An additional insured is any individual or organization not automatically included as an insured under the policy that you add as an insured by requesting it. We recommend that you ask to be named as an additional insured on the insurance policies of those to whom you refer business through an additional insured endorsement and obtain proof of that endorsement with an additional insured certificate.
An adjuster is a person that investigates insurance claims, determines the extent of insurance coverage available, coordinates your defense, and participates in any settlement negotiations.
Inspection assets are the documents and graphics you create for and at each inspection, such as photos, videos, signed contracts, and reports. Our claims team recommends that home inspectors keep inspection assets for a minimum of five years, regardless of the statute of limitations in your area.
Best’s Rating is the A.M. Best Company rating system that indicates the financial stability of insurance carriers with a report card-like grade. All of the insurance carriers we use have an A- or higher ranking.
To bind insurance coverage is to officially put that coverage in place. We confirm your insurance coverage purchase with a binder, which is temporary evidence of your insurance coverage until the insurance carrier issues you your policy a couple weeks later. Keep your binder for a quick reference to your policy number, coverage start and end dates, your limits, your deductible, and your endorsements.
Your insurance broker—also known as your agent or producer—is your representative with your insurance carrier. Typically, your broker is the person you worked with when you applied to our program the first time. Often, your broker will have an assistant that will help you with the paperwork for your annual renewals. Your broker and their assistant are your go-to resources for your insurance questions, updates, and needs.
Your insurance carrier—otherwise referred to as your insurance company or insurer—is the company that insures or “carries” the insurance policy we provide you. You can find the name of your insurance carrier on your binder and your policy.
Here at InspectorPro, a claim is a written demand for money that is based upon an actual or alleged “wrongful act.” However, we recommend reporting any demand for money or insurance information, regardless of whether or not it’s formal or written, to take advantage of our pre-claims assistance. Your insurance policy requires you to report claims to us immediately and no later than 60 days after your policy expires.
A claimant is a person that makes a claim against you. If you receive any claims, your claimants will most likely be your home inspection clients. However, other members of the real estate transaction can attempt to make claims against you, too.
Your policy with us is claims-made, meaning you need to have a current policy and continuous coverage for protection from claims. Unlike occurrence coverage, which responds to claims that occur during your policy period no matter when the claim is filed, claims-made coverage covers claims that occur on or after your retroactive date and until your policy expires.
The declarations, or dec page, is the page(s) of your policy that provide key information about your insurance coverage, like your policy number and insurance limits.
A declination of coverage occurs when an insurance carrier rejects a reported claim. Claims coverage may be declined if the allegations brought against you are outside of the insurance policy’s scope. To avoid a declination of coverage, we recommend (1) ensuring that your inspections do not offer services not covered by your insurance and (2) purchasing endorsements for additional services that you do perform or would simply like covered.
Your deductible represents the amount you pay the insurance carrier for defense and payout help for each claim. There are two types of deductibles: simple deductibles and self-insured retentions (SIRs). Since we offer a simple deductible, you don’t pay until the claim closes. That means you get all the defense before you pay. And if closing the claim costs less than your simple deductible, you pay that lesser amount. Alternatively, self-insured retentions that other insurance providers offer require payment up front. You have to pay your SIR in full before the insurance company can start defending you. If your claim closes at a lower rate than your SIR, it’s not guaranteed you get the difference back.
Your diminishing deductible endorsement — also referred to as a reducing, depreciating, or disappearing deductible—rewards you for your consecutive years with us and without claims. With InspectorPro, for each consecutive policy period that you do not have a claim, your deductible will be reduced by 10 percent subject to a maximum reduction of 50 percent.
Your effective date is the date your insurance coverage goes into effect. Your insurance policy’s protection begins on this date, unless you have retroactive coverage.
An endorsement is a form that either changes or adds coverage to your insurance policy. Most home inspection insurance policies exclude additional services, like mold or pool and spa inspections. Thus, the insurance company will not offer coverage for those additional services without an endorsement. If you perform additional services or want defense and payout help for claims involving additional services, you may wish to override an existing policy exclusion with an endorsement.
Errors and omissions (E&O) insurance, also known as professional liability insurance, protects you when your clients accuse you of missing something during their inspection—or, at the very least, leaving it out of your report. In other words, you’re protected when clients accuse you of not doing your job right.
Your policy’s expiration date is the day your insurance coverage ends. Note that failure to renew your insurance coverage prior to your current policy’s expiration date may result in a loss of retroactive coverage. If you do not intend to renew, have not signed up with another insurance provider, and have not purchased an extended reporting (ERP) endorsement, then you have until no later than 60 days after your policy expires to report claims. Any claims occurring more than 60 days after your policy’s expiration date will not be covered.
