Home Inspector Insurance

To protect your business against the risks you are most likely to face as a home inspector, consider the following coverages as part of your risk assessment strategy:

• Errors and Omissions Insurance (E&O): This coverage protects home inspectors against claims from clients alleging they’ve experienced financial loss because of a service you provided. Claims can involve lawsuits for failing to deliver a service as promised due to accusations of negligence or misconduct. Here’s an example of an E&O claim for a home inspector – say you told a client that the roof on their potential home was in perfect condition before the closing of the sale. They went ahead with the purchase but then found out you’d overlooked an area of significant roof damage that would’ve deterred them from closing. Your client sues you for failing to accurately report the quality of the roof – in this case; an E&O policy may cover the cost of the legal fees.

• Commercial General Liability Insurance (CGL): Accidents can happen anywhere, and in a home inspector’s case, they’re likely to occur at somebody else’s property. Commercial General Liability Insurance can protect home inspectors against common claims such as third-party bodily injury or property damage. Suppose you’re conducting a home inspection, and you accidentally break a pipe on the furnace while trying to inspect the service record tag. The homeowner could sue you for damaging their property – CGL could cover the cost of replacing the furnace along with any legal fees associated.

Additional coverages to consider:

• Commercial Property Insurance: Commercial Property Insurance protects your business location and the property inside from an insured event, such as a fire, theft or vandalism. Even if you work from home, Commercial Property Insurance can be an important coverage if you have expensive equipment for your inspections, as this is unlikely to be covered by a homeowners policy. Suppose your office experienced water damage from a burst pipe and destroyed the expensive drone you use for aerial inspections. In this case, Commercial Property Insurance could cover the cost to replace your drone and any other business-related property that was damaged or destroyed.

• Cyber Liability Insurance: Cyber Liability Insurance may be critical coverage for your home inspection business if you hold or share the results of a home inspection with your client online. Cyber Liability Insurance covers the financial losses caused by cyberattacks or other tech-related risks, along with privacy investigations or lawsuits following an attack. For example, confidential data you hold about multiple home inspections is hacked, and the hacker is using this information as ransom. Cyber Liability Insurance could cover the cost of the ransom and any other fees required to restore data.