My landlord is asking its residents to add them as a 2nd beneficial on our rental insurance. What does this mean (I mean like if something happens to pur property, how would it affect us and them) and is it a good idea?

This would allow your landlord to collect under your policy should you be negligent in doing something to damage their property.But you really shouldn't have to worry about that unless you like set your house on fire or something(which I'm sure you wouldn't).You don't have to do this by law, but if they are asking you to and requiring you to have renter's insurance, then it would be in your best interest to do so. Its neither a bad nor a good thing on your part to add them. Its like neutral, until something happens and you need to collect on yor policy and then your landlord may choose to do so as well. Also, if you were so incapacitated in any way for any reason, then they could speak on your behalf as well a theirs since you rent from them. Hope this helps...also check with your insurance agent/company with any other questions.