E&O insurance -- Would you buy if not required?

[Mark P]

Tom - What compay do you have the policy through?

[Tom Raymond]

Merchants Mutual.

[Mark P]

Thanks I'm looking into it.

[John Kogel]

If 30 guys put cash in a pot, we could have an insurance co-op, and get one insurance company to underwrite us for a few years until we accumulate enough cash to buy the house if need be.

CAHPI(BC) has done this, with 200 guys contributing. I would be willing to discuss this furter, but am offering an option that every trade union has - we can insure ourselves.

[Scottpat]

If 30 guys put cash in a pot, we could have an insurance co-op, and get one insurance company to underwrite us for a few years until we accumulate enough cash to buy the house if need be.

CAHPI(BC) has done this, with 200 guys contributing. I would be willing to discuss this furter, but am offering an option that every trade union has - we can insure ourselves.

It is a great concept and idea that works.

[kurt]

It's a good idea. The inherent problem is herding home inspectors, which may be harder than herding cats. Cats usually understand what's in their best interest, HI's not so much.

But, it's still a good idea and the basis for most insurance, i.e., groups.

It would require a shepherd, though, and I can't imagine a worse fate than trying to get bunch of HI's all moving in the same direction.

[InspectorPro Insurance]

Old post but I think I can add some value.

State mandates aside, how much insurance you purchase is up to your risk tolerance: how much you’re willing to leave to chance versus how much you want to protect yourself. Examples of someone with a high risk tolerance:

• Someone who carries no insurance.
• Someone who just carries one type of insurance, like just general liability.
• Someone who chooses low insurance limits (i.e. $100,000 / $100,000).
• Someone who chooses a high deductible (i.e. $5,000).
• Someone who doesn't carry endorsements for the additional services they perform. (i.e. They perform mold tests but don't carry mold coverage.)
• Someone who purchases a heavily sublimited insurance policy.

Examples of someone with a low risk tolerance:

• Someone who carries high insurance limits (i.e. $1,000,000 / $2,000,000).
• Someone who chooses a low deductible (i.e. $1,500).
• Someone who carries endorsement for all ancillary inspection services, regardless of whether they perform those services. (i.e. They don't perform mold testing but they carry mold coverage anyway.)
• Someone who purchases an insurance policy with little to no sublimits.

Obviously, insurance companies like us are always going to advocate carrying more insurance rather than less. But ultimately, it's up to your personal risk tolerance.

Some educational resources on choosing insurance coverage:

• E&O vs GL Insurance: What they are and why we recommend both
• 3 Ways Your Deductible Determines What You Spend and When
• 4 Ways to (Re)Choose Your Insurance Limits

As for the concept of insurance co-ops, there are a handful of inspection franchises who use a similar method: they add all of the inspectors in their franchise to one policy. The only issue is that claims history is still a factor that determines what to charge the groups. So often, these groups end up being just as expensive or more expensive.

[Marc]

16 hours ago, InspectorPro Insurance said:

Old post but I think I can add some value.

State mandates aside, how much insurance you purchase is up to your risk tolerance: how much you’re willing to leave to chance versus how much you want to protect yourself. Examples of someone with a high risk tolerance:

• Someone who carries no insurance.
• Someone who just carries one type of insurance, like just general liability.
• Someone who chooses low insurance limits (i.e. $100,000 / $100,000).
• Someone who chooses a high deductible (i.e. $5,000).
• Someone who doesn't carry endorsements for the additional services they perform. (i.e. They perform mold tests but don't carry mold coverage.)
• Someone who purchases a heavily sublimited insurance policy.

Examples of someone with a low risk tolerance:

• Someone who carries high insurance limits (i.e. $1,000,000 / $2,000,000).
• Someone who chooses a low deductible (i.e. $1,500).
• Someone who carries endorsement for all ancillary inspection services, regardless of whether they perform those services. (i.e. They don't perform mold testing but they carry mold coverage anyway.)
• Someone who purchases an insurance policy with little to no sublimits.

Obviously, insurance companies like us are always going to advocate carrying more insurance rather than less. But ultimately, it's up to your personal risk tolerance.

Some educational resources on choosing insurance coverage:

• E&O vs GL Insurance: What they are and why we recommend both
• 3 Ways Your Deductible Determines What You Spend and When
• 4 Ways to (Re)Choose Your Insurance Limits

As for the concept of insurance co-ops, there are a handful of inspection franchises who use a similar method: they add all of the inspectors in their franchise to one policy. The only issue is that claims history is still a factor that determines what to charge the groups. So often, these groups end up being just as expensive or more expensive.

The folks with the highest risk are the ones who don't know houses well, can't read them well and can't write well.  That goes for about 80%, 95% of the home inspectors in this country.  Just my low-down, rotten, humble opinion.

[InspectorPro Insurance]

5 hours ago, Marc said:

The folks with the highest risk are the ones who don't know houses well, can't read them well and can't write well.  That goes for about 80%, 95% of the home inspectors in this country.  Just my low-down, rotten, humble opinion.

Good point. Lacking expertise, training, and communication skills definitely increases your risk. It's interesting to note that, of the claims we received in 2017, 80% of them were "meritless," meaning the technical inspection was fine. A lot of those claims came down to communication issues, where the client didn't understand the scope of the inspection or the inspector's findings. So, there's definitely a lot to be said about risk tolerance and setting expectations.

[SmithEnt]

I'm new to this industry. I was required to buy E&O and therefore did some research on it. I really shopped around because I have a tight budget as I'm just starting out. I found this company called Errors and Omissions Online to be the cheapest. Glad I shopped around.

[Jim Katen]

11 hours ago, SmithEnt said:

I'm new to this industry. I was required to buy E&O and therefore did some research on it. I really shopped around because I have a tight budget as I'm just starting out. I found this company called Errors and Omissions Online to be the cheapest. Glad I shopped around.

Are you related to "Errors and Omissions Online" ???

I only ask because you have only ever made two posts to this forum and both praise the virtues of that company.