Errors and Omissions
Insurance
Errors and Omissions Insurance, sometime referred to as Professional
Liability Insurance is very similar to your doctor's Malpractice
Insurance.
If your inspector were to make a serious error in judgment, E&O
insurance may protect both YOU and the inspection company from financial
hardship.
AccuSpec's E&O Insurance, obtained through the
Organization of Real Estate Professionals covers our clients,
those who refer us to our clients, our inspectors, and our company.
For example, if your inspector were to report that the roof shingles
were in satisfactory condition AND you could show that the roof shingles
actually were at the end of their life and were clearly in need of
replacement at the time of the inspection, then you may have a
claim against the inspection company.
Most inspection companies are small businesses with limited, if any, assets. You've heard about "squeezing blood out of a
turnip." In the above example you may be asking the company for $3000 to
$4000 for roof shingle replacement, and the company may simply not have
the money available. You cannot get what someone does not have, so
without E&O your claim may not be satisfied.
E&O Insurance is expensive. It costs the companies that carry it
thousands of dollars per year. AccuSpec inspectors are required to carry
it. AccuSpec views carrying E&O as part of a sound risk management and
customer satisfaction program.
Notice - Almost all
inspection companies have an inspection contract that limits the
company's and the inspector's liability to the amount of the inspection
fee. This limitation applies to errors and omissions in judgment as well
as outright negligence. If the terms of the contract are upheld, then
the client in the above example would only be entitled to a refund of
the inspection fee. If the contract were thrown out by a judge or a jury
or a different settlement was negotiated with the company, then the
company may rely on its E&O Insurance for financial assistance to settle
the claim.
AccuSpec gives its clients a
choice. Our standard (published) inspection fee includes
the limitation of liability as described in the previous paragraph.
However, for an additional fee (currently 2 x standard) AccuSpec
liability can be increased to $250,000. You may
read our
contract if you have Acrobat Reader installed.
