Buying insurance is a highly necessary step in building your own home inspection business. Less fun than designing your company logo and less interesting than training for your home inspection license, the process is anything but exciting. Still, home inspector insurance is a vital resource you simply can’t operate without. Resist the urge to shrug off this important item off of your to-do list and allow us to guide you through the essentials:
The Two Kinds of Coverage
Insurance companies will throw all sorts of policies your way to try and convince you to buy more coverage than necessary. While more coverage never hurts, most home inspectors need only two main types: Errors and Omissions insurance and General Liability insurance.
Errors and Omissions, also known as E&O coverage, comes in two forms. Claims Made policies require the insurance company to pay for any claims that are reported while the policy is in effect. Occurrence policies, on the other hand, require the insurance company to pay for events occurring while a policy is in effect regardless of when you report the event. Naturally, Claims Made policies are more affordable, making it the more popular home inspector insurance option.
General Liability insurance, commonly known as GL coverage, comes in two forms as well. Bodily injury coverage is helpful when an alleged mistake or oversight on your part results in someone being injured or harmed. Property damage insurance, on the other hand, covers the damage done to a property following alleged inspection reports errors.
Both E&O and GL coverage are worth investing in when shopping for home inspector insurance. Be sure to discuss both options with your insurance agent before deciding how you’ll spend your budget.
Questions for Your Insurance Agent
As you shop around for coverage, it’s important to know what you’re looking for and how much you’re hoping to spend. Thankfully, you don’t need to become an expert in order to get quality insurance coverage. Keep the following questions in mind as you meet with insurance agents about your options:
- Is property damage covered by my policy? If you overlook signs of mold growth in the basement, for example, you may be required to cover costs associated with removal. Factor leaky roofs, torn carpets, and any other defect oversights into your discussion of potential property damage claims.
- Is temporary use of the home coverage included? Should you miss an important structural defect, your clients may need to relocate to a hotel while repair work is done. Temporary use of the home should be covered by your home inspector insurance policy.
- What does your policy say about bodily injury? Will your policy cover costs related to the homeowner’s healthcare if you’re sued?
- What if I break something during a home inspection? Routine operation of a home’s systems may sometimes lead to mistakes and accidents during the inspection process. Make sure your new home inspector general liability policy has you covered.
While these aren’t the only questions worth asking your insurance agent, they’re a good way to contextualize many of the most common kinds of home inspector insurance claims.
A Word About Pricing
Bargain lovers will be accustomed to shopping for rock bottom rates, but opting for the cheapest coverage available isn’t always the smartest use of your money. Insurance coverage can run the gamut, allowing home inspectors to pay almost any price point they’d like for a policy. Unfortunately, though, you get what you pay for – skimping on coverage may save you a few bucks in the short run, but could leave you high and dry when you need it most.
Generally speaking, the lower a policy’s cost, the more exclusions you can expect. While it’s always worth your time to shop around and ask as many questions as possible about your coverage, you can usually chalk low prices up to minimal coverage. New business owners may be tempted to cut corners when starting their companies, but doing so is almost never worth the risk.
Your Home Inspection Questions Answered
Starting a business takes serious experience, knowledge and resources. If you’re thinking of launching a new home inspection company but have questions about the industry, ICA School can help. Our teachers have thousands of home inspections under their collective belts and offer first-hand insight to current and former ICA School students alike. Their mentorship is just one of the many perks of enrolling in our online home inspection training course.
Whether you’re brand new to the field or have been working in the industry for years, ICA School resources are an incredible investment. Don’t take our word for it, though: click here to see what actual ICA School students have to say about our offerings!