Growth in Home Sales: E&O Insurance for Professional Home Inspectors

With the current recession coming to a close, economists are predicting an 11% sales increase of new and existing homes, as well as an overall stabilization of home pricing. It’s expected that home sales will pick up significantly mid-winter (after Super Bowl Sunday) and home prices will become stable next year, with a median resale price of $170,800. The housing market has experienced an annual 23.3% increase, recording the largest seen in 30 years. Due to the anticipated increase in home sales, professional home inspectors will be needed to perform additional inspections. can provide important coverage for all of the increasing complexities of real estate transactions, especially in light of the growth in home sales.

The rising usage of litigation has prompted a need for Errors and Omissions Insurance (E & O insurance) programs to reduce the risk to Professional Home Inspectors against potential lawsuits. The following items address E & O Insurance, answering many of the questions Home Inspectors may have about how E & O Insurance works and guidelines on what it should include.

For the Professional Home Inspector, E & O Insurance works as a safety net. E & O is a policy that provides coverage from a potential claim arising from professional advice or service all of which Professional Home Inspectors provide. If there is a claim against you for services provided or services you failed to provide that resulted in an error (or omission) that you have made or that a client has perceived you have made you can look to your E & O Insurance to help. E & O Insurance can also cover attorney fees as well as the amount of a settlement if you are found at fault.

Be sure to have the following information written into your E & O Insurance policy:

• Dollar amount for each liability.
• Deductible amount for each liability.
• Deductible amount for defense costs.
• A section explaining what the policy is for: “This policy applies to errors, omissions or negligent acts in the course of providing or failing to provide professional services.”
• A section listing the services you provide in as much detail as possible.
• The retroactive date for claims (unless written by an occurrence form).
• E & O Insurance should be your safety net. Consider the consequences; we all make mistakes even when we’re at our best. Professional liability Insurance may not have the coverage you need. The best time to buy E & O insurance is before you need it.

Grace Enderlein is a freelance writer and editor. “Growth in Home Sales: E & O Insurance for Professional Home Inspectors” notes that E & O Insurance inspector can protect against property frauds. Eiipro.com offers competitive, cost effective Error & Omission insurance

 

Protecting a Home Inspector with Proactive Measures and Home Inspector Insurance

The home inspection field is infamous for having many lawsuits, even when a home inspector is not at fault for any problems which may have occurred. Even the very best of home inspectors are sued, and they need to protect themselves and their businesses with home inspector insurance in case this happens. There are measures they can take in addition to having home inspector insurance to protect themselves.
Being educated and certified in the home inspection field, and using consistent, industry standard wording can avoid a lawsuit. This helps the homeowner understand a home inspector’s opinion of the condition of the home. A signed and dated agreement and discussions with the homeowner can also shield a home inspector from legal action. Pictures are a great way to document the condition of a home during the inspection. They can be a permanent part of an inspection report, and are an excellent representation of a home’s condition at the time of the inspection.

Homeowners must realize that some problems cannot be recognized at the time of a home inspection. For example, if moisture and leakage occur in a basement only during heavy rains or thaws, an inspector could not detect this during a dry period. Home inspectors give a visual examination, and they do not take apart systems, nor do they remove carpeting or furniture. They do not perform invasive or destructive tests because a home inspector is a generalist, and their job is to give an overall assessment of the condition of a home.

Unfortunately, if a homeowner does not understand this, they can hold the inspector responsible. Home inspector insurance is necessary to protect a business in these situations. Home inspectors should itemize what is not included in a home inspection to help the homeowner fully understand the service provided, and to know what to expect, and what not to expect. Communicating with the customer on all levels always enhances understanding, and could avoid conflicts.

Grace Enderlein is a freelance writer and editor. “Protecting a Home Inspector with Proactive Measures and Home Inspector Insurance” notes what a home inspector can do to protect themselves from legal action. Eiipro.com offers competitive, cost effective home inspector insurance

 

Tasks of a Home Inspector and Why They Need Errors and Omissions Insurance

Homeowners or potential home buyers are very passionate about their properties.  Why wouldn’t they be?  For most, a house is the largest investment that will be made in their lifetime.  When a home inspector is hired, the homeowner wants the overall condition of the property evaluated, and the home inspection results are a key factor in the sales transaction.  This can leave the Home Inspector in a vulnerable position since the results and the accuracy of the inspection are of great interest to the buyer and seller.

What are the responsibilities of a Home Inspector?  Home inspection is a visual examination of a property, scrutinizing major systems like electrical and plumbing, and also the structural condition of the dwelling.  A material defect is a deficiency in a system or structure of a property that could have an adverse impact on the value of the property.  A Home Inspector looks for defects, and will examine the following systems and areas of a home:  roof, exterior, basement, foundation, crawlspace, heating, cooling, plumbing, electric, fireplace, attic, ventilation, insulation, doors and windows.  They will give a general inspection, and operate systems to see if they are in functioning order.  For example, they will activate the heating and cooling system noting if they are in working order, and run the faucets and showers to observe their functionality.

