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Anyone researching the potential of a home inspection career on the Internet has probably come across some mention of E&O Insurance. And while some might have no idea what E&O insurance is all about, others may think of it solely as something doctors need to combat malpractice suits. The truth is that certified home inspectors need E&O insurance as much as any other professional.
So what exactly is E&O insurance? It stands for errors and omissions insurance, and it covers home inspectors when they are accused of doing a job poorly or not delivering expected results. If a client brings you into court, E&O insurance will handle the legal fees as well as any settlement that is paid out. A legal suit can easily destroy a home inspection business not covered by E&O insurance; astronomical defense fees, coupled with a negative settlement, may be impossible for an independent business to overcome.
Now you may be saying, what if I get excellent home inspection training, learn my profession well and handle each home inspection job with professionalism and care - why do I need E&O insurance? First-class training is good, but you are a card-carrying member of the human race, and that means you will make mistakes. Does it mean your mistakes during a real estate inspection will lead to legal allegations? Not necessarily, but why take the chance?
It's also important to realize that your general liability insurance doesn't cover errors and omissions on your home inspection report - that's what E&O, or professional liability insurance, is there to take care of.
Remember, E&O insurance rates for home inspectors have been steadily rising, so it's important you research several insurance carriers before making a decision. It's also important to make sure that the language in the policy addresses the specific exposure your business may face. Many professional home inspection associations offer discounted rates on E&O insurance.
If you become a home inspector who works for himself, you will have to inspect more than just faucets and chimneys, you'll have to look into insurance coverage the way any business owner would. But not to worry, if you rely on your home inspection courses, industry associations and make yourself a true student of the profession, by visiting home inspection blogs and websites, you should be able to get up to speed with E&O insurance.
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