Insurance?

Michael Morehead · 08-13-2012, 10:42 AM

Hello everyone! I am currently in the process of becoming a certified home inpsector in West Virginia. I contacted my insurance company today (State Farm- they handle my home and auto policies) regarding limited liability/errors and ommissions policies. I was informed that they wouldn't be willing to underwrite any such policy until I have at least two years experience in the industry. My state requires the policies be in place prior to becoming a certified inspector, so you can see my dilemma. Would anyone know of an organization who could help this newbie? Any information is greatly appreciated! Thanks so much for your time.

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**Billy Stephens** · 08-13-2012, 12:23 PM

Originally Posted by Michael Morehead

Hello everyone! I am currently in the process of becoming a certified home inpsector in West Virginia. I contacted my insurance company today (State Farm- they handle my home and auto policies) regarding limited liability/errors and ommissions policies. I was informed that they wouldn't be willing to underwrite any such policy until I have at least two years experience in the industry. My state requires the policies be in place prior to becoming a certified inspector, so you can see my dilemma. Would anyone know of an organization who could help this newbie? Any information is greatly appreciated! Thanks so much for your time.

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Welcome Michael,

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**Ken Rowe** · 08-13-2012, 01:07 PM

Michael,

Also check with your State offices. Many times they have companies set up to provide insurance which is required by laws or ordinances. I'm not familiar with your State but here in Minnesota, there's Minnesota Joint Underwriters Association. Basically a State sponsored insurer.

Michael Morehead · 08-13-2012, 01:46 PM

Thank you Billy and Ken for such quick replies! I greatly appreciate the information. I will certainly be calling the state licensing division tomorrow to see if we have a state sponsored insurer. If not, perhaps they can refer me somewhere. I also need to ask if the E&O is even a requirement. Their website only only states general liability insurance.

Thanks again for your help!!!

**Phil Gould** · 08-13-2012, 03:04 PM

Allen Insurance has a program for new inspectors of buying coverage for 10 inspections at a time.

**Mark Fisher** · 08-13-2012, 06:42 PM

It's just liability insurance in WV.

link

**Scott Patterson** · 08-14-2012, 05:23 AM

Originally Posted by Phil Gould

Allen Insurance has a program for new inspectors of buying coverage for 10 inspections at a time.

Most if not all of the licensed states that require E&O will not accept "Pay as You Go" coverage like that. Their laws are written in such a manner that a single policy must be in place from year to year.

Do not go for the lowest price, they are cheaper for a few reasons.... Ya get what you pay for! Many do not help if the home is under construction or if you do speciality inspections. You have to find out what is not covered before you buy!

You might try Capitol Special Risk,
Niccole Barnes,
Phone: (770) 618-2842
Email: nbarnes@csrisks.com

I have my umbrella GL with Shelter Insurance, I also have a smaller GL policy that is part of my E&O package. I would recommend having a standalone GL policy in addition to anything that is part of the E&O. Most also offer a payment plan, where you put down around 25% and pay the rest monthly. You should expect to pay upward of $2500 to $3500 for E&O if you are new. It will be less if you have experience with no claims on your record.

John Remark · 09-02-2012, 10:27 AM

WV Does not have a requirement for E and O only GL ($250,000), as I read it on the ASHI site. Please double check this with your state.

That said, your are much more likely to need the e and o coverage (whether you purchase a policy or self insure) than the GL. I have been running an e and o program since 2006 and we provide GL coverage for 80%-90% of our clients and I have e and o claims to GL claims at a rate of 30-1. Home inspectors work product does not generally leave problems after the fact. I personally believe the HI and the public is better served by and E and O requirement than a GL, but that is not the discussion for this question.

If you want a quote for GL only, I would be happy to run up a quote for you, but I would recommend that you seriously look at getting the e and o as well. It is just smart business to protect your assets and your company.

Good luck on your search.

**David Brauner** · 03-12-2013, 04:07 PM

Hi Guys,

Since you're talking about GL, I wanted to let you know that OREP has expanded its coverage to include General Liability at no additional cost, in its E&O coverage program, in all states. Most other “incidental” coverages are included also, like pest and radon. The minimum premium is $1,250 for $300,000 aggregate limit. We've has been writing insurance for inspectors for 12 years and we also publish Working RE magazine: Working RE Home Inspector Edition/Spring 2013

**Raymond Wand** · 03-14-2013, 10:53 AM

Hi David

Enjoyed reading the Spring Edition of Working RE and earlier editions.

There has been discussion previously and currently on this forum revolving around E&O insurance and who it protects.

I have heard both points of view - it's for the protection of the inspector with opposing opinion that it protects the consumer.

Personally my view its for protection of the inspector from major financial loss.

Would love to hear your views from an insurers point of view on the issue(s).

http://www.inspectionnews.net/home_i...tml#post222405

Thank you.

**Ben Garrison** · 03-15-2013, 03:08 PM

Originally Posted by Raymond Wand

Hi David

Enjoyed reading the Spring Edition of Working RE and earlier editions.

There has been discussion previously and currently on this forum revolving around E&O insurance and who it protects.

I have heard both points of view - it's for the protection of the inspector with opposing opinion that it protects the consumer.

Personally my view its for protection of the inspector from major financial loss.

Would love to hear your views from an insurers point of view on the issue(s).

http://www.inspectionnews.net/home_i...tml#post222405

Thank you.

I think it protects both. Let's face it, inspectors make mistakes and when that happens, E&O and GL insurance can help make their client whole. Inspectors also have a great propensity to hit with meritless lawsuits that could cost them a lot of money in attorney's fees if they are not carrying E&O. In that situation, it protects the assets of the inspector.

**David Brauner** · 03-19-2013, 09:29 AM

Hi Raymond - this is David. Thanks. Yes, I agree, I think insurance protects both the contractor (you) and the consumer. But honestly, when I buy my own E&O insurance, my motivation is not my clients, I guess because I think MY integrity and expertise protects them. My motivation is protecting myself- my family's savings. The average claim costs about $25k to defend- you can purchase $300k of E&O and GL from us (OREP) for about $1,300, which includes most incidental coverages like radon, commercial, act. that protects you from a catastrophic claim- a game ender.

$25k means that one claim might cost you two decade's worth of premium. You could pay for insurance without using it for 20 years, have one problem, and be at a break even. And that $25k is just to defend- if you actually loose.......you could lose everything.

It's protection, it's peace of mind. Yes, everyone makes mistakes and not everyone who you do work for is ethical. Some folks want something for nothing and see an inspection as a way to get it.

My favorite expression is that everyone hates insurance until they need it- then they are so grateful to have it. I hope this helps