by 
The Curious Bag
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<h4 class="dechead">On One Hand: Protect Your Business
Many insurance brokers will recommend E & O insurance for property management companies because we live in such a litigious society, and an error can occur upon any transaction.
On the Other: Not always necessary
Property damage liability, a major source of lawsuits, is covered under general liability insurance. Therefore, if you elect to carry errors and omission insurance, you are covering your business twice-over. In addition, most responsibilities between the property management company, the owner and the client are spelled out in the leases, and therefore lawsuits tend not to go very far if ways of handling the dispute were previously spelled out in writing.
Bottom Line
There is no absolute yes or no regarding whether or not property management companies carry E & O insurance; it depends on the size of the company, the type of property being rented out and the agreements written before between the owner, the company and the tenants. It can be an added protection for a larger business working with upscale properties, such as downtown condos or luxury vacation rentals.
Source:
BusinessInsuranceNow.com: Types of Small Business Insurance
WallStreetJournalOnLine.com: Errors and Omissions Insurance: Who Should Be Covered?
Axins Insurance Company: Errors and Omissions Insurance For Commercial Real Estate
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