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When you work as a home inspector, there are many risks that could affect your business, from accidental property damage or bodily injury to professional liability lawsuits. Clients rely on you to provide them with accurate information about the homes you inspect; if they believe your inspection was negligent, they could sue your business. Purchasing a comprehensive range of business insurance can provide financial protection from a variety of hazards.
What insurance coverage do I need as a home inspector?
There are many types of insurance coverage to consider, but these policies are particularly relevant to home inspectors:
General Liability Insurance
General liability insurance covers incidents of accidental third-party property damage, bodily injury, personal injury, and advertising injury. Since home inspectors regularly visit other people’s homes, there is always a possibility that they might accidentally damage someone else’s property or cause an injury in the course of their work. If this happens, your company could be sued.
General liability insurance can provide financial protection if your company is held liable for an incident. General liability insurance also includes a personal and advertising injury component, which can cover third-party non-physical injuries and reputational damage from libel, slander, copyright infringement, and more.
- Bodily injury: One of your home inspectors places a ladder next to a wall to inspect a building’s roof. When the homeowner walks by, the ladder falls and hits her, causing a head injury. General liability insurance would cover medical costs and legal fees if the homeowner sues.
- Property damage: While inspecting a home that is still occupied, a home inspector knocks over a valuable vase, shattering it. General liability insurance would cover the damages.
- Personal and advertising injury: Your home inspection business creates a new advertising campaign using a photo of beautiful homes on a lake. Unfortunately, the image you used is actually copyrighted by the photographer, who sues your company for not securing the right permissions. General liability insurance would provide coverage for the lawsuit.
Professional Liability Insurance
Professional liability insurance provides financial protection if clients accuse you of negligence, failures, or mistakes in your professional work or advice. Clients rely on home inspectors as a key part of their home-buying process, and they could sue your firm if they believe you were negligent in your work, misrepresented your services, or violated a good faith agreement. Even if you are not at fault, defending a lawsuit can be costly and time-consuming. Professional liability insurance can step in to pay for your legal fees and any resulting settlements or judgments against you.
Additionally, professional liability insurance for home inspectors typically includes coverage for third-party bodily injury and property damage caused by your professional services. A common misconception is that this type of injury is covered by a general liability policy; however, most general liability policies come with endorsements that specifically exclude professional services from property damage and bodily injury coverage. If a mistake or omission in a home inspection results in a homeowner getting injured or property being damaged, professional liability insurance can provide coverage.
- You recently completed a home inspection for your brother-in-law who is the home’s selling agent. The house sells quickly, and the new homeowners discover that the house’s basement is severely affected by black mold, which was not listed in your inspection report. The homeowners accuse you of conspiring with the selling agent and failing to disclose your family relationship. They sue your business for damages. Your professional liability insurance would cover the lawsuit and any resulting settlements.
Commercial Property Insurance
Commercial property insurance covers the value of your business’s property, including owned or rented office space, furniture, office supplies, tools, equipment, and other business items. If your business operates from commercial office space, you’ll likely need this coverage. Commercial property insurance can provide funds to replace or repair damaged property in the event of a fire, storm, explosion, or other covered peril.
Commercial property insurance covers the following:
- Buildings belonging to or leased by your company
- Contents of the building, including equipment, office furniture, and tools
- Property of others while it is under your care, custody, or control
- A severe storm damages the roof of your home inspection company’s offices. Your commercial property insurance would cover the costs of repairs.
Inland Marine Insurance
Inland marine insurance provides financial protection for your business property that does not remain at a fixed location and is not covered by a standard commercial property policy. This could include equipment, tools, and other items. This is an important coverage to consider if your home inspection services rely on valuable equipment you transport from location to location, such as cameras or radon detectors. Inland marine insurance will protect your property no matter where it is.
- One of your employees is at a client’s home performing an inspection, and he accidentally drops a commercial radon detector, severely damaging it. Inland marine insurance would cover the loss.
Commercial Auto Insurance
Since home inspectors drive from house to house to perform inspections, it’s important to make sure that you have adequate auto insurance coverage. If your business owns or leases vehicles, commercial auto insurance is a key coverage that is legally required in most states. If your employees are involved in a car crash, commercial auto insurance can provide coverage for physical damage to vehicles, third-party bodily injury, and property damage. Commercial auto insurance can also provide coverage for damage to your vehicles caused by covered perils, including theft, falling objects, fire, and more.
If your employees drive their own vehicles for work purposes, their personal auto insurance may not be sufficient to cover any claims if they’re at fault in an accident while on the job, and your company could be held liable. Hired and non-owned auto insurance will cover these incidents. It can be added as an endorsement to a commercial auto, general liability, or business owner’s policy or purchased separately.
- While driving to a home to perform an inspection, one of your employees changes lanes and collides with a bicyclist. The bicyclist suffers a broken arm and requires medical attention. Your commercial auto insurance would provide funds to cover the bicyclist’s medical costs and any legal expenses if your business is sued.
Business Owner’s Policy
For qualified small and midsize home inspection companies, a business owner’s policy (BOP) may be a good way to purchase a wide range of coverage in one convenient bundle. A business owner’s policy provides coverage for key property and liability risks that most businesses face, including general liability, commercial property, business income, and extra expense coverage. Buying a business owner’s policy can help you save money on premiums, as the cost is typically lower than purchasing each coverage separately.
- Workers’ compensation insurance is legally required for companies with employees in most states. It covers the medical expenses and lost income of employees who are injured or fall ill while working.
- Business income insurance will reimburse you for lost income and operating expenses if your business is temporarily unable to operate due to a covered reason, such as fire, storm damage, or other property damage.
- Commercial crime insurance provides funds to reimburse you for losses caused by theft, robbery, fraud, forgery, burglary, and other crimes committed by outside parties or your own employees.
Pricing and Quotes
Pricing for home inspectors insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:
- Business size
- Number of employees
- Claims history
Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a home inspection business with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.
In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for home inspectors:
|Provider||General Liability||Professional Liability||Business Owner's Policy|
When you work as a home inspector, it’s important to prepare your company for the risks you could face. No matter how expert and meticulous you and your employees are, there’s always a possibility that you could make a mistake or cause property damage or injury. Clients could also sue you for perceived errors even if you have done nothing wrong. In addition to professional errors, your business could be affected by common hazards that most businesses are subject to, such as fires or accidents. Securing a wide range of insurance coverage will ensure that if a catastrophe occurs, your company will be financially protected.