaty Oak Insurance Partners
• Based In San Antonio
• Former Insurance Company Employee
• Hartford, CIGNA, SAFECO
• Exclusively work with NARPM members

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• A Few Observations
• As the frequency of risk increases, premiums
  increase.
• As the severity of risk increases, premium
  increase.
• As the frequency and/or severity of risk
  increases the number of available insurance
  companies interested in providing product
  decreases.
• Underwriters do not like insuring businesses that
  lack processes, controls, and management
  oversight.

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• Methods to identify risk
• For the most part, these methods consist of the
  following elements performed in this order.
• Identify Risks to Your Business
• Characterize Likelihood and Consequences of
  Threats
• Prioritize Identified Risks- Quantify
• Identify Methods to Reduce Risks
• Assign a number 1-5
• Cost of Risk Likelihood Severity Risk Level

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• Methods to manage risk
• Once risks have been identified and assessed, we
  manage the risks using four techniques
• Avoidance
• Reduction
• Sharing or Transfer
• Retention

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Insurance as a Risk Management Tool- Transfer

• Transfer risk in exchange for a premium.
• Deductible is the risk you accept.
• Self Insure is 100 acceptance of risk.
• You can reduce reliance on insurance through
  sound business practices and proper controls.
• You can reduce premiums as well!

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Risks To Your Business

• In the eyes of an insurance company, you are a
  general contractor you face risk from third party
  liability.
• You also face risks from your business
  activities.
• Employment
• Auto
• Professional
• Fiduciary

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Threat Assessment for Property Managers

Property Management Firm
Employees Practices Regulation Education
Contractors
Tenants
Owners
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Threat Assessment for Physician

Medical Office
Employees Practices Regulation Education
Customers Professional Liability
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Self Diagnostic

• Owners
• Do you use an association approved management
  contract?
• Do you enforce the contracts requirements for
  insurance?
• Do you conduct an annual audit to ensure
  compliance?
• Do you monitor and respond when the owners
  policy cancels/changes?

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Self Diagnostic

• Contractors
• Do you require all contractors to have insurance?
• Do you receive evidence of insurance from your
  contractors prior to payment?
• Do you require contractors to list you as an
  additional insured?
• Do you require a waiver of subrogation in your
  favor?
• Is the contractor accredited/licensed?
• Are they members of their trade association?

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Self Diagnostic

• Your business
• Do you background check all employees prior to
  hiring?
• Do you use an employee handbook that details the
  rules?
• Do you conduct performance management reviews?
• Do you have controls in place for AR, AP?
• Are your people trained on enforcing contract
  requirements?
• Do you have a procedure for employees using their
  vehicles while on business?

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Self Diagnostic

• Tenants
• Do you background check all prospective tenants?
• Do you have a signed lease agreement?
• Do you require tenants insurance?

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Lets Talk
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Contact