Insurance for Home Inspectors
Home inspectors provide non-invasive dwelling inspections to identify deficiencies. The inspection is often a final condition of a home purchase, and may be requested by the lender, the real estate agent, or the prospective buyer. Insurers may also request a home inspection. After the inspection is completed, a report is prepared for the client with details and recommendations for remediation or correction. The inspector does not warranty the work or offer advice on the purchase of the home.
The inspection is visual only. The inspector is not required to enter closed areas, walk on the roof, or enter an attic or a crawl space. Regulation of inspectors, required certification, and educational requirements vary by state. Three major associations encourage professional ethics and standards of practice. Inspectors can belong to one or more of these associations.
Recommended Insurance Programs for Home Inspection Services
Minimum recommended coverage:
• General Liability
• Professional Liability
• Inland Marine
• Hired and Non-Owned Auto (full commercial auto if vehicles owned)
• Umbrella Coverage
• Workers’ Compensation
Other coverages to consider for Home Inspection:
Computers, Contractors Equipment (Inland Marine), Valuable Papers and Records, Employee Benefits Liability, Business Automobile Liability and Physical Damage, Building, Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Employment Practices Liability Insurance.
Common Risks and Needs Associated with Home Inspectors
General Liability Insurance
Premises GL liability exposures are almost entirely off premises and conducted at the site of the home being inspected. Hazards include property damage, theft and perhaps invasion of privacy. Guidelines and procedures must be established concerning appropriate behavior. Customer complaints should be dealt with promptly and decisively.
Professional liability Insurance
Professional liability exposures are generally light as the contracts for inspection services stipulate that inspections and reports are not warranted and are based on visual inspection only. The agreement used by the Home Inspector is part of the underwriting process. One area of concern is inappropriate and undisclosed business relationships with real estate agents that could lead to allegations of impropriety and nonobjective findings.
Property exposures are generally limited to those of an office, although there may be some incidental storage or an area for meetings. Hazards arise from the considerable storage of property valuation documentation, diagrams, photos and similar records, although these are now often digital instead of paper format.
Automobile exposures arise from the vehicles driven to inspection locations. These are usually vans or pickups that can transport the inspector’s equipment. Personal use and use by family members have to be considered since many of these operations are one or two person businesses doing business from an office in their homes. The age, training, experience, and records of each driver, as well as age, condition, and maintenance of the vehicles, are all important items to consider.
Inland Marine Coverage
Inland marine exposures are from computers, contractors’ equipment, and valuable papers and records. Inspectors’ primary equipment consists of a camera, clipboard, and measuring wheel, but may include ladders, flashlights, and specialized testing equipment, such as radon detectors. Some may also carry their computers with them to record their observations and findings as they walk through the property. Client reports and contracts represent the inspector’s primary valuable papers and records exposures. While most inspectors require payment at the time of the service, other arrangements may involve billing real estate agents.
Workers compensation risks arise from site work, where hazards may involve climbing on ladders and working on uneven terrain in unfamiliar environments. Trips and falls are common, and the inspector may be attacked by unrestrained animals while performing the home inspection. Since inspectors often work alone, injuries may go unnoticed, which can lead to delayed response and delayed first aid. In the office, ergonomic concerns include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations.
Liability Quotes for Home Inspectors
General Liability Shop.com offers affordable liability insurance quotes for Home Inspectors throughout the U.S. Our Home Inspection programs include all lines of business insurance, as well as our Target programs for business owners policies (BOP). Contact one of our business insurance Specialists today at (800) 900-8657, or start a quote online now.
Our Top Carrier Solutions for Home Inspectors
Home Inspection Liability Classification Codes
Commercial insurance companies use various liability classification systems in order to classify and rate coverage premiums for Home Inspectors. Here are the most common business insurance classification for Home Inspection:
Business Liability Category: Service Industry
SIC Business Insurance Codes:
• 7389- Business Services- Home Inspection
NAICS Liability Classifications:
• 541350- Building Inspection Services
Business ISO General Liability:
• Code: 96317- Inspection and Appraisal Companies
Common Workers Compensation Class Codes:
• 8720- Building Inspection of Risk and Valuation
• 8721- Real Estate Appraisal Company- Outside Employee