Does anyone know of E & O insurance that does NOT require a pre inspection agreement.

No, and why would you want to work without an agreement?

1. Never have used one.
2. From what I have heard/read they are a waste of time/effort and a pain in the ass to get signed in some instances.
3. A few thousand inspections and no problems.
4. Current procedure - call from client, do inspection, get paid. - end of story.
5. I think they are bullshit and useless. The only way I want to use one is if it is mandated by law, and only then if I decide to continue doing HIs.
I don't have to do a damned thing, except play golf, but, I enjoy doing inspections.
6. If I find a way not to use them, I will do that.

Almost no insurance carrier is going to insure you without a signed agreement. You're playing with fire by not using one regardless of how many inspections you've done with no issue.

The purpose of is to clearly explain the scope of your inspection but also explain what your inspection ISN'T. And it's your first line of defense in the event that you get sued.

Everyone these days has email and/or a fax machine.

If I stay in this and if I get the Ins., the agreement will have to come from the insurance carrier. I will not play the game of them excluding coverage of an incident because my agreement had a flaw. They will provide it or preapprove one.

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The only reason some people get lost in thought is because it's unfamiliar territory.
- Paul Fix

I haven't heard of one. If you have never had and don't anticipate any problems, why look for insurance?

We require that all inspectors submit a copy of their Pre-Inspection Agreement with the application for insurance. If we see any glaring issues, then we will make suggestions. A PIA is something you and your attorney should draft up, not the insurance company.

For the same reasons people carry health insurance, life insurance, disability insurance, etc., etc.

I don't anticipate any health problems, but unfortunately I'm not able to predict the future and therefore make the intelligent decision to protect myself from going bankrupt in the event that I encounter any health issues.

Don't take this personally, Ben. I'm sure you're a perfectly decent human being.

The audacity of the insurance industry goes beyond anything I could possibly express. The only reason your company or any other insurance company wouldn't draft a preapproved agreement, industry specific, State specific, is that then there would be no opportunity to dispute its validity later.

I'm so sick of the power team of insurance and trial attorneys in this Country that I could just barf. You have created a Nation of fear and my generation has allowed it. What a legacy for my children. I am ashamed.

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The only reason some people get lost in thought is because it's unfamiliar territory.
- Paul Fix

I changed to BRP "Business Risk Partners" (better coverage at a lower price) from FREA this year when FREA made their bed with Nicks & his CMI club, they did not ask for one.

I really don't know if they require one or not. My state requires it, so it does not impact me anyway.

Truth be known, when it comes to the point that you screwed up a contract won't save your butt. It might help to deflect some of the crap before it hits the fan, but that is about all they will do. Three weeks ago I watched a judge toss out a contract on a trial that I was an EW on trying to defend a home inspector. Case was settled three hours later!

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Scott Patterson
Spring Hill, TN
http://www.traceinspections.com

Ben, my comment was somewhat tongue in cheek. It seems like a person would have an inspection agreement whether or not they thought about getting insurance. For a guarantee of payment if nothing else.

I have to say, the link that appears every time I type "insurance" is realy irritating.

Hey Scott,

How will BRP know when you have made a mistake if they haven't seen your PIA? How will they know when to trigger coverage? I'm interested in knowing, not judging your choice of carriers. All of the carriers I work with require a PIA and they review it prior to issuing the insurance.

Most carriers include the PIA as part of your file when they issue your insurance, it is what they have to use to judge whether coverage applies.

[quote=Thom Walker;16492]

The only reason your company or any other insurance company wouldn't draft a preapproved agreement, industry specific, State specific, is that then there would be no opportunity to dispute its validity later.

QUOTE]

Thom,
I think insurance companies don't issue agreements because they don't know what HIs do. It's better that HIs and their associations draw up the agreements and the insurance company chooses to insure you when or if you fail to perform those duties in your own agreement.

Have not seen this posted before, but has anyone been flat out denied coverage by their carrier?

[quote=Kevin Healy;16565]I agree with Kevin. Using an association endorsed PIA is probably the best route to take.

Thom, I don't take it personally as I don't think you're taking a shot at my character as a person. I'm not so sure the insurance companies are to blame as much as the lawyers. This goes for alot of different industries. Sue happy attorneys and frivilous lawsuits are a detriment to insurance premiums.

Ben, but aren't the in-sur-ance providers equally to blame. These folks (the carriers) are so running scared at the prospect of litigation that the carriers will settle--EVEN IF THE INSPECTOR HAS DONE NOTHING WRONG!!!

Now, that's just wrong!!

When E&O becomes mandatory, the ONLY folks who benefit from it are the (see photo):

Attached Images

MY_LEGAL-STAFF.jpg (66.9 KB, 36 views)

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"If con is the opposite of pro, is Congress the opposite of progress?"
Richard Rushing, HCRI
Duncanville, Tx.

"are so running scared at the prospect of litigation that the carriers will settle"

Here is a little case study that we performed in our office.
HI performs a perfect Home Inspection, but he is still sued for $10,000 to repair.
Hi informs his E&O Carrier. If Carrier Settles, as they currently do, the total expense paid will be about $13-15,000, to pay for all the lawyer fees and adjusters and the claimants lawyer fees. That is just the cost to issue the paperwork to settle.
If they litigate- (Carriers Cost) at 350-400/hr for a Lawyer, Claims Adjuster 120-200/hr, Expert Witnesses 75-125/Hr, plus documentation fees, Court/Arbitration Costs ($1000-2500).
2 Days Prep for Arbitration 16Hrs- Lawyer- $5600
2 Days claims adjusting- $2400
2 Days EW at trial and prep - $1200
Arbitration Fees(usually paid by defendant) - $1500
Minimum Total - $10,700
Remember they only collected $2500 in premium from the Home Inspector.
and they might lose and still have to pay equal costs to the defense counsel and the $10,000 claim.

And this was as cheap as we could get it. It's better to settle and minimize the risk of losing, Ironicly, settling claims keeps your premium lower.

In the eyes of an insurance carrier, spending $30,000 to prove that you have done nothing wrong is not a financially good move when they can settle for $1,500. Is it fair? Depends on who you ask I guess. I think it's safe to say that if the insurance carrier went to trial with every claim that was filed, the rates would be astronomical.

I am using arbitrary numbers above and I'm not saying I agree with what the insurance company does. Keep in mind, I work for an Association which provides E&O as a membership benefit. And this is an issue that ALL insurance providers deal with, not just FREA's carrier.

Having a pre inspection agreement is not going to tell the carrier if you make a mistake. You, the insured have to tell them when you screw up and are called on the rug for doing it. This is when they get involved.

How many do you work with? My state requires a pre inspection agreement, this could be why BRP did not ask me about it.

Yes, it is used as a tool to keep from paying out. They all want the limit of liability clause, and this is a joke. The limit of liability clause is not allowed in many states. It has been defeated many, many times in the past few years.

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Scott Patterson
Spring Hill, TN
http://www.traceinspections.com