"Do you have Professional Errors and Omissions Insurance?"
This question is almost always asked for the wrong reason.
Have you ever asked your Lawyer or Doctor if they are insured before using their services?
Many homeowners have been incorrectly led to believe that this becomes their safeguard if anything goes wrong with a house once they move in. Often the line "don't worry if anything does go wrong, your inspector will have insurance" is offered as a "buffer" or "reassurance" by the realtor during a home purchase negotiation.
This is not the case! If anyone tells you this or implies that this is the case, they may be liable and subject to a law suit themselves! The vendor disclosure statement is actually your safest and most reliable recourse against any existing problems in the case of a resale home.
A home inspection is not a warranty or guaranty regarding the condition of the property at the time of it's inspection or afterwards. It is an opinion based upon readily visible conditions that were present at the time of inspection. A home inspector does not have super powers to see behind finished walls or under floors. They cannot predict what will happen during a severe downpour of rain when an inspection takes place on a hot sunny day unless there is visible evidence of past problems.
In today's world where legal suits are often rampant and deemed a quick fix to a potentially expensive problem, many home inspectors have been targets and recipients of unfair law suites. Some inspectors are now including "counter suit conditions" in their contracts where any unfounded or non successful law suit launched by a client against them will result in the client being countersued for potential defamation of character and all related court costs for the inspectors defense. While this may appear harsh, numerous unfounded claims have unfairly resulted in the escalation of professional insurance premiums for all home inspectors to the point where many inspectors no longer carry insurance at all.
Clients must realize that when purchasing a home for several hundred thousand dollars, a home inspection costing a couple of hundred dollars and completed within a few hours, is not an insurance policy on the home in any way, shape or form.
That type of reassurance would take days of research and cost thousands of dollars!
As home inspection is still unregulated in Canada, there is no legal requirement for inspectors to carry errors and omissions or liability insurance however some members of professional home inspection associations do so. The sad truths is that having professional insurance used to be a mandatory requirement for all members of The Ontario Association of Home Inspectors (OAHI) or Registered Home Inspectors but it no longer is! However, due to both rising costs and the fact that many OAHI members could no longer obtain E & O insurance (Perhaps due to past claims) it was completely dropped as a membership requirement. However ALL National Home Inspectors in Canada must carry Professional E & O insurance.
We carry Errors & Omissions insurance at HOME INSPECTORS.
Errors and omissions insurance is there to protect the inspector and their client in the case where the inspector is proven to have been clearly negligent during the inspection.