It is now more important than ever to inquire as to whether your building inspector is covered by Errors and Ommissions Insurance. This article posted today on the Canadian Real Estate Association's member web site shows that all home inspectors are not equal.
Home inspectors head towards self-insurance. Loss of national E&O plan raises concerns.
January 9, 2004- The Canadian Association of Home and Property Inspectors (CAHPI) is moving towards self-insurance after the loss of its errors and omissions insurance policy in September 2003.
Bill Mullen, president of CAHPI, says the association was told mid-2003 by its carrier, Emcon Group Inc., that it would no longer be providing errors and omissions insurance to members of the association. That left the association scrambling to cobble together an insurance plan for its members before its September year-end.
“We ran into real roadblocks in getting the plan up and running,” Mullen says. “We managed to get together a group of five insurance companies in some areas and three in others who would be willing to offer the insurance, but members had to apply for it on their own.”
The provincial home inspectors’ associations decided to advise their members that they didn’t have to carry the insurance, but they were obligated to disclose the fact they were not covered to potential clients.
“You can’t force people to carry insurance,” Mullen says. “It’s a business decision for each member.”
Mullen says that CAHPI is looking at developing a self-insurance plan by September 2004. “We’re taking the next year to develop the plan,” he says. “We’re doing a lot of research and we have insurance experts helping us with the facts and figures.”
Mullen says that as the general public engages in a growing number of lawsuits, E&O insurance becomes more of an issue for CAHPI members.
“So many claims that are filed these days are just frivolous,” he says. “Many people are under the impression that if they get a home inspection, they have a warranty on their house for as long as they own it. The insurance is to protect our members, not to replace a sump pump every year.”