Mike McLean June 12, 2024 8 min read

What Does Home Inspector Insurance Cost?

A home inspector is standing with a hardhat on their head and a flashlight in their hand. They're probably searching for what home inspector insurance costs.

You may think that home inspector insurance costs are just additional business expenses you don’t need. But, as someone crawling into unknown and old homes, have you ever thought about the cost of not having insurance?

Consider this: The cost of insurance can make all the difference between growing a successful business and having your professional ambitions jeopardized because of a mistake or injury.

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Home inspectors have a massive responsibility that requires tremendous attention to detail. After all, clients put a lot of trust in home inspectors to provide accurate information about a home they want to purchase. But even the most seasoned professional home inspector isn’t immune to making mistakes, which is where insurance comes in: to protect against costly claims.

In this guide, we’ll go over everything that you need to know about home inspector insurance costs, including rates, factors that affect pricing, and tips on how to keep home inspector insurance costs down.

Who Needs Home Inspector Business Insurance?

No one intentionally goes out of their way to make errors in their work. Well, most people.

But mistakes happen, and a simple oversight can spell financial and legal difficulties for a home inspector. That’s why any professional home inspector, or anyone providing other general or specialized inspection services, needs to have protection in the form of business insurance. 

It’s important to note that in some states, having insurance is a legal requirement for working as a home inspector. For example, according to the American Society of Home Inspectors, home inspectors in Nevada must have at least $100,000 in both professional liability and general liability insurance. And in Kentucky, licensed inspectors must carry at least $250,000 in general liability insurance. 

Regardless of whether your state requires home inspectors to have insurance, the risks remain, which is why all home inspectors, no matter the location, need coverage for their most common risks.

Common Types of Insurance Claims for Home Inspectors

Here are a few examples of the types of claims home inspectors may encounter.

Scenario 1

You’re hired to inspect an older home. Aside from minor and easy-to-fix issues, the inspection goes as planned without any major flags so the client goes ahead with the house purchase. During a renovation soon after moving in, the client finds out that the insulation in the attic is actually asbestos, which you had misidentified. The client sues you for failing to identify the problematic insulation.

There’s no need for an accidental oversight to financially derail your business. Having professional liability insurance means you’re covered for settlements and defense costs regarding claims of errors, omissions, negligence, or breach of contract.

Scenario 2

While inspecting a wall vent in a home, you lose your footing and fall, bumping into a large vase. The vase falls off its stand and is damaged beyond repair. As the vase was a valuable family heirloom that cannot be replaced, the homeowner sues you for damages.

Though rare, accidents can happen during a home inspection that lead to unintended damages. The good news is that if you have general liability insurance or a business owners policy, your home inspection business is covered for any property damage or bodily injury claims.

Scenario 3

Your home inspection business becomes the victim of a ransomware attack. In order to regain access to your business’s data, you’re given a deadline to pay a ransom amount. You’re informed that failure to pay the ransom amount on time will result in the release of confidential client information.

All businesses are at risk of a cyber attack. While many small business owners don’t think they’d ever be the target of a cyber incident, a Verizon Data Breach Investigations Report found that small businesses are a prime target for cybercrimes and account for 43% of all data breaches. With cyber liability insurance, your home inspection business is protected from the costly ramifications of a cyber incident. Cyber liability insurance will typically cover costs associated with notifying affected clients, credit monitoring for victims, investigating the cause of the incident, ransom payments, and civil damages. 

What Does Home Inspector Insurance Cost?

Understandably, cost is a crucial factor when purchasing insurance. Below are the average home inspector insurance costs for foundational coverages. However, several factors influence the cost of an insurance policy (we’ll get into that in a bit), and your business may pay more or less than what’s included below.

Professional Liability Insurance

Also known as errors and omissions (E&O) insurance, professional liability insurance is crucial for any home inspector because it will protect your business against claims of errors, mistakes, breach of contract, or negligence.

