Risk management is something we should be proactive at, understanding we can never completely eliminate risks just minimize them. In the litigious society we live in today, our communities/residents and our people are open to hundreds of risks every day. From a piece of broken sidewalk causing a trip hazard, to fair housing and the traps inherent with leasing and residents, our communities and team members are faced with challenges we often know of but fail to be proactive on.
The physical risks can include the fixtures and improvements, but also include the natural occurrences and habitat. Neglecting a tree root near a playground can be just as significant as the tree root that raises a sidewalk causing a very visible trip hazard. Tree limbs hanging down at head level are obvious, however, those over grown bushes where someone could hide behind near the entrance to a building or apartment also should be identified and corrected. A recent budget discussion I had for some consulting work had no funds allocated in addressing issues they knew they had. Having identified these concerns and then failing to budget to correct them could lead to perceived negligence, opening them up to increased liability. When I asked about their position on this I was simply told, "we'll address if it gets worse or we have a problem with it." The manager stated she had put tree trimming and sidewalk repairs in the budget last year, only to have it removed so this year she didn't even consider placing it in the plan. When I asked how much their insurance had increased in the last five years the response with "significant." I also asked them how many claims they had in the past three years dealing with these types of issues, stated they had eleven or twelve. I requested they contact their insurance carrier about how much that impacted their increases, and what dollar amount it may have factored into their premiums (outside of normal increase history we are seeing). The response they received opened their eyes to the purpose of my inquiry and concern. The agent talked to their underwriting department and stated the estimate based on their loss structure the premium increased was approximately six thousand dollars just this past year. When reviewing the total estimated repairs to correct the identified areas a number of $3,200 was provided. Three of the areas were documented as being hazards still not corrected from incidents over the last two years and budget periods. Needless to say they made corrections to their budget and did a review of all of their sites finding similar traits.
As property managers, our fiduciary responsibility is to identify and submit corrective action on these types of risks. If ownership or upper management takes them out, maybe...just maybe we didn't do our homework and "sell" the budget item correctly. Providing pictures and loss history along with some of the research I recommend may have prevented or reduced higher premiums and the time as well as personnel resources to handle these claims. Simply not acting because of past trends is neglectful on our part, and is adding to what we are seeing with increased premiums. I also recommended sending the insurance carrier corrective measures taken before renewal and asked them to contact the carrier and identify if this would help in their evaluation of premiums.
Risk management is everyones job, and your entire team should be alert to possible risks and know the procedure for reporting. Limbs over roof lines during a storm can cause significant damage to gutters and shingles, which is one of the most frequent items I discover in doing site evaluations. Some of these areas are so simple to correct and can save thousands in deductibles, hours spent to address, and possible human injury or even death. Taking time each month to review your community or property from a risk standpoint is your responsibility and obligation as a professional property manager.
