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I believe everyone has their horror stories about inspectors who have caused contract problems. that being said, when you select and inspector that has E & O insurance, you have a better chance of a good inspection.

I would definitely agree with you.

Russel,
I am surprised that you agree with that. E&O insurance has absolutely nothing to do with whether or not the inspector is competent. E&O only serves to protect the incompetent. The same protection can be achieved with a thorough inspection. And to give the realtor peace of mind a "hold harmless" clause should be included in the contract.

Since I am human, there is always the possibility that even my most thorough home inspection will have an error or omission, perhaps from something as simple as leaving a default paragaph in the report when it has no bearing on the property.

My E&O insurance with Realtor Indemnity protects everyone involved--me, Client, and Realtor. As I like to tell my Clients, my E&O insurance protects both you from me and me from me.

Perhaps if I were working in South Texas where I grew up, I might believe diffeently. But here in San Diego, where a 640 SF shack in a bad part of town on 641 SF of land goes for $500,000, I really don't believe that my million/million E&O policy is adequate. Unfortunately, that's the maximum I've been able to find.

Since I do several $5-$10 million mansions each year, I would carry $5 million/$10 million E&O insurance if it were offered.

Where I work, I consider one to be a poor businessperson if one is working in the home inspection industry without E&O insurance, GL insurance, ADD insurance, life insurance, and workers' comp insurance. Just my own business protocols.

I also use my insurance as a marketing advantage against my competition. Insurance is not expensive, and since I'm not the least expensive home inspector, I don't mind telling my Clients, many of whom are price shopping (and I don't have any problem with price shoppers--I'm a home inspector working with all people), why I carry insurance and how that overhead affects my prices. I have never lost a price shopper once I explain insurance.

I also personally don't believe that it is the thorough inspection that will keep one out of court and, ergo, prevent use of one's E&O insurance. I believe education is much more important than the actual inspection results or report itself.

Russel- I agree that everyone makes mistakes. I use to carry E&O insurance but now I do not. Where you are at it probably is a good business decision. Where I am at it is not. If you have been in the profession very long you know that this has been a continuing debate among inspectors for years. My area is saturated with ambulance chasing lawyers and E&O is a bullseye that says "Look at me, I have deep pockets"! I have lost a couple of inspections because of this. But since I do not rely on referals for my inspections (all of my inspections are from word of mouth from past clients)it doesn't matter in my case as far as marketing. If an agent has a problem with it I explain that I have a hold harmless clause in my contract that protects all parties not associated with the inspection company from any E&O's. Once I explain this they usually don't have a problem with it.

Hold harmless clauses generally don't work unless all parties sign the contract holding all parties harmless. That generally isn't done. Too many courts have ruled that Party A (in this case, Buyer) and Party B (in this case, Inspector) cannot agree to hold harmless Party C (in this case, Realtor) unless Party C is a party to the contract, which they never are here in San Diego. That's the reason for buying E&O insurance with a Realtor Indemnity clause.

I really find that hard to understand that people do choose uncertified and uninsured Inspectors to do the inspection to try and save $50-00.




Thomson Alliance

Home Inspectors Inspection Hawaii, Oahu
http://www.thomsonalliance.com
http://www.myspace.com/hawaiihomeinspector