These are trying times for anyone in a real estate related profession. Of course, Phoenix home inspectors are not immune from the business pressures that exist and a concerning development is occurring that you should be aware of. In order to reduce costs, many home inspectors do not carry insurance for their clients.
Errors & omissions insurance is a critical protective measure that is vitally important for all parties to the real estate transaction. Unfortunately, not all home inspectors carry insurance. The Board of Technical Registration allows an Arizona home inspector to carry nothing more than a $25,000 bond in order to perform home inspections. The only way to collect on a bond, is for the claimant to prevail in a lawsuit and get a judgement before the bonding company will pay. As you likely know, it could cost that much in legal fees just to get the judgement. This can be a disaster for the buyers and for the real estate agents who are also usually a defendant.
Beyond errors & omissions insurance, a quality home inspection company will also carry general liability. General liability insurance covers things like damage to property or injury to occupants caused by the inspector.
“IF YOUR HOME INSPECTOR DOES NOT CARRY ERRORS & OMISSIONS AND GENERAL LIABILITY INSURANCE YOU ARE TAKING AN ENORMOUS RISK”
The best insurance coverage provides one more important element. It covers referring real estate agents and brokers against wrongful acts by the home inspector. That means even if you recommend a specific inspection company you are covered under the inspection company policy for his or her negligent actions. This helps alleviate the concern about having to recommend more than one firm. If you have a great home inspection company and they have this coverage, you can recommend them with confidence.
The bottom line is: check out your Arizona home inspector before hiring by asking insurance related questions. Call us if you have any questions or to give us a try. Of course, as it relates to insurance we carry the good stuff including errors & omissions, general liability and referring agent/broker coverage.