Earlier this month, the parents of Jonathan Swierski, a 20-year-old man fatally shot last July in the parking lot of his apartment complex in Matthews, North Carolina, filed a lawsuit against the complex’s property management company, Highmark Residential LLC, citing “negligent security” as a factor in their son’s tragic death.
The altercation that led to Swierski’s death outside Paces Pointe Apartments involved several people. According to police, the shooter maintained he was a friend of the victim, called 911 and informed the dispatcher that the shooting had been an accident. The case was closed and no charges were filed after police determined the shooter’s weapon was discharged unintentionally.
The suit against Highmark Residential alleges that the shooting would not have occurred if the company had adequate security and lighting in place to deter crime and seeks unspecified compensation for pain and suffering, funeral expenses and the income the victim would have accrued over his lifetime.
“CGL Insurance coverage will help provide a defense in the event of a lawsuit and help protect the insured should the court find them negligent or liable.” – Laura Bates, Atain Insurance Companies
Property owners and management companies are inherently vulnerable to such legal challenges. “Premises liability laws place obligations on property owners to maintain a reasonable level of security,” explained Laura Bates, Corporate Vice President, Atain Insurance Companies, Detroit/Farmington Hills, Michigan.
In addition to providing reasonable security measures, premises liability laws require property owners to make reasonable efforts to maintain and keep their property safe in other ways, such as securing swimming pools and mitigating slip and fall hazards.
To help safeguard themselves and their tenants alike, Bates said, property owners should have suitable insurance coverage, typically a robust Habitational Insurance policy with strong Commercial General Liability (CGL) Insurance coverage, based on thorough risk assessments of their property.
“Property owners and apartment managers should have CGL Insurance in place with appropriate coverage limits,” she maintained. “CGL Insurance coverage will help provide a defense in the event of a lawsuit and help protect the insured should the court find them negligent or liable.”
Apartment property ownership offers growth, opportunities
According to the National Multifamily Housing Council (NMHC), 43 million households in the United States are renters, and 37 percent of those renters reside in apartments. More than 19 million of those renter households—45 percent—occupy apartment complexes with five or more units.
In Canada, apartment dwelling is also prevalent, especially in larger cities. According to the 2016 census, more than 33 percent of private dwellings in Canada were apartments: 18 percent in buildings five stories or fewer, 9.9 percent in buildings five stories or more, and 5.6 percent in duplexes.
IBIS World reported that the U.S. apartment rental industry totaled $176 billion in 2019 and performed strongly over the past five years. Last year the industry involved 563,771 businesses and employed 861,238 people.
In Canada, the apartment rental industry also showed modest growth over the past five years. The total revenue of the Canadian apartment rental industry was $48 billion last year, including 448,448 businesses employing 32,126 people.
Promoting safety protects residents and property owners alike
If a property owner or manager notes an uptick in crime or suspicious activity on their premises, Tyson Peel, Vice President, Director, Property and Casualty, Burns & Wilcox, Toronto, suggests alerting local authorities. This can lead to increased police patrols and help afford higher level of security for residents.
“There are many things apartment complex or property management firms can do to improve a building’s appearance that can also help deter incidents that lead to injury or loss of life.” – Tyson Peel, Burns & Wilcox Canada
Making technological improvements to security is also essential to protecting residents, according to Peel. Such enhancements may include more security cameras, better lighting, and a visible security presence—like a trained security guard—to discourage criminal and other perilous behaviors on the property.
Efficiently managing other aspects of a property can deter crime as well as bodily injury. Services like snow and trash removal, general maintenance, cleanliness and graffiti removal can make a difference when it comes to crime prevention and safety.
“There are many things apartment complex or property management firms can do to improve a building’s appearance that can also help deter incidents that lead to injury or loss of life,” Peel stated.
Risk assessment and transfer critical to safeguard residents and assets
According to Bates and Peel, property owners should consult experienced insurance brokers and agents to assess risks and recommend mitigation and security strategies to better protect residents and owners.
“Insurance brokers and agents will ascertain exposures by asking the right questions and researching the locality to determine the risk level pertaining to these types of incidents and subsequently the level of coverage needed,” Bates explained.
