Home inspecting is an important job. Your findings influence whether someone buys the house or walks away from the purchase. But with great power comes great responsibility, and sometimes, things go wrong. When such events occur, it’s vital to have adequate insurance coverage to ensure your business can survive the problem. Thankfully, our dedicated team can help you obtain the perfect policy package for you.
In the subsequent sections, you’ll learn everything you need to know about home inspector insurance and our experience helping professionals like you receive coverage.
Business Insurance for Home Inspectors in Canada
As a home inspector, you play a significant role in the purchase of any home. Whether somebody is a first-time buyer or already high up on the property ladder, home inspections are always recommended.
But even though spotting elements of damage or degradation in houses is your second nature, there are times when you accidentally miss elements. Unfortunately, these mistakes can cost home buyers thousands upon thousands of dollars. Not to mention the other risks involved with your profession like property damage or bodily injury!
So, to keep you, your business, and your clients safe, acquiring a home inspector insurance package should be an important aspect of your risk management strategy. Here at LiabilityCover, we understand your business offers bespoke services, and it’s our mission to ensure you gain access to the best tailored insurance policies.
What Is Home Inspector Insurance Coverage?
Home inspector insurance is a comprehensive policy package that protects you against the bespoke risks of your profession.
Generally speaking, these bundles include errors and omissions and commercial general liability policies that protect you from third-party liability, property damage, and bodily injury claims. Additionally, alleged misconduct, negligence, and mistakes are covered too.
Real-World Home Inspector Insurance Claims Scenarios
Find some real-world scenarios below to help illustrate the importance of acquiring adequate home inspector insurance coverage:
Example One: Bodily Injury Claim
Your client stands next to you while you’re considering the durability of a loose-seeming window frame. During your examination, the solid blind attached to the frame falls and hits your client on their head.
They decide to sue you for bodily injury. The claim is successful, but luckily, your commercial general liability insurance covers the medical bills totalling $8,000.
Example Two: Professional Negligence Claim
While inspecting a property, you don’t realize the furnace is over 15 years old. Instead, you identify it as being just five years old.
The client proceeds to buy the house. Unfortunately, they find out they need to purchase a new furnace, otherwise, their home insurance won’t cover them. Of course, this is an unexpected expense, so they successfully sue you for professional negligence.
Thankfully, your errors and omissions insurance covers the legal fees associated with the case, costing $25,000.
Example Three: Property Damage Claim
You are inspecting a wall for moisture damage. While inspecting, you accidentally knock the homeowner’s 7f-inch flatscreen TV off its wall bracket. The TV falls and breaks beyond repair.
The homeowner sues you for property damage. Fortunately, your commercial general liability insurance covers the cost of replacing the $6,000 television.
What Does Home Inspector Insurance Cover?
To ensure sufficient protection against the risks you may face as a home inspector, you should purchase an insurance package that contains the following policies:
Errors and omissions insurance, otherwise known as professional liability insurance, protects you against clients’ allegations they’ve suffered financial losses due to your service. The coverage protects you from a variety of accusations, including negligence, failing to deliver a service as advertised, and misconduct.
Consider this example to understand how errors and omissions insurance can help your business stay alive in tricky times:
You inspected your client’s potential new home and stated the roof was in perfect condition. Thanks to your findings, they went ahead with the sale.
However, it came to light that you’d overlooked a part of the roof suffering from significant damage. The damage is so bad that it would’ve deterred them from completing the sale.
Because of your omission, your client sues you for failing to accurately state the roof’s quality. Thankfully, your errors and omissions insurance covers the associated legal fees.
More often than not, you’re visiting other people’s houses in which accidents can occur. Commercial general liability (CGL) insurance policies protect your home inspection business from claims arising from third-party bodily injury or property damage.
Consider this example where commercial general liability insurance saves the day:
You are conducting a home inspection. While trying to look at the furnace’s service record tag, you accidentally damage the pipe.
As you expect, the homeowner sues you for property damage. Luckily, your commercial general liability insurance covers the cost to replace the furnace as well as the case’s legal fees.
While no province mandates commercial property insurance, it’s still a worthwhile investment since it protects your business’ building and its contents from insured events, including vandalism, fire, and theft.
It’s important to note that home insurance policies won’t cover business-related damage. Therefore, you still need to take out a policy if you work from home.
See commercial property insurance in action by looking at the example below:
A pipe in your office bursts. The damage to your office and its equipment is substantial.
You claim on your commercial property insurance and receive the money you need to replace your damaged and destroyed business-related property.
If you share or hold the results of property inspections with your clients on a digital system or in the cloud, cyber liability insurance is critical. The policy covers the financial loss incurred by tech-related risks like cyberattacks.
Here’s an example of how cyber liability insurance could help your home inspection business:
Your private information about various home inspections is infiltrated. The hacker is now using the information as ransom.
Luckily, your cyber liability insurance policy steps in to cover the cost of the ransom and other notification and restoration costs.
Who Needs Home Inspector Insurance Coverage?
Any business or individual professional offering home inspection services (both generalized and specialized) should aim to protect their business with errors and omissions and commercial general liability insurance policies. In some provinces, coverage is required to legally operate as a licensed home inspector.
