What Insurance Do You Need for Home Inspecting
Errors and Omissions insurance protects home inspectors from costly claims and legal defense expenses when issues arise after an inspection. As home prices rise, proper E&O
Why Errors and Omissions Insurance Matters for Home Inspectors
As a home inspector, your business is built on trust, accuracy, and professional judgment. Every inspection involves evaluating complex systems like roofing, electrical, plumbing, HVAC, and structure, often within a limited time window. Even when an inspection is performed carefully and according to standards of practice, claims can still happen. Errors and Omissions insurance, often referred to as professional liability insurance, exists to protect inspectors when a client alleges that something was missed or improperly reported.
According to insurance industry data, professional liability claims are not rare in the home inspection field. Studies consistently show that between 1 percent and 3 percent of inspections result in a claim or demand letter at some point. While many claims never reach court, the cost to defend even a minor allegation can easily exceed $10,000 to $25,000 in legal fees alone. More serious claims involving structural issues, water intrusion, or foundation problems can result in settlements or judgments well into the six figures. E&O insurance helps cover both defense costs and damages, protecting inspectors from a single claim wiping out years of work.
What Errors and Omissions Insurance Covers
Errors and Omissions insurance is designed to respond when a client claims financial loss due to your professional services. Common scenarios include allegations that an inspector failed to identify roof leaks, electrical defects, plumbing issues, water intrusion, or structural concerns. It also applies to claims of negligence or failure to follow accepted inspection standards. Importantly, E&O insurance typically covers legal defense costs even if the claim is ultimately found to be without merit. This is critical, as defense costs often represent the largest financial exposure for inspectors.
Industry data shows that most inspection-related claims are not about obvious defects, but rather about conditions that were concealed, intermittent, or developed after the inspection. In many cases, inspectors did nothing wrong but still had to defend their work. E&O insurance exists specifically for these situations.
biBerk Errors and Omissions Insurance for Home Inspectors
biBerk, a Berkshire Hathaway company, offers Errors and Omissions insurance tailored to small businesses, including home inspectors. Their coverage is designed to address the most common professional liability risks inspectors face while remaining affordable and easy to obtain. biBerk operates on a direct-to-customer model, which often results in lower premiums compared to traditional agency-based policies.
For many inspectors, E&O premiums range from a few hundred dollars per year to higher amounts depending on inspection volume, revenue, years of experience, and prior claims history. Considering that a single claim can cost tens of thousands of dollars to defend, the cost of coverage is generally minimal relative to the risk being transferred.
What Errors and Omissions Insurance Does Not Cover
It is important to understand the limits of E&O insurance. It does not cover intentional wrongdoing, fraudulent acts, or criminal behavior. It also does not cover bodily injury or property damage unrelated to professional services, which are typically addressed by general liability insurance. Employee injuries are excluded and require workers’ compensation coverage if you have employees.
Because of these exclusions, most home inspectors carry both Errors and Omissions insurance and general liability insurance. Together, these policies form the foundation of a well-protected inspection business.
Why Insurance Is Becoming More Important for Inspectors
Claims against home inspectors have increased over time as home prices have risen and buyers become more financially exposed. When a home purchase represents a larger investment, clients are more likely to pursue claims if unexpected repairs arise. In addition, modern homes contain more complex systems, and renovations are often completed quickly and poorly, increasing the chance of hidden defects.
From a risk management standpoint, Errors and Omissions insurance is no longer optional for inspectors who want to operate professionally and protect their business long-term. It allows inspectors to focus on performing thorough inspections without the constant fear that a single complaint could jeopardize their livelihood.
Final Thoughts
Errors and Omissions insurance is one of the most important protections a home inspector can carry. Even highly experienced inspectors with solid reporting practices can face claims. The reality is that inspections involve judgment, interpretation, and limitations. E&O insurance acknowledges that reality and provides a financial safety net when disputes arise.
For inspectors building a sustainable business, carrying proper insurance is not just about compliance or peace of mind. It is about protecting your reputation, your income, and your future in an increasingly litigious housing market.