Insurance brokers and agents experienced in CGL and Habitational Insurance policies can help property owners find reputable property inspection services to help find safety hazards and target areas for enhanced security. “We have multiple companies that can perform walkthroughs to determine where potential improvements to the building could be made to help prevent safety hazards and improve security,” Peel noted.
Insurance brokers and agents can also advise property owners on transferring risk by investing in or contractually stipulating CGL Insurance coverage for property management or security companies they employ, Bates added.
Lawsuits, large settlements over apartment security issues occur regularly
Lawsuits related to shooting incidents on apartment complex properties are not uncommon, making headlines in local and national news outlets alike and illustrating the legal and financial challenges of property ownership and management.
Earlier this month a bystander injured in a 2018 shooting at her Ocala, FL apartment complex filed suit against the property management company, citing negligent security. The lawsuit requested compensation for pain and suffering and that the property’s owners improve protection for its residents.
Last month the family of Corrisha Teal, a woman fatally shot at her Memphis, Tennessee apartment complex in June, filed a federal lawsuit against the owners of the complex. The lawsuit alleged that apartment managers ignored complaints about a violent resident who was allegedly involved in the death of another young woman at the complex. That resident has been charged with Teal’s murder, which occurred as she was moving into one of the apartments.
“Unfortunately, there is no simple court definition of ‘reasonable security’ pertaining to premises liability laws.… As such, it is prudent for property owners to fully address their liabilities with insurance coverage.” – Bates
The suit also alleged the property management company failed to implement effective security measures for residents and the property, such as working cameras, roaming security patrols or fencing.
Such lawsuits can come with substantial legal and financial costs. In 2018, the former owner of the Creekside Forest Apartment Homes in South DeKalb, Georgia, agreed to pay $3 million to settle a lawsuit filed by the family of a young man fatally shot in a 2016 robbery attempt in the Creekside Forest parking lot. A relative of the victim was also wounded, but survived.
Along with the settlement, a bench warrant was issued for the former owner over more than 200 code violations and widespread crime at the apartment complex.
“Typically, the property owner/manager would be expected to be aware of violent activity,” Bates noted, “particularly if there is a history on the premises.” She added that property owners are also expected to protect the tenants and visitors from this type of activity.
Being proactive, engaging experts offers strongest defense
Bates identified CGL Insurance coverage as an essential component of any property owner’s protection and risk mitigation strategy. “Property owners should invest in comprehensive CGL Insurance coverage, without exclusions for assault and battery, negligent hiring and supervision, or firearms,” she said.
She also identified an increase in the frequency of third-party liability claims. “While it may seem unreasonable for an individual or business to be held liable for the wrongdoing of another, it is an increasing trend for third-party liability to be asserted against property owners/managers in cases such as these,” she noted.
“Unfortunately, there is no simple court definition of ‘reasonable security’ pertaining to premises liability laws,” Bates explained. “Awards for damages are decided on a case-by-case basis. As such, it is prudent for property owners to fully address their liabilities with insurance coverage.”
According to Peel, some owners and property management companies underestimate the need for broad coverage, especially when it comes to determining their liability limits. “A $1 million limit is probably not realistic these days, considering the level of litigation is increasing.”
Additional coverage, such as Excess Liability Insurance, may be advisable in certain situations. In Canada, Legal Expense Insurance (LEI) provides property owners the opportunity for legal consultations regarding potential claims or risk mitigation strategies related to their property.
Property owners should also ask their insurance brokers and agents about the need for and benefits of Active Shooter Insurance coverage, Peel said. This type of coverage can provide financial protection and aid recovery and mitigation following a large-scale shooting.
With so many factors affecting coverage and liability, Peel asserted, property owners must be proactive when it comes to risk assessment and mitigation as well as investing in the appropriate insurance protection.
“Making sure that you have done everything you can to prevent these types of issues would be the best way to defend yourself,” he concluded.
As with any coverage need, an insurance broker or agent must be consulted. Click here to forward this article to your insurance broker or agent to ask if you need this coverage.
This information was provided by Burns & Wilcox, North America’s leading insurance broker and underwriting manager. Burns & Wilcox works exclusively with retail insurance brokers and agents to assist clients like you with their specialty insurance needs. Ask your insurance broker or agent about Habitational, Commercial General Liability (CGL), or Excess Liability Insurance that might be right for you.