If you're running a property management business in Pennsylvania—or thinking about starting one—you've probably wondered what insurance you actually need to carry. The short answer? More than you might think, even though Pennsylvania doesn't mandate much on paper. Here's what surprises most people: while the state doesn't legally require general liability insurance for property managers, you'll struggle to land a single client without it. Let's break down what Pennsylvania actually requires, what your clients will demand, and what makes sense to protect your business.
Pennsylvania's Licensing Requirements for Property Managers
Before we even talk insurance, you need to understand Pennsylvania's licensing landscape. Anyone who leases, lists, or manages real estate for others needs a real estate license from the Pennsylvania Real Estate Commission. There's one important exception: property owners managing their own properties are exempt. But if you're managing properties for other people? You need that license.
To work as a property manager for an existing firm, you'll need a real estate salesperson license. That means you must be at least 18 years old, have a high school diploma, complete 75 hours of pre-licensing education, and pass both the national and Pennsylvania-specific portions of the real estate licensing exam. Planning to open your own property management company? You'll need a broker's license instead, which requires two years of full-time real estate salesperson experience, 240 hours of broker pre-licensing coursework, and passing the broker exam.
Workers' Compensation: The Non-Negotiable Requirement
This is where Pennsylvania draws a hard line. If you employ even one person—full-time, part-time, or seasonal—you must carry workers' compensation insurance. No exceptions, no wiggle room. The penalties for non-compliance aren't gentle, either. A misdemeanor conviction can hit you with a $2,500 fine and up to one year in prison. A felony conviction? That's a $15,000 fine and up to seven years behind bars.
The good news is that workers' comp for property management isn't particularly expensive compared to higher-risk industries. In 2025, the average rate for property management sits around $2.48 per $100 of payroll. So if you're paying an employee $50,000 annually, you're looking at roughly $1,240 in workers' comp premiums. And as of January 2025, maximum weekly benefits for temporary total disability rose to $1,347 per week, giving your employees solid protection if they're injured on the job.
One important detail: if an employee suffers a work-related injury that causes more than one day or shift of lost time, you must file a First Report of Injury with the Bureau of Workers' Compensation within seven days after the disability begins. Missing that deadline can create headaches down the road.
General Liability Insurance: Not Required, But Unavoidable
Here's where things get interesting. Pennsylvania doesn't legally require property management companies to carry general liability insurance. In theory, you could operate without it. In practice? You won't get far. Most landlords and property owners will demand a certificate of insurance before they'll even consider hiring you. They want proof that if something goes wrong—a tenant slips on an icy walkway, someone gets hurt during a property showing, or property damage occurs during maintenance—you have coverage to handle the claim.
Common general liability limits for property management businesses run around $1 million per occurrence with a $2 million aggregate. That means your policy will cover up to $1 million for any single incident and up to $2 million total during the policy period. Many contracts specify these exact minimums, so you'll likely need at least this much to compete for business.
General liability shields you from lawsuits related to bodily injury, property damage, and personal injury claims that arise from your business operations. It's the foundation of your insurance program, even if Pennsylvania doesn't force you to buy it.
Professional Liability (Errors and Omissions): Protecting Against Mistakes
Pennsylvania doesn't require errors and omissions insurance by state law. But just like general liability, you'll find it's practically mandatory in the real world. Real estate agencies, brokerages, and client contracts routinely require property managers to carry E&O coverage. Some insurance carriers covering your errors and omissions policy will also want to know about new entities when you start property management operations.
Professional liability insurance covers you when you make a mistake in your professional duties. Maybe you failed to properly screen a tenant who caused significant property damage. Perhaps you missed a lease renewal deadline, costing the landlord rental income. Or you provided incorrect advice about fair housing laws that led to a discrimination claim. E&O insurance defends you against these claims and covers settlements or judgments.
This coverage is especially critical because general liability won't cover professional errors. If a landlord sues you for negligence in managing their property, your GL policy won't help—that's exactly what E&O is designed for.
Cyber Liability: The Modern Essential
Property management companies handle sensitive information constantly—tenant Social Security numbers, bank account details, credit reports, and financial records. That makes you a target for cybercriminals. Cyber liability insurance has become indispensable in an era of escalating cyber threats.
If hackers breach your systems and steal tenant data, cyber insurance covers the costs of notification, credit monitoring services, legal fees, and potential lawsuits. It also covers business interruption losses if a cyberattack shuts down your operations. Some policies even include ransomware coverage, paying the ransom and restoration costs if your systems are locked by criminals.
While Pennsylvania doesn't require cyber insurance, the potential financial devastation from a data breach makes it a smart investment for any property management company that stores tenant information electronically.
Getting Started: Building Your Insurance Program
Start with workers' compensation if you have employees—it's the law. Then layer in general liability coverage with at least $1 million per occurrence and $2 million aggregate limits. Add professional liability insurance to protect against errors in your property management duties. Finally, consider cyber liability if you store any tenant information digitally.
Talk to an insurance agent who specializes in business insurance for property management companies. They can help you identify coverage gaps and find policies that match your specific risks. Review your client contracts carefully—they'll often specify minimum coverage requirements you'll need to meet. And remember to update your insurance as your business grows. That small property management company managing five units today might be handling fifty next year, and your insurance needs will grow right along with it.
