Errors and Omissions Insurance, also known as Professional Liability insurance, covers professionals for negligent acts which stem from the professional services offered.
In the past few years there has been a significant increase in the number of claims filed against inspectors. Now more than ever, E&O insurance is a necessity for all home inspection businesses. FREA offers a comprehensive Claims-Made policy with the best rates and lowest deductibles.
E&O Insurance Policy Limits:
Level A ($1,000,000 aggregate / $1,000 deductible)Level B ($500,000 aggregate / $1,000 deductible)Level C ($300,000 aggregate / $1,000 deductible)Candidate (For new entrants into the profession) ($500,000 aggregate / $1,000 deductible)
All policies include:
Unlimited number of inspections
Both residential (up to 75 units) and commercial work (up to 20 acres)
Referring Party Coverage
Retroactive coverage (upon approval)
Underwritten by an A++ rated carrier
Insurance program is admitted in all 50 states
Simplified application
Benefits package
Installment plan available
Fast, Personal Service
Beginning Inspectors
FREA welcomes those inspectors who are new to the home inspection industry. As you may know, actuarial data shows that inspectors are exponentially more likely to get a claim during their first 12 months of business. It is for this reason that many carriers refuse to underwrite inspectors who are new to the profession. As long as applicants can show evidence of formal training from an approved school, FREA can insure you under Candidate coverage. Once an applicant has had the candidate level of coverage for one year, he/she may switch to one of the less expensive levels (provided there has been no claims made against the applicant).
Candidate Coverage Includes:
$500,000* aggregate /$1,000 deductible E&O insuranceNOTE: If you require $1,000,000 in E&O. it is available for an additional $300)
Risk Management Tutorial CD
Benefits Package
Corporation Coverage
If you operate under the protection of a corporate entity, optional coverage is available to protect the assets of the corporation. Adding corporation coverage to your policy protects the corporation in the event it is named as a defendant in a lawsuit. Please note, however that this does not provide blanket coverage for sub-contractors, employees, or trainees. It will only provide coverage for your corporation as long as the sub-contractor, employee, and/or trainee has their own independent coverage at the time the claim is made.
General Liability
The general liability policy covers bodily injury, property damage, personal injury and advertising injury to others. The policy limit is $1,000,000 each occurrence / $1,000,000 aggregate with a $500 dollar deductible.
Fidelity Bond
FREA offers fidelity bonds in the amount of $5,000 or $10,000. Purchasing a Fidelity Bond (a.k.a. honesty bond) protects your clients against possible theft while you're at the residence/site. It offers the client peace of mind and provides the inspector with a valuable marketing tool.
Radon
The Radon policy covers radon testing and detection. It does not cover radon mitigation or consulting services. Applicants must have passed the EPA Radon Measurement Proficiency Exam or a state equivalent radon program exam.
WDI / WDO
Wood Destroying Insect and Wood Destroying Organism coverage is available through FREA. Wood Destroying Insect means arthropod life which damages and can re-infest seasoned wood in a structure, namely termites, carpenter ants, wood boring beetles, wood boring wasps, carpenter bees, powder post beetles, and old house borers. Wood Destroying Organism means arthropod or plant life which damages and can re-infest seasoned wood in a structure, namely termites, carpenter ants, wood boring beetles, wood boring wasps, carpenter bees, powder post beetles, old house borers and wood decaying fungi.To be eligible for coverage, a minimum of twenty-five (25) WDI/WDO inspections must have been performed by the inspector. The WDI/WDO policy does not cover any WDI/WDO treatment or mitigation services.
E&O
$3295
$3195
$2995
$3550
Corporation
$330
$320
$300
$450
WDI/WDO
$495
$150
5K Bond
$75
10K Bond
$135
What is a Claims-Made Policy?
A "claims made" policy protects the policyholder against claims or incidents that are reported while the policy is in force or during an "extended reporting period". The negligent act, error, or omission must have also occurred during the specific time frame set by the policy.
What is the difference between a Claims-Made Policy and an Occurrence Policy?
With an Occurrence Policy, the claim has to occur during the policy period, regardless of when a claim is actually made or reported. On a Claims-Made policy, the claim must be made or reported during the policy period, regardless of when the claim actually happened.
What is General Liability?
General liability covers bodily injury and property damage to others while you are at the inspection. (Ex: your ladder falls through a window and injures the owner's child.)
Are my employees covered under my policy?
No. Our policy covers the individual inspector only. Each employee needs to obtain their own E&O policy.
How long does it take to get an insurance binder?
It typically takes 5-7 business days to receive a copy of your insurance binder via FAX. An original binder along with your policy will be mailed to you in approximately 4-6 weeks.
What happens if I get a claim?
Inspectors who are insured under FREA's policy who receive a claim should call the FREA office and speak to FREA's General Counsel. He will discuss your claim with you and help you manage and contain the issue in an attempt to resolve it without the insurance company's involvement. This strategy has helped us keep our claims down which in turn keeps our rates low.
Can I lower my rate by getting a higher deductible?
All premiums and deductibles are pre-set. We do not offer a deductible higher than $1000.
If my state doesn't have licensing or certification for Radon and WDI/WDO inspections, can I still get coverage?
Yes, but you need to submit proof of training from the lab you use or from an educational provider with your application.
What is Referring Party Coverage?
Referring Party Coverage is included in all levels. It covers any real estate agent and/or broker who may hire or refer you for the purpose of performing a home or commercial inspection. In the event the referring party is named or enjoined in any claim against you, a defense will be provided and any damages up to your aggregate limit of liability will be paid.
Do you have an installment plan?
Yes. FREA's installment plan requires an additional enrollment fee of $350 due with the application. Candidate Memberships require $750 due with the application. This amount includes the non-refundable $350 enrollment fee and $400 of the membership fees. All remaining membership fees will be billed and are to be paid in 8 monthly installments. Automatic debit is also available.