Its more than just a game of luck
Home and building inspectors are in high demand in the Ontario area. However, walking through a home or building, while taking notes on the condition of the foundation, roofing, duct work, and electrical systems can be quite an in depth task. It is not hard to imagine that you could easily overlook or miss something that could later lead to thousands of dollars in repairs for the potential buyer. Click here to read more about home inspectors association claims. Of course, when a situation like this happens the involved parties are going to come looking for reimbursement. This is the perfect type of situation in which error and omissions insurance can come in handy for the inspector.
While there are several different types of polices, the main goal of error and omissions insurance is to cover the inspector in the event that he/she makes an error, which leads to a financial loss for the customer. This type of insurance is also a great selling point, when it comes to offering your services to potential customers. If a customer knows that they will be covered, in the event that you make a mistake, they are going to feel more comfortable when purchasing your services. However, before you just go out and purchase E&O insurance, with the first licensed agent you come across, there are several things that you need to be aware of.
As an inspector your job is to detect potential problems and advise the homebuyer that the repairs need to be made by the seller. This needs to be done, before the buyer makes an offer for the home. Well, the same concept applies to error and omissions insurance. The longer that you go without this coverage, the more risk you are taking. You also need to be aware of the fact that most insurance agents use what is known as a retroactive date. This date determines how far back in time the coverage will go. Any claim that is made before this date will not be covered, which is why it is imperative that you get the coverage as soon as possible. It is advisable to purchase this coverage before you even open your business.
Knowing Exactly What E&O Insurance Covers And Doesn’t Cover
E&O insurance policies are designed to specifically cover you in the event that you or an employee accidently causes your customer to incur financial losses. For anything else outside of this scope, you will need additional coverage. For instance, E&O insurance does cover bodily injury due to an accident that occurs on a jobsite. It also does not cover any damages that are done to the customers’ property, while you performing a job duty.
Assess Your Risks
Before purchasing an errors and omissions insurance policy in Ontario, you will need to assess your risks. As an Ontario home inspector, you are left with a long list of responsibilities and job duties. When you enter a home, you are expected to cover every aspect of a thorough inspection, including the flooring, roofing, plumbing, sewage and electrical systems. If you fail to inspect one of these systems, you will be putting the homebuyer at risk of financial loss. If the system fails or malfunctions shortly after the homebuyer moves into the home, you may very well be faced with a lawsuit. Someone is going to need to pay for the repair or replacement costs of the system and the homebuyer is not going to be willing to accept the responsibilities.
The insurer will determine the level of risk that they will accept, when underwriting an errors and omissions policy. It is totally up to the insurer to decide, whether or not they are willing to provide you with the requested coverage. If the insurer reviews and accepts your application, you will need to pay a premium. The amount of the premium is based on the level of risks and the deductible, which is basically the amount of money that you are willing to pay, in the event of a claim. As you probably already know, the higher the deductible the lower your premium. Before determining the deductible amount, you will need to consider your finances, because you will need to pay for this expense out of pocket.