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Errors and Omissions Insurance (E&O) for Home Inspectors

Home inspectors play a vital role in the residential real-estate process, providing prospective homebuyers an objective evaluation of a property's condition. Unfortunately, home inspectors also are vulnerable to charges of professional error and negligence, if they fail to document all of a property's liabilities. Errors and omissions insurance (E&O) provides home inspectors a defense.

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What is home inspectors' errors and omission insurance?

  • Home-inspector E&0 insurance covers losses and expenses generated by client claims of error, omission, or negligence during the inspection of a residential property.
  • Most suits against home inspectors result from property liabilities that were not properly documented or visible at inspection.
  • Claims generally seek awards for property damage (a leaking roof that was not included in the inspection report) and/or bodily injury (a faulty staircase that went undocumented and later causes injury.)

Why is home inspectors' E&O insurance necessary?

  • Home inspectors are often targeted by dissatisfied homebuyers.
  • Many states have passed legislation requiring home inspectors to carry errors and omissions insurance. Some even require specific coverage amounts.
  • Most home inspectors ask customers to sign a waiver limiting liability. However, E&O insurance is still a crucial safeguard for home inspectors, protecting their finances and professional standing should a legal action be taken against them.

What else should I know?

  • The cost of home inspectors' errors and omissions insurance will vary from state to state. For example, E&O insurance is generally more expensive in California than in other states.
  • When shopping for E&O insurance, inquire about the maximum coverage per claim and per year
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