Do home inspectors need E&O insurance?

State rules fall into four groups. Some require E&O. Some require general liability, which covers injury and property damage. A few require both, and a few require nothing. These examples come from the licensing laws and board pages behind this site's state pages, checked in October 2026.

A few details catch people. Illinois requires general liability of at least $100,000 and wants it kept for at least one year after your last report. New Jersey and Massachusetts both build a 10-day written notice to the board into any cancellation. Washington's structural pest inspector license is a separate case. For it, RCW 15.58.465 sets E&O at no less than $25,000 when E&O is the proof used.

The rules also change. Florida's Senate Bill 360 would have required E&O with a $500,000 minimum, and it died in committee on March 13, 2026. Before you buy a policy, read your own state's rule on the state requirements pages.

E&O is professional liability. It answers a claim that your work was wrong: a missed defect, or a report that misstated a condition. General liability answers physical harm. A client trips over your ladder, or a window cracks while you open an attic hatch.

Neither policy covers the other's claims. A state that requires only general liability, such as Florida or Virginia, leaves the missed-defect claim to whatever E&O the inspector buys on their own.

Say a client claims you missed a defect. An E&O policy generally pays for the defense attorney and any settlement or judgment, up to the policy limits. What it excludes varies by policy, so read the exclusions page of every quote. Russ Motyko tells inspectors to look for these:

• Intentional acts. Insurance covers mistakes, not a defect you knew about and left out.
• Bodily injury and property damage. Those claims go to general liability.
• Mold, asbestos, and lead. Often excluded or limited. Some carriers sell an environmental endorsement.
• Work beyond the home inspection. Radon, pest, pool, or consulting work might need to be named on the policy.
• Claims you knew about before the policy began.

A signed pre-inspection agreement works next to the policy. It sets the scope and often tries to cap liability at the fee. Whether a court enforces that cap depends on the state's law and how the clause is written. Have an attorney in your state review it.

An occurrence policy covers an inspection done while the policy was in force, no matter when the claim arrives. A claims-made policy is stricter. It needs a policy in force when the claim is made, and the inspection has to fall on or after the policy's retroactive date.

InspectorPro, a home inspector insurance program, says on its claims-made page that most home inspectors have claims-made coverage. The reason it gives: occurrence policies are hard to find and pay for. It defines the retroactive date as the day your uninterrupted coverage began. Let the policy lapse and, by its account, you lose coverage for every inspection done before the current policy.

So guard that date when you switch carriers. InspectorPro's advice is to bind the new claims-made policy before the old one expires. Send the old policy's declarations page with the application, then check that the new declarations page shows the right retroactive date.

Claims can arrive months or years after an inspection. Once you cancel a claims-made policy, it no longer answers a claim for past work. Tail coverage closes that gap. Its formal name is an extended reporting period (ERP) endorsement, and it lets you report claims after the policy ends for inspections it would have covered.

On InspectorPro's page, its inspectors can request tail coverage within 60 days after the policy period ends. Other carriers set their own terms. Ask about tail before you cancel anything, whether the reason is retiring, selling the business, or leaving the field. Some states also cap how long a client has to sue. For the state deadlines, see how long after an inspection a client can sue a home inspector.

InspectorPro's pricing page says its home inspector insurance costs around $1,200 to $2,500 a year in premium. It does not split that figure between E&O and general liability. The factors it lists are your limits, deductible, and endorsements, your inspection volume and employees, your claims history, and discounts. That is one program's range, read October 27, 2026, so get more than one quote.

A premium is one line in the cost of starting out. For the rest, see what a home inspector license costs and how many inspections a day is realistic.