With the current recession coming to a close, economists are predicting an 11% sales increase of new and existing homes, as well as an overall stabilization of home pricing. It’s expected that home sales will pick up significantly mid-winter (after Super Bowl Sunday) and home prices will become stable next year, with a median resale price of $170,800. The housing market has experienced an annual 23.3% increase, recording the largest seen in 30 years. Due to the anticipated increase in home sales, professional home inspectors will be needed to perform additional inspections. E&O Insurance can provide important coverage for all of the increasing complexities of real estate transactions, especially in light of the growth in home sales.


The rising usage of litigation has prompted a need for Errors and Omissions Insurance (E & O insurance) programs to reduce the risk to Professional Home Inspectors against potential lawsuits. The following items address E&O Insurance, answering many of the questions Home Inspectors may have about how E&O Insurance works and guidelines on what it should include.


For the Professional Home Inspector, E&O Insurance works as a safety net. E&O is a policy that provides coverage from a potential claim arising from professional advice or service all of which Professional Home Inspectors provide. If there is a claim against you for services provided or services you failed to provide that resulted in an error (or omission) that you have made or that a client has perceived you have made you can look to your E&O Insurance to help. E&O Insurance can also cover attorney fees as well as the amount of a settlement if you are found at fault.


Be sure to have the following information written into your E&O Insurance policy:

• Dollar amount for each liability.
• Deductible amount for each liability.
• Deductible amount for defense costs.
• A section explaining what the policy is for: "This policy applies to errors, omissions or negligent acts in the course of providing or failing to provide professional services."
• A section listing the services you provide in as much detail as possible.
• The retroactive date for claims (unless written by an occurrence form).
• E&O Insurance should be your safety net. Consider the consequences; we all make mistakes even when we’re at our best. Professional liability Insurance may not have the coverage you need. The best time to buy E&O is before you need it.