Home Inspector Insurance

Carrying the proper home inspector insurance is crucial for any home inspector or home inspector insurance company that is looking to operate effectively in the real estate market. Before any home is bought or sold, an inspection from a licensed home inspector is typically requested, and often required. If a home inspection reveals that the home fails to meet building or safety codes, a buyer can usually back out of the purchase with no penalty. Home inspectors fill an essential role in the real estate process and are responsible for safeguarding homes and the families that live in them from faulty design or cut corners buy a building company. But it is just as important that a home inspector safeguard themselves and their business by obtaining home inspector insurance. Every year, home inspectors and companies are sued for tens of millions of dollars (without home inspector insurance) due to damage caused on property or issues that were missed during a home inspection. Home inspector insurance is designed to help mitigate the effects of these lawsuits and in many cases, home inspector insurance can help to keep a home inspection business afloat. The fact is that insuring a home inspection business with home inspector insurance is necessary for anyone serious about performing well in the industry. Home inspector insurance can be divided into two categories: general liability home inspector insurance and professional liability home inspector insurance, also known as “errors and omissions home inspector insurance” or “E and O home inspector insurance.” It is worth knowing how the two types of home inspector insurance operate in helping to keep a home inspector safe.

General liability home inspector insurance covers two types of incidents:

Property Damage

• This coverage comes into play if a home inspector damages the property of the homeowner, for example by backing the truck into the garage and causing the garage door to break.

Bodily Injury

• This home inspector insurance coverage is used if a home inspector injures the homeowner or an individual in the home.
Professional liability home inspector insurance also covers the same two types of incidents, but because of a home defect causing property or personal damage due to an error on the part of the home inspector. For example:

Property Damage

• A leaky window is not noticed by a home inspector and a rainstorm causes water damage to the inside of the home.

Bodily Injury

• A wire or panel is not properly grounded, but is not noted on the inspection report, leading to an injury to the homeowner. Home inspector insurance coverage provided by professional liability home inspector insurance is a type of home inspection insurance that covers what are known as errors and omissions. Errors are items in an inspection that an inspector simply does not see as they inspect the home. This can be anything from faulty wiring or a leaky roof to poorly constructed steps or a cracked window. The home inspector is unaware of these items, even after the inspection, but later, they cause damage to the home. A homeowner may choose to sue a home inspector for failing to notice a faulty item, at which point professional liability home inspector insurance would step in to assist. Omissions, by contrast, are items that a home inspector noticed but did not list on the inspection report. This can be because they fell within a range of tolerances or because they appeared so minor that they would not cause an issue. If property damage or bodily injury occurs because of an item that was omitted, an inspector may find him or herself served with court documents. Again, professional liability home inspector insurance will take up the cause of the inspector, paying both court costs and any eventual settlement amount that is reached. There are several things to bear in mind when obtaining any home inspector insurance. First, inspectors must understand that any type of home inspector insurance – general liability or errors and omissions home inspector insurance – will not cover deliberate acts or duplicity on the part of an inspector. If it can be shown that the home inspector intentionally backed their truck into the homeowners’ garage or chose not to report a serious home safety issue on their report, their home inspector insurance will be invalid and will not cover any court costs or payouts. Second, while home inspector insurance will cover the acts of employees working for the home inspection business, they will not be covered if they act in a criminal manner or lie on their inspection reports. In this case, the employee will not be personally covered, but the business will remain covered as it was only the act of one individual, not the company as a whole that resulted in the home inspector insurance breach. In both cases - general and professional liability home inspector insurance – the function is to protect the home insurance business in the event of a lawsuit from a homeowner. Not only will homeowners pursue a building company if a defect is noticed in their home, but will usually come after an inspector that has failed to notice or omitted an item on their report. Many inspectors feel that being certified, without home inspector insurance, is sufficient protection against lawsuits. While certification is a requirement in many states, this designation in no way prevents homeowners or other individuals present on the inspected property from suing for damages caused directly or indirectly by the home inspector. In many cases, the fact that a home inspector is certified means that they are expected to notice and report even the smallest flaw in a home, and will be held to a high standard should a court trial take place. In order to succeed in the competitive home inspection market, not only an eye for detail but also the right home inspector insurance coverage is necessary. A company owner must get home inspector insurance for their home inspection business in order to have it protected against accidental property damage and injury, as well as an errors or omissions that occur during their inspection of the home.