What is e and o insurance? It’s a type of insurance that professionals such as home inspectors carry to protect themselves and homeowners in the event of home damage caused by neglect during the inspection.
When a home inspector overlooks some element of a home inspection and then later, because of his error, damage results, whose fault is it? In almost every case, a court will decide that the inspector is liable for the damage. Errors and omissions insurance, usually referred to as e and o insurance, can prevent complicated lawsuits and huge losses by compensating for damages caused by an inspectors error.
Should a case end up in court, e and o insurance typically covers court costs as well as the settlement up to the level stated within the insurance contract.
As the name implies, e and o insurance is designed to protect against damages that are the result of the oversight of a home inspector – not to cover damages he causes to person or property during in inspection. An omission means something was omitted during the inspection, and this can bring about problems ranging from minor to catastrophic.
Inspector oversights can cause flooding or fire somewhere in the future following the inspection. Simply neglecting to inspect a section of pipe or wiring can be all it takes to seriously damage – or destroy – a home. It can also result in injury or death to individuals within the structure.
If the homeowner in these and other serious cases hired a home inspector with e and o insurance, due compensation will be forthcoming according to the level of coverage in the inspector’s insurance policy. If the inspector is without this kind of insurance, however, the homeowner will be forced to sue, and depending on the level of damages sought, the inspector (or the company he works for) may never be able to provide restitution.
In addition to home inspectors, many other professionals carry versions of e and o insurance that are tailored to their specific fields. Examples include consultants, real estate brokers, IT service providers, architects, web designers, attorneys, engineers and others. This is an important component of the insurance package of any individual who advises clients and/or confirms that a specific action or a specific physical structure is safe.
It’s impossible to imagine all the possible damages that could result from a home inspector’s oversight. Fortunately, the majority of inspectors are well-trained and careful in their work – they don’t want to be responsible for any damage to their clients’ homes. Yet when damage due to negligence or an inspection error does occur, a sufficient level of e and o insurance coverage is the only way for both the inspector and the homeowner to be protected, and in many cases, it’s the only way a homeowner will be fully compensated for damages.
Andrew Lazaunikas is a freelance writer representing Elite InspectInsure, an insurance agency based in Exton, Pa., that provides e and o insurance for professional home inspectors and inspection companies. You can learn more about Elite InspectInsure by visiting EiiPro.com. http://www.eiipro.com/products/home-inspectors-e-o/
EiiPro provides exceptional Errors and Omissions Insurance coverage to home inspectors. Fully dedicated to the professional home inspector, our Errors & Omissions Insurance is a vital tool in the inspectors business tool box. Helping to determine your E&O Insurance coverage, limits, deductibles and business life changes, we deliver peace of mind for those inspecting commercial and residential locations. Give us a call today at 800-355-1185 or email @ [email protected]