Home Inspector Errors and Omissions
(E & O Insurance)
Home inspectors offer a professional service and should carry professional errors and omissions insurance. This type of insurance policy can be customized to fit your particular operation and can offer a level of protection if there are claims made against your service or even advice you may have offered to clients. In the home inspection business clients have the opportunity to place responsibility on you and your company for any failure or error that may have been caused during your inspection. This type of insurance is often referred to as Errors and Omissions or E&O policy. The policy can also include items such as radon liability, termite liability, premises liability, and pool and spa liability.
An E&O policy will provide your company, your employees and you with protection against lawsuits or claims that are based on omissions or mistakes made in your inspection which resulted in financial damages for the client. The policy can even be prepared to provide protection from fees charged by attorneys or a settlement amount if you are determined to be guilty of an error or omission.
Here are some other bits of information that may apply directly to your operation:
- Most investors and venture capitalists require an E&O policy in addition to federal and state licensing requirements.
- Certain E&O policies will extend not just to W2 workers as well as subcontractors who receive a 1099
- E&O coverage will usually be kept out of a General Liability policy. In addition if there is E&O coverage there may be certain restrictions that are not in your best interest.
Prices for E&O insurance for house inspectors will vary based on specific factors. The policy should be tailored to your business and needs to have at least the following details:
- The deductible for each type of liability
- The total dollar amount that will be paid for each liability type
- A services section that itemizes the type of services you offer in detail
- An explanatory section detailing the nature of the policy i.e. “This policy applies to errors, omissions or negligent acts in the course of providing or failing to provide professional services.”
- The deductible that needs to be paid to cover legal defense fees
- A retroactive date to file claims
It is a given that people, as well as companies, will make mistakes. In order to protect you and your company against any type of error or omission it is necessary to have a good E&O policy in place to provide protection against mistakes made by your workers or yourself.