Owning rental property can be one of the best investments you make, but it also carries serious responsibilities. Protecting your property means more than keeping up with maintenance and finding good tenants. It also means making sure you have the right insurance in place. Landlord liability insurance is not just a formality. It is a safeguard against the financial risks that come with renting out property.

In this article, we will explain why landlord liability insurance is so important, why property managers often require being listed as additional insured, and how the right coverage keeps both you and your investment secure.

What Is Landlord Liability Insurance?

Landlord liability insurance protects property owners from financial losses if someone is injured on their property or if the landlord is found responsible for damage to someone else’s belongings.

Consider these real scenarios:

A tenant slips on a wet stairwell and needs medical attention.
A guest or contractor is injured while visiting the property.
A neighbor’s property is damaged and you are held responsible.

Without coverage, even a minor claim could leave you facing lawsuits, medical bills, and settlement costs that quickly add up. Many cases can easily exceed $300,000 to $500,000.

This is why property managers recommend carrying a minimum of $1 million in liability coverage. That number may sound high, but it reflects today’s legal fees, medical expenses, and settlement amounts. In reality, a million dollars is a reasonable baseline to protect your investment.

If you are new to owning rental property, make sure to review the first steps as a new landlord so you can set your foundation properly.

Why Property Managers Must Be Listed as Additional Insured

Most professional management companies, including Los Angeles Property Management Group, require landlords to list them as additional insured on liability policies. This is not an unnecessary extra. It is an essential step in protecting both parties.

Property managers act on your behalf in almost every part of the rental process: leasing, maintenance, compliance, and communication. If a lawsuit is filed, it is common for both the owner and the property manager to be named, even if the manager did not directly cause the issue.

By listing your property manager as additional insured, you extend the same liability protection you already have to them when they are performing duties for you. This ensures that legal defense is consistent and coordinated, and it helps reduce conflicts or confusion during a claim.

For more guidance, see our blog on tips for every landlord, which highlights additional steps that protect both you and your tenants.

Does This Affect Your Coverage?

No. Adding a management company as additional insured does not reduce your coverage or limit your protection. It simply extends the same benefits to your manager while they act on your behalf. In most cases, this addition does not increase your premium.

The reasoning is straightforward. Property managers oversee and protect your assets, but they do not own them. Owners typically receive around 95 percent of rental revenue, while managers earn about 5 percent. It would not make sense for managers to take on full liability for something that benefits property owners far more directly.

By including your manager under your policy, you ensure that responsibilities are aligned fairly while keeping everyone protected.

Want to know more about common coverage questions?

Additional Insured vs. Additional Interest

It is easy to confuse these two terms, but they mean very different things:

Additional Interest: The property manager receives policy updates, notices, or renewals, but this does not give them liability protection.
Additional Insured: The property manager is fully protected under the liability policy if a claim is filed.

Some insurance policies automatically include property managers in liability coverage, but you should never assume. Always confirm that your documentation specifically states “additional insured.” If it only says “interested party,” your manager is not covered.

Benefits of Listing a Manager as Additional Insured

When your manager is properly listed, both you and your property manager benefit:

Stronger legal defense: One coordinated legal strategy instead of separate approaches.
Clearer responsibilities: Everyone knows who is covered and when.
Streamlined claims: Fewer delays and less confusion if a lawsuit arises.

At the end of the day, it is about protecting your property, your investment, and the professionals who help manage it, while also applying smart property management tips to strengthen your approach as an owner.

Steps to Take

If you are not sure whether your current policy is set up correctly, here are a few actions to take right away:

Review your policy: Check your liability limits and confirm whether your property manager is listed as additional insured.
Contact your insurance agent: Ask them to clarify any unclear language and request sample wording if necessary.
Confirm adequate coverage: Make sure your liability limit is at least $1 million, and consider more for larger properties or higher-risk areas.
Coordinate with your property manager: Let them know you are reviewing your policy. They may have sample language you can send directly to your agent.

Final Thoughts

Real estate is a strong investment, but it comes with risk. Landlord liability insurance protects you against the financial fallout from unexpected accidents or claims. Extending coverage to your property manager by listing them as additional insured ensures that both parties are protected and that claims are handled smoothly.

If you are unsure whether your current policy meets these standards, now is the time to act. Reach out to your insurance provider for confirmation or ask Los Angeles Property Management Group for guidance. Taking these steps today will give you peace of mind and safeguard your property for the future.