How errors and omissions insurance safeguards both homeowners and home inspectors
Just like you wouldn’t let a doctor without malpractice insurance operate on you, you shouldn’t let a home inspector without errors and omissions insurance inspect your home. There are two primary reasons for this.
When a home inspector carries errors and omissions insurance, it shows that he’s serious about his business and his craft. It also says he cares about safeguarding the people he works for and the homes they live in. In other words, he operates with a high degree of professionalism.
Commonly referred to as e & o insurance, this coverage protects both the inspector and his clients. Unlike general liability insurance (which inspectors should also carry), e & o insurance comes into play in the event of an oversight on the part of the inspector that causes some sort of damage down the line.
For example, an oversight during an inspection of a plumbing system could mean a faulty pipe was left to continue degenerating until eventually the homeowner has a major flood. Accidentally overlooking elements of inspection for a house under construction could mean serious safety violations and danger for future residents.
In these and a multitude of other scenarios, e & o insurance will cover damage or injury claims that occur after the inspection is performed. Millions of dollars are paid every year in errors and omissions claims. If a home inspector doesn’t carry this coverage, in many cases a homeowner will be left with no way to pay for damage or injuries caused by the inspector’s oversight.
The worst-case scenario, of course, is when a person living in the home is injured or killed. In these cases, e & o insurance can be likened to malpractice insurance for physicians. If a doctor performs a procedure or offers advice that results in a patient’s injury or death, the dollar amount awarded to the victim(s) by the court would likely be far too great for the physician to personally pay.
A home inspector faces the same possible scenario. If an oversight on his part results in catastrophic damage to the home – fire, flood, cave in, air poisoning, etc. – or serious injury or death to a person living in the home, he will very likely be held partially or fully responsible. A lawsuit of this magnitude could destroy his or his company’s business.
In summary, a home inspector with e & o insurance shows that he’s serious about his business and is very concerned with safeguarding his clients against errors he may make in the course of his work. This insurance protects both homeowners and inspectors in the event of damage or injury down the line.
Erica is a freelance writer for Elite InspectInsure, a professional agency based in Exton, Pa., that provides errors and omissions insurance for professional home inspectors. Learn more at EiiPro.com.