An extended reporting period (ERP) endorsement, also known as “tail” coverage, allows home inspectors to report claims for inspections that would have been covered prior to their last policy’s expiration. We recommend that all home inspectors purchase an ERP endorsement of one to three years to protect themselves after leaving a franchise, a business, or the industry.
A gap in coverage occurs when a home inspector fails to carry continuous insurance coverage by not renewing their insurance policies on time. Gaps in coverage often result in a loss of retroactive coverage.
General liability (GL) insurance protects you when your clients make broad allegations against you. Unlike E&O claims, GL claims don’t typically question the quality of your home inspection or service. Rather, GL claims involve any bodily injury or property damage that result from the inspection.
Inland marine coverage, or equipment coverage, is an optional policy endorsement that insures your equipment and tools against theft for up to $10,000. In order for inland marine coverage to apply, you must purchase the endorsement and provide a schedule of covered items, or list of your equipment and tools with serial numbers and item values, annually.
Your insurability is your ability to have your insurance applications accepted by carriers at a competitive rate.
Insurance limits represent the total dollar amount your insurance company can pay toward your covered claims in a given policy period. You have two limits: your occurrence limit, which is the maximum amount the insurance company will pay per claim, and your aggregate limit, which is the maximum amount the insurance company will pay during the policy period.
A loss reserve is the amount of money the adjuster sets aside to make payments for your claim. It’s the adjuster’s best guess as to how much defense and payouts could cost.
A loss run is a report of your claims history over the last five years. Adjusters use your loss run to assist in determining your rate.
The named insured, also known as the insured or policyholder, is your home inspection business and its employees, all of whom are automatically covered under your insurance policy.
Your insurance policy is your written contract between your business and the insurance carrier.
Your policy period is the dates during which your insurance coverage is active, from effective date to expiration date.
Proof of insurance (POI) is a certificate you can request to prove that you currently carry insurance. Builders, realtors, franchisors, and state governments may ask you for a POI. You can find a POI in your binder. You may also request free copies from us by contacting your broker or their assistant.
Your insurance provider is us, InspectorPro Insurance and our parent company, Citadel Insurance Services, LC. Our job is to match your business needs to the best insurance carrier. We also provide you with the extra benefits, like pre-claims assistance, customer service, and risk management education.
With your policy’s referring party indemnification, should there be a claim about inspection findings, the insurance company assumes liability for not just you but the referring party. In most cases, the referring party is the realtor that recommended you as the inspector to your shared client.
Your insurance renewal occurs when your current policy expires, usually a year after it began. Our insurance carriers do not currently offer automatic renewals, so be sure to look out for an updated quote or an application request about 60 days prior to your current policy’s expiration date.
A reservation of rights (ROR) is a letter that alerts you when some elements of a claim may not be covered. A ROR allows the carrier to investigate and defend a claim to determine whether the allegations are covered while still maintaining its right to issue a denial of coverage if they discover that the claim is, in fact, beyond the insurance policy’s scope. The letter is intended to allow you to take necessary steps to protect your potentially uninsured interests.
Retroactive coverage, also known as retro or prior acts coverage, allows the insurance company to cover inspections that occurred before your policy began. Your prior acts coverage starts on your retroactive date, or the day you started carrying continuous home inspection insurance coverage with us or another provider. That retro coverage stays intact so long as you renew your insurance on time each year and, if switching providers, you provide proof of retro coverage with your policy declarations.
Risk management is the practice of learning what increases your likelihood of receiving a claim and working to minimize those risks.
Your risk tolerance — also referred to as your risk threshold or risk appetite—is how much you’re willing to leave to chance versus how much you want to protect yourself. For example, someone who chooses a higher deductible would have a higher risk tolerance than someone who chooses the lower since those with a higher deductible would have to pay more if a claim arose.
Sublimits cap certain risks, usually additional services, defined in your insurance policy, which may cause you to be unintentionally out of compliance with your state or contractual obligations. For example, if you’re in a state that requires $1,000,000 in mold coverage, you might not be getting it if your policy has a mold sublimit of $100,000. InspectorPro’s preferred carrier does not sublimit its insurance policies.
An underwriter is responsible for assigning insurance rates based on the inspector’s insurance application and claims history.
The waiver of deductible endorsement rewards you for using pre-claims assistance. To qualify, you must report your pre-claim or early reported incident (ERI) in writing, including:
- Name of potential claimants, including addresses and phone numbers
- Date you first became concerned of a potential mistake
- Explanation of potential “damages”
- Details of any remediation available
- Other pertinent information that will provide additional details or clarify
Once reported, you agree to work with pre-claims assistance to prevent the incident from becoming a claim. If, after using pre-claims assistance, the ERI still becomes a claim within a year of you reporting it, the insurance carrier will waive 50 percent of your deductible.