Don't Inspect for Pests - Sued Anyway?
By Isaac Peck, Assistant Editor
your inspection specifically excludes wood destroying insects/organisms (WDI/WDO),
that does not stop an irate homeowner from suing if a problem arises. That’s
why it is good to have a clear scope of work, a signed inspection agreement
and a broad errors and omissions insurance policy- just in case.
“We see new homeowners move in and begin a remodel only to find termite damage that was hidden behind a wall, so it was unseen and unreported by the inspector,” said David Brauner, Senior Broker at insurance provider OREP.org. “Their first instinct is to try to recover some of the expense from the home inspector. The inspector responds with their scope of work and agreement, signed by both parties, which specifically excludes WDI/WDO or pest inspections and is limited to what is visible. That’s great but if that does not stop the homeowner there, the inspector may have to be prepared to prove his case in court and it may be without the help of his insurance carrier if he did not purchase that specific coverage.”
says that OREP’s E&O base policy provides what is known as “incidental”
coverage for pests and other services- for when a problem like this arises.
“That’s why a broad policy form is so important,” said Brauner. Brauner
recommends asking your agent when you’re shopping insurance about what is
and isn’t covered in the base policy- whether you specifically inspect for
it or not.
Here is a real rebuttal letter
prepared by the claims department representing an OREP insured:
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