Error & Omission Insurance Requirements - PLEASE COMMENT

[Sam Omer]

Hi All,

I have an interesting question.
I am not HI yet but i am planned on becoming as i really have respect for this profession. I am in that stage of learning about the nuts and bolts of this interesting profession. That explains my question which may seems trivial or obvious to some of you guys. I am sure i could have found the answer if i google and researched.

Anyhow, here is the question.
is the E&O policy mandatory for each individual or is it only for the company under which the HI is working?
Can seveal HI guys buy E&O collectively and share the cost equally and be covered equally?

[Michael Larson]

Originally Posted by Sam Omer

Hi All,

I have an interesting question.
I am not HI yet but i am planned on becoming as i really have respect for this profession. I am in that stage of learning about the nuts and bolts of this interesting profession. That explains my question which may seems trivial or obvious to some of you guys. I am sure i could have found the answer if i google and researched.

Anyhow, here is the question.
is the E&O policy mandatory for each individual or is it only for the company under which the HI is working?
Can seveal HI guys buy E&O collectively and share the cost equally and be covered equally?

Not knowing where you are located makes this impossible to answer as regs and requirements vary by state.

[Sam Omer]

I am in Illinois in the greater chicago area.

Reason of question is:
E&O seems to be too expensive for one poor guy who is already being hit by a slow in the market.
So, why not reduce the overhead cost by sharing certain elements (like Insurance) with other HI's

[ldapkus]

E&O insurance is not mandatory in Illinois. For a new inspector it will cost about $3000 for your first year. Figure a minimum of $10,000 minimum to get your new buisness up and running and monthly overhead of over $1,000 not including rent. Don't quit your day job. Typically the winter months are slow from now until March. You could probably make more money through an apprentiship at McDonalds. Good Luck.

[Michael R. Boyett]

Sam, several E&O providers provide coverage for all employees of a specific company. None allow several independent inspectors to get together to pool their coverage to my knowledge.

[Sam Omer]

If E&O is not mandatory in Illinois, then how would a HI be covered if errors and/or omissions occur?

But, in general (even in other states), is the E&O for the person (i.e HI as a person) or the business entity under which the HI is working.
In other words, when two or more HI's work in the same business name, does each and every one of them purchase a separate E&O policy or are they all covered under one E&O policy?

[Bob Elliott]

Sam , why are you asking us rather than a carrier?

Linus has answered your question.

Make sure you have more than $10,000 for expenses as work will be slow at the beginning despite what all the marketing Gurus tell you.

Over %50 have gone out of business his year is my guess.

[Dale Duffy]

Originally Posted by Sam Omer

If E&O is not mandatory in Illinois, then how would a HI be covered if errors and/or omissions occur?

But, in general (even in other states), is the E&O for the person (i.e HI as a person) or the business entity under which the HI is working.
In other words, when two or more HI's work in the same business name, does each and every one of them purchase a separate E&O policy or are they all covered under one E&O policy?

Sam,

In Arizona, an E&O policy would cover all the inspectors working for the company, the owner simply pays more for the coverage depending on the number of inspectors doing inspections.

I think it's the same all over the US, but different from one insurance company to another, their guidelines.

[Sam Omer]

Thank you all fine gentlemen