Ensuring proper coverage on multifamily properties has taken on new meaning in the last decade, just as it has everywhere else. The days of management companies viewing insurance protection with a check-box mentality are waning because more sophisticated coverages are necessary to provide a large enough shield to protect properties throughout the nuances of day-to-day operations.
Today, risk managers must think beyond a general liability policy or umbrella coverage when vendors come onto the property to perform the multitude of tasks that keep properties running. Basic coverage once considered adequate typically doesn’t cover the unique exposures that come from working with service providers.
For instance, when a towing company rolls out of the parking lot with an unauthorized vehicle, the risk to the property follows. The service may have a policy that covers general liability on the property but it may not protect the vehicle or have a high enough limit for damage caused on the way to storage. If the vehicle is damaged in transit, the owner likely will first seek recourse against the apartment community.
Another example is the risk associated with the use of consultants. Apartment managers will most likely need to rely on a professional liability policy rather than general liability coverage for most claim related items.
The devil has never been more in the detail, which is pushing the need for risk managers to cover the bases better than they did several years ago, says RealPage Vice President of Vendor Credentialing, Tracy Castleman.
“What’s changing, is the way that people are tracking insurance,” said Castleman, a licensed risk manager and property and casualty adjuster who has managed vendor programs for the real estate industry for the past 14 years.
“Focusing on the basic policy types such as general liability, auto liability and workers’ compensation is no longer enough. As property managers, we need to ensure that specialty coverages such as towing, professional, pollution and cyber liability are also tracked when appropriate for the scope of service.”
Also, Castleman says, the need for obtaining copies of applicable policy endorsements has never been more important. When clients aren’t tracking endorsements she raises a red flag.
That’s when an effective vendor credentialing solution really jumps into action.
“I know they need our help as there are often contractual requirements from lending and management agreements for these items that they are not addressing.”
Tiered coverages the new industry standard
Tiered coverages or endorsements have become the new industry standard, and working with a vendor credentialing company that offers an inexpensive, flexible package is important.
Not every vendor represents the same exposure to the apartment community so the tier approach affords operators the ability to customize their insurance requirements when credentialing vendors before they provide services on or off the property. Tiers on RealPage’s Vendor Credentialing platform allows risk managers to match the necessary levels of exposure with vendors. The credentialing process provides the foundation of a general liability policy but makes sure property managers get the specialty coverages needed.
“It’s important to be able to have the flexibility in the amount of tiers that you can work with,” Castleman said. “You can really customize based on exposure rather than carrying an old, standard one-size-fits-all platform.”
Putting minds at ease over risk management
RealPage Vendor Credentialing is a powerful tool that offers property managers the ability to work with the right kind of vendors to meet specific compliance requirements. Dashboards provide visibility into their compliance status, success metrics, background checks, risk levels and more for a comprehensive performance profile to aid the selection process.
Credential Key and Vendor Marketplace, which are Vendor Credentialing features, enable property and risk managers to choose and credential the right vendors around the clock quickly and comprehensively. Property management companies have access to a network of 135,000-plus vendors that service more than 400 industries in the multifamily housing market.
The combination is helping properties fill risky loopholes through the right endorsements and has earned high marks from insurance agents and customers, Castleman says. Credential Key provides detailed endorsement tracking so that property managers get what they need quickly, closing the approval process from days and weeks to hours.
Ongoing support from start to finish ensures that the tailored vendor credentialing program puts minds at ease over risk management.
Leveraging insurance and risk management expertise
The vendor credentialing and vendor marketplace platforms are taking a lot of the guesswork out of compliance and risk, which is creating a number of referrals by insurance agents who are working with approved vendors, Castleman says. That’s quite a testament to the effectiveness of the products.
A big reason is that the platforms provide search capabilities for compliant vendors, thus minimizing risk while reducing the chance for something slipping through the cracks using internal credentialing.
“We’re going to be in a better position to fill in those loopholes compared to having it done in-house by someone in accounts payable, for example, who may have to manage compliance and credentialing secondarily to their primary job function,” Castleman said. “They may not be fully familiar with the types of specialty coverages and associated risks.
“Leveraging someone with insurance and risk management expertise covers the bases and provides greater protection for a management company.”
Learn more about everything you need for effective and easier vendor management.