Exposed wire in garage ceiling should be covered

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DEAR BARRY: In some of your articles, you advise people to hire home inspectors who have errors and omissions insurance (E&O).

Ive been a home inspector for 15 years and have avoided E&O insurance for four important reasons: 1) Insurance does not prove that a home inspector is qualified; 2) Insurance covers the inspector if he is sued, but it does not insure the homebuyer against financial loss for an undisclosed defect; 3) If a home inspector does his job well, he doesnt need insurance; 4) Having insurance attracts frivolous lawsuits. What do you think about these objections? Jeff

Dear Jeff: Regarding errors and omissions insurance, there are two schools of thought among home inspectors, and both have some merit. In response to your four arguments against E&O, here are some points and counterpoints:

On two of your points, we can agree: E&O insurance is not essential to every home inspection company, and E&O coverage does not indicate whether a home inspector is truly qualified.

In fact, some of the best home inspectors work without insurance for one of the very points that you made: namely, that insurance can be a magnet for baseless lawsuits.

As most people know, we live in a litigious business climate in which attorneys name as many defendants as possible in order to get as many settlements as possible. The deep pockets provided by an insurance company can definitely attract that kind of trouble.

On the other hand, frivolous lawsuits can be filed against a home inspector, even when there is no E&O insurance. Case in point: There was an ongoing lawsuit against a termite inspector for failure to disclose damaged wood in a home.

The plaintiffs attorney decided to name the home inspector in the suit. The home inspector, by law, was not required to disclose termites, so there was no basis for the complaint against him.

Nevertheless, he had to hire an attorney and eventually settled for thousands of dollars. With E&O insurance, he would have paid the deductible and walked away from the problem.

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Exposed wire in garage ceiling should be covered