At LiabilityCover, we’ve worked with a wealth of home inspector specialists and generalists to find them the comprehensive protection they’re searching for. Our range of specialties include:
- Mould inspectors
- Electrical inspectors
- Spa and pool inspectors
- Roofing inspectors
- Sewer and septic system inspectors
- Heating, ventilation, and air conditioning (HVAC) inspectors
- Plumbing inspectors
- Structural or foundation inspectors
- Soil testers and stability inspectors
- Asbestos inspectors
- Chimney inspectors
- Landscaping inspectors
- Indoor air quality inspectors
How Much Does Home Inspector Insurance Coverage Cost?
Every home inspection business is different. So, it’s hard to predict how much you’ll pay for a comprehensive policy package. But, for an average amount, you should anticipate premiums starting at $3,500 per year for a CGL and E;O policy package with a total limit of $1 million.
When figuring out how much you’ll pay, we and the insurer assigned to you consider the following factors:
- Your insurance claims history — If your business has a track record of making consistent insurance claims, you’ll pay a higher premium than businesses with a clean claims history.
- Your annual and projected gross revenue — While a high revenue indicates a successful business, it also means there is much more at stake during a lawsuit. Clients typically request more compensation when they know they’re pursuing legal action against a profitable company. Therefore, insurers must charge you more to make up for the additional risk.
- The number of employees — As your workforce expands, so will your insurance premiums. Why? Because the more people working at a company, the higher the chance of a customer filing a lawsuit against you. Insurers may take your employees’ experience and training into account too. A more experienced workforce could lower your premium payments.
- The types of property inspections you conduct — Some inspection specialisms are riskier than others. If your specialism is one of the more dangerous kinds, you should anticipate spending more on insurance.
- Your years of experience — As you gain experience, your insurance premiums decrease. You stand less chance of being named in a lawsuit with more years of experience since mistakes become a rarity.
- The values of the properties you inspect — The higher the properties’ values, the more expensive your insurance premiums are likely to be.
Why Choose LiabilityCover?
#1 We’re Trusted By Licensed Insurers
We’ve built excellent relationships with the country’s leading licensed brokers and agents, meaning you always get the perfect policy.
#2 We Make Comparing Rates a Breeze
Without insurance expertise, you never truly know if you’re getting a good deal. But with us, there’s no need to worry. Our dedicated agents ensure you get the best rates.
#3 We Find You Coverage Quickly and Easily
Insurance can be a murky world. So, why not let us do the hard work? With our experienced team, you’ll never have to trawl through countless insurers ever again. Just send the short inquiry form to our team, and we’ll connect you to an insurance provider with experience covering home inspectors like you!
Frequently Asked Questions
How Can You Get Home Inspector Insurance in Canada?
Acquiring home inspector insurance doesn’t have to be hard work or complicated. With LiabilityCover, it’s as simple as following the four-step process below:
- Fill in our short online inquiry form.
- We analyze your insurance requirements.
- Our team handpicks the best insurance provider for your company. They’ll have years of experience covering home inspectors in your area.
- Your designated broker or agent contacts you to walk you through the process!
Can You Be Sued As a Home Inspector?
Home inspectors like you have a professional duty to adhere to industry standards. Potential buyers rely solely on your accuracy when deciding to put in an offer or step away from the purchase. Therefore, if you make errors, you can be held liable and sued.
What Are The Insurance Requirements for Home Inspectors in Canada?
Depending on your province, you might be required by law to hold a valid commercial general liability and errors and omissions insurance policies. Both coverages come with minimum limits, but it’s likely you’ll need more to be sufficiently protected.
With that said, even in areas where it’s not mandated, carrying insurance is still highly recommended. Regardless of your operation location, home inspection insurance should undoubtedly be part of your risk assessment strategy.
Provinces where home inspectors are required by law to hold CGL and E&O policies are as follows:
- British Columbia
Do Home Inspector Insurance Policies Cover All Your Employees?
Your employees might be covered in your home inspection insurance policy. But keep in mind that your coverage limit tends to apply to all your employees, not the individuals.
You may want to consider increasing your coverage level to ensure your team has enough coverage. When you request a quote from us, we analyze many aspects of your business to determine exactly how much coverage you require.
What Other Insurance Policies Can LiabilityCover Help You Get?
Alongside the policies included in a general home inspector insurance package, we can help you obtain a variety of other coverages, including:
- Commercial auto insurance coverage — As the name suggests, it covers vehicles used for work reasons, such as cars, trucks, trailers, and vans.
- Directors and officers insurance coverage — If your business has a board of directors, you need this policy to protect them if they’re personally named in a lawsuit. It covers breach of fiduciary duties, employee discrimination, wrongful dismissal, and corporate manslaughter, to name a few.
- Legal expense insurance coverage — Since hiring a lawyer is notoriously expensive, this policy covers the costs involved with retaining a high-quality lawyer for numerous common business issues.
- Product liability insurance coverage — It covers third-party property damage or bodily injury caused by a product you sell, manufacture, or distribute.