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Honest mistakes happen regardless of a person's level of professionalism, training or good intentions. And certified home inspectors, like everyone else, must take the possibility of error into account every time they climb into their car and head to a new real estate inspection.
Understanding that lawsuits are commonplace these days, home inspectors should look closely at the benefits of Errors & Omissions insurance (E&O). E&O insurance is liability insurance that covers your company if a client claims that you did not live up to the terms of the business agreement.
Future home inspectors should realize that there's more to consider than just the nuts and bolts of a home inspection job when you undertake a home inspection career.
As home inspections become more common, clients increasingly expect home inspectors to go beyond their job description, acting as mold inspectors, building code experts or licensed contractors. A very simple and pain-free way for home inspectors to protect themselves from risk is the pre-inspection agreement, which lays out what you will and won't do during a home inspection.
Yet even a pre-inspection agreement won't cover a home inspector from a wide range of legal action - that's where E&O insurance comes in. It's more reasonable to believe that you might never get sued over a mistake, than to suggest that you and your inspectors won't ever commit a blunder on the job.
Home inspection business without E&O insurance can go belly up after a devastating lawsuit; clients can and do sue for millions of dollars if a home inspector overlooks something that later leads to trouble. A home inspection business with E&O insurance, however, will only pay the policy deductible, which may be the difference between spending a few thousand dollars and a bankrupt business.
People looking at home inspection training should inquire whether a prospective home inspection school has relationships with professional home inspection associations. Some schools offer waived or discounted membership fees to associations, many of which offer reduced rates on E&O insurance. Don't wait until it's too late to protect yourself and your business from a devastating lawsuit.
By Robert Fay, Allied Schools, http://www.homeinspectioncourse.com/
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