Tenant Discrimination Liability Insurance

| September 22, 2017
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Most landlords don’t realize that they can be sued for a variety of “discrimination claims,” many of which will be without basis in reality. Tenant discrimination is on the rise. Will you be covered if someone decides to file a lawsuit against you?

State and federal laws such as The Fair Housing Act  prohibits discrimination in rental housing based upon a various number of factors including race, color, sex, age, handicaps, and family status. The following are types of illegal discrimination that are covered by the above federal discrimination acts:

Discrimination based on the following:

  • Race, Color, or Religion
  • Age
  • Sex
  • National Origin
  • Disability (Mental & Physical)
  • Pregnancy
  • Sexual Orientation

Harassment, in the following circumstances:

  • Sexual harassment
  • Non-sexual harassment
  • Assault and battery (if related to sexual harassment)

The good news is that you can be insured against these claims – that coverage just isn’t automatically included. We highly recommend you look into Tenant Discrimination Insurance.

Tenant Discrimination Liability Insurance  protects landlords in the event of a discrimination, harassment or wrongful eviction lawsuit—none of which are covered under a typical General Liability Insurance policy or Employment Practices Liability Insurance policy. After the insured meets the deductible, Tenant Discrimination Liability Insurance covers legal costs and damages stemming from the above claims.

A commercial general liability policy covers you from any bodily injury or property damage done to others on your property. ‘Discrimination’ slips through the cracks in this language – it doesn’t qualify as a ‘bodily injury’, but the claim will say that the tenant feels injured nonetheless and deserves to be compensated for mental distress, monetary loss, or other ‘injuries’ of a non-physical type. Many landlords don’t know that this coverage exists or that it’s extremely necessary, and quite a few are very upset to discover that their general liability doesn’t cover them in this situation. Don’t get caught after the fact – make sure you’re covered against these types of lawsuits before they occur.

Our experience at is that acting in good faith is not always enough to prevent costly discrimination lawsuits. You may have evicted a tenant for perfectly sound reasons, but if the tenant claims that your eviction was because you are prejudiced against them in one of the above areas, they may still be able to bring a case against you. While many complaints are legitimate, a growing number are simply “nuisance” claims who hope to make a quick buck or who hold a grudge against their landlord.

Without Tenant Discrimination Insurance, you will be liable for the costs of fighting such cases in court, and if you lose, you will also be liable for the cost of damages. You may decide it’s not worth taking to court and decide to settle, which will also incur costs – and may damage your reputation. As a landlord, it’s in your best interest to protect yourself from these inevitable lawsuits – and if you only have a general liability policy currently, you are not covered now.

According to NAS Insurance Services, with the addition of tenant discrimination coverage, property insureds are covered from allegations and suits from current, prospective and former tenants and any other non-employee alleging discrimination (including violations of ADA), harassment, and/or wrongful eviction.

Tenant discrimination can be a major concern for property managers. Protection in this area is not always covered by general liability policies, so make sure to ask specially about adding tenant discrimination insurance. Adding tenant discrimination insurance can cover property managers when current, prospective or former tenants allege wrongful discrimination.

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