Selecting Liability Insurance

What is the difference between the required "general liability insurance" and "errors and omissions insurance?"

Liability insurance provides you financial protection in the event that you damage property or injure persons which may be on site at the time of an inspection. Conversely, E&O insurance is intended to provide you financial protection in the event you are accused of failure to identify, appropriately evaluate, and report adverse conditions which allegedly existed at a property which you inspected. In both types of policies, your coverage is governed by the conditions specified in the insurance policy and will not exceed the limits of the policy.

Am I required to carry Errors and Omissions (O&E) insurance?

No. The Registration Act only requires that you carry general liability insurance. (Please see the previous question which describes the difference between liability and E&O insurance.) We recommend you consider whether carrying O&E insurance is a sound choice, given your particular circumstances. Research the several types of O&E policies and ask questions of appropriate persons to gain a clear understanding of what risks the policies cover or exclude. Ascertain what each insurer?s requirements are for contracts, reporting, etc., what decisions you are free to make, and what you must do or not do to jeopardize your coverage. Likewise, we suggest you research what the average claim against a home inspector is. Enlighten yourself through diligent research and consider your own risk taking tolerance. Then decide whether to assume all or part of the risk.