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. This is usually as part of preparations to sell the house. The inspector goes through an exhaustive checklist, making notes where necessary.
He discovered several areas within the home that need repair and a few items that need replacing. He signs off, gets paid, and leaves the residence.
A month after selling the house, 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 examined look fine, with no signs of leaking or rotting.
This is called an error, and guesses who might be held responsible? The inspector could be held liable for the cost of repairing the roof and any other related damage. Especially, if the inspector is not carrying errors and omissions insurance – usually referred to as e and o insurance.
The new owners won’t feel responsible. 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.
Surely, the previous owners would have replaced the rotten attic boards, 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, people file millions of dollars in lawsuits because of errors on the parts of home inspectors. The example above is just one of many things an inspector can accidentally overlook 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 will wipe 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. This will help them 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.
However, the inspector is human like all of us, he is prone to error. Errors and omissions insurance safeguards the inspector when errors occur.