All of these systems are critical to the normal function of a home, and it is the job of the Home Inspector to give a general diagnosis on how well they are functioning.  When a problem occurs in a house at a later date, even if there was not a way to anticipate the issue, a Home Inspector can be held accountable.  This is a frequent occurrence, and this is why it is necessary for a Home Inspector to have Errors and Omissions insurance.   Owners have invested large sums of money into their homes, so some may look for a way to make up for their loss.

Errors and Omissions insurance protect a Home Inspector from dramatic financial loss should they be the target of legal action?  Many times the Home Inspector is not at fault, but they are sued anyway and costly legal fees are incurred.  However; sometimes due to an oversight or mistake, a Home Inspector is accountable.  Either way, the litigation can be crippling for a small business, and Errors and Omissions insurance will protect the company, its employees, owners and even contractors.  Home Inspectors are indispensable in a real estate transaction, but they should always be protected with Errors and Omissions insurance to shield themselves and their business.

Grace Enderlein is a freelance writer and editor.  “Tasks of a Home Inspector and Why They Need Errors and Omissions Insurance” outlines the general responsibilities of a Home Inspector and how they can be held liable.  Eiipro.com offers competitive, cost effective Errors and Omissions Insurance for Home Inspectors.

 

How Appraisers and Home Inspectors are Protected with Errors and Omissions Insurance

Home Appraisers and Home Inspectors are important and necessary experts in real estate transactions, but their roles are quite different. Appraisers determine the value of a property, and this information is also used in the estimation of homeowners insurance and real estate taxes. Appraisers inspect a home, its property, amenities and upgrades, and also research other local properties and their values to determine what a home is worth.

Home Inspectors are not Appraisers. Home Inspectors look for defects in a home, or problems which could lead to future repairs for the homeowner. They look for structural problems, in addition to electrical, plumbing, heating and cooling issues that indicate immediate repair needs, or potential future problems. Both fields are vulnerable to law suits, and need to be covered by Appraiser E&O Insurance and Home Inspector E&O Insurance to protect their businesses.

If a lender or buyer has a financial loss that they believe was caused by negligence on the part of the Appraiser, they can sue. Appraiser E&O insurance will protect Appraisers from large financial losses from settlements and legal fees. Even if the Appraiser is not at fault, they can be held responsible. They are especially vulnerable in a volatile economy when values plummet, and attempts are made by owners to regain losses from decreased property values.

Home Inspector E&O insurance is critical for protecting Inspectors because of the nature of their business. If something goes wrong in a home, the homeowner may quickly blame a Home Inspector for not recognizing the potential problem. Home Inspectors may not have been able to foresee a fault in a home despite a thorough inspection, but still be sued by the homeowner. Errors and Omissions insurance can protect the Home Inspector business and its employees from monetary loss.

If an Appraiser or Home Inspector is held responsible for mistakes or oversights, it is essential protection to have coverage with Errors and Omissions insurance. It is even a requirement in some states to have this type of insurance for Home Inspectors and Appraisers, and it guards the business, its owners, employees and subcontractors from losses.

Grace Enderlein is a freelance writer and editor. “How Appraisers and Home Inspectors are Protected with Errors and Omissions Insurance” notes the importance of this insurance product to defend these types of businesses.Eiipro.com is a provider of E&O insurance for Home Inspectors and Appraisers.

 

Errors and Omissions Insurance for the Real Estate Business

There are risks involved in the real estate business that can leave an agency and its employees vulnerable to liability; therefore, Errors and Omissions Insurance is a necessity in the real estate business. A mistake in judgment, negligence, or the exclusion of important facts about a property can lead to litigation and potentially the loss of a business if it is not covered by Errors and Omissions Insurance. There are choices and flexibility when choosing what kind of coverage options to choose, and a range of premiums.

The coverage, premiums, limits and deductibles for E & O insurance will be determined by commission income, number of people being covered, and how often transactions are conducted in a real estate business. In addition to residential real estate agents and firms, commercial brokers and rental agents also need Errors and Omissions Insurance. Their coverage and premiums will vary depending on these categories of the business and where their possible risks lie.

Some of the areas that Errors and Omissions Insurance protects from are defense costs, loss of earnings, and personal injury. Optional coverage for fair housing and discrimination, environmental hazards, and radon are also available and relevant to the real estate industry. An E & O contract needs to be customized and include the dollar amount for each liability, a deductible amount for each liability and defense costs, an explanation of the policy services the company provides, and retroactive dates for claims.

Typically, commercial General Liability insurance policies do not cover many types of claims, and Errors and Omissions Insurance can cover W-2 employees as well as subcontractors.Errors and Omissions Insurance is also known as professional liability insurance, malpractice insurance, or directors and officers (D & O) insurance.

There are many companies now offering Errors and Omissions Insurance for the real estate business as well as home inspectors and other service companies. Being prepared for inevitable mistakes that can be made by employees and contractors with E & O insurance companies can save a real estate business from significant financial losses.

Grace Enderlein is a freelance writer and editor. “Errors and Omissions Insurance for the Real Estate Business” notes the importance of protecting a business from financial losses from litigation with E & O insurance from Eiipro.com.