Errors and Omissions Insurance for the Professional Home Inspector

The increasing complexities of real estate transactions and the rising use of litigation have prompted a need for Errors and Omissions Insurance for home inspectors (E & O Insurance) programs to reduce the risk to Professional Home Inspectors against potential lawsuits. The following items address Errors and Omissions Insurance, answering many of the questions Home Inspectors may have about how Errors and Omissions Insurance works and guidelines on what it should include.

For the Professional Home Inspector, Errors and Omissions Insurance works as a safety net. Errors and Omissions Insurance is a policy that provides coverage from a potential claim arising from professional advice or service all of which Professional Home Inspectors provide. If there is a claim against you for services provided or services you failed to provide that resulted in an error (or omission) that you have made or that a client has perceived you have made you can look to your Errors and Omissions Insurance to help. Errors and Omissions Insurance for home inspectors can also cover attorney fees as well as the amount of a settlement if you are found at fault.

Errors and Omissions Insurance can and must be tailored to your specific company needs. Coverage can be written to include you, your W2 employees and 1099 Contractors. This type of coverage is generally excluded by your Commercial General Liability policy, and if there is additional coverage for this exposure it may have limitations that you may not be aware of. Be sure to have the following information written into your Errors and Omissions Insurance policy:

Dollar amount for each liability
Deductible amount for each liability
Deductible amount for defense costs
A section explaining what the policy is for: "This policy applies to errors, omissions or negligent acts in the course of providing or failing to provide professional services."
A section listing the services you provide in as much detail as possible
The retroactive date for claims ( unless written by an occurrence form)
Errors and Omissions (E & O) Insurance should be your safety net. Consider the consequences; we all make mistakes even when we’re at our best. Professional liability Insurance may not have the coverage you need. The best time to buy Errors and Omissions Insurance is before you need it.