Errors and omissions insurance should be a key component of every home inspector’s portfolio which no professional home inspectors can’t work without.
Professional home inspectors can’t work without errors and omissions insurance because it’s extremely risky. Here’s why this insurance should be a key component of every inspector’s portfolio.
Home inspector scenario
A home inspector is called to a residence to perform a thorough inspection as part of preparations to sell the house. He goes through an exhaustive checklist, making notes where necessary. He’s found several areas within the home that need repair and a few items that need replacing. He signs off, gets paid, and leaves the residence.
The house is sold. A month later, during a storm, a moderate-size branch breaks off from a tree and lands on the corner of the roof, caving it in. An investigation determines that a number of boards in that section of the attic were rotted – and that the rot clearly began long before the new owners moved in a month ago.
So what happened?
The inspector failed to traipse through to the far corner of the attic during his inspection. All the attic boards he did examine looked fine, with no signs of leaking or rotting. This is called an error, and guesses who might be held responsible?
If the inspector is not carrying errors and omissions insurance – usually referred to as e and o insurance – he could be held liable for the cost of repairing the roof and any other related damage.
The new owners won’t feel responsible, because they moved into a home in which the inspector signed off on everything and in which the previous owners made certain necessary repairs and replacements.
The previous owners would have had the rotten attic boards replaced, had they known of the issue. But since they didn’t, they won’t feel responsible for paying for the damage.
Home inspector, errors and omissions insurance
Every year there are millions of dollars in lawsuits filed because of errors on the parts of home inspectors. The example above is just one of many things that can accidentally be overlooked during an inspection. Some types of damages resulting from inspection errors are much more serious, particularly when they involve human injuries or death.
Working without errors and omissions insurance in today’s litigious society is risky. Private contracting inspectors and entire inspection companies can be wiped out in the aftermath of a catastrophic disaster resulting from an oversight on the part of an inspector. For this reason, more home inspectors than ever before are taking advantage of e and o insurance to cover the costs of a lawsuit and allow them to continue working.
Some may wonder if this insurance is really necessary – how many errors can a trained inspector make? The answer is, the inspector would never purposely overlook an element of inspection, but the inspector is human, and like all of us he is prone to error. Errors and omissions insurance safeguards the inspector when errors occur.
This guest post was submitted by Erica Ronchetti
Erica is a freelance writer interested in the services provided by Elite InspectInsure, an Exton, Pa., provider of errors and omissions insurance for independent home inspectors and companies that perform this work.