According to AdvisorSmith, the average cost of professional liability insurance is around $1,000 per year. That amount is based on a small business with less than $500,000 in revenue and limits of $1 million.

General Liability Insurance

Considering the nature of working as a home inspector, when accidents happen, they’re likely to occur on someone else’s property. That’s why all home inspectors need general liability insurance, since it covers third-party property damage, bodily injury, or personal injury.

The average cost of a small business general liability policy is approximately $600 annually

Business Owners Policy

If you’re looking to purchase both general liability insurance and commercial property insurance, then it’s worth considering a business owners policy (BOP).

A BOP is a cost-effective bundle of three core insurance policies. The general liability portion covers risks like third-party injuries, while the property and business interruption insurance protects your business property (buildings, equipment, etc.) and loss of income if you have to temporarily shutter the business. 

The cost of a BOP is around $1,000 per year. Purchasing individual general liability and property insurance policies will probably mean paying about 10% more than with a BOP.

Cyber Liability Insurance

Considering that cybercrime will cost companies worldwide an estimated $10.5 trillion annually by 2025, cyber insurance is a must-have for any business. Cyber liability insurance covers financial losses due to data breaches and other cyber-related incidents. 

According to a study by AdvisorSmith, as of 2021, premiums for cyber insurance ranged from $650 to $2,357, with the average annual cost being $1,589 (or $132 per month).

Commercial Auto Insurance

Since most personal auto insurance policies don’t cover business-related accidents and incidents, you’ll want commercial auto insurance to cover you when you’re on the road to inspections. Commercial auto insurance provides financial protection if you or an employee is at fault in an accident. It also covers losses due to theft, vandalism, certain weather events, and collisions.

The average cost of commercial auto insurance for small businesses is approximately $1,916 per year (or $160 per month), but there is a substantial amount of variance with this coverage.

Additional Coverages

What Impacts Home Inspector Insurance Costs?

As we mentioned earlier, numerous factors go into determining how much home inspectors will pay for insurance. Understanding the factors that affect home inspector insurance costs will help ensure you’re able to provide any insurer with accurate information to get a quote.


Where you do business will affect the cost of insurance. That’s because requirements and risks differ by location. Businesses in states with minimum coverage requirements may pay more for insurance.

Annual Revenue 

Be ready to show any insurer proof of your revenue for at least the past three years. Revenue has a straightforward impact on insurance premiums: The more income your business brings in, the more potential risk (aka lawsuits) it faces.

Number of Employees 

Unsurprisingly, the more employees you have, the more you’ll need to spend to insure all of them. Not to mention, the more employees you have, the greater the chance that one of them will make a mistake.

Years of Experience 

Often, experienced professionals and well-established companies will pay smaller premiums. That’s because insurers typically view the number of years in business as a positive reflection of the service quality.

Claims History 

This is a fairly obvious factor. A business with several past claims will pay more for insurance than a business that has never filed a claim.

Insurance Limits 

Insurance limits, which are the maximum amount that an insurer will pay for covered losses or damages under a policy, significantly impact your premium. The greater your insurance coverage limit, the more you’ll pay. 

How to Keep Home Inspector Insurance Costs Down?

Everyone likes to save money when and where possible. Just because insurance is vital to your home inspection business doesn’t mean it should be a financial drain. There are ways to help keep home inspector insurance costs reasonable while maintaining essential protection.

Reduce Your Risk

The best way to lower home inspector insurance costs is to prioritize risk management. Creating an effective risk management program is a proactive way to prevent claims and losses from happening. Insurers often reward businesses that focus on risk management. Plus it’s just good for business. Investing in safety measures, regular property maintenance, and employee training are ways that your home inspection business can work to reduce risk.

Pay Premiums In Advance

Paying your insurance premiums in advance is an easy way to find significant savings. Most insurers offer discounts if you pay your annual home inspector insurance costs upfront rather than month-to-month.

Increase Deductibles

This is a tricky one. Sure, raising your deductible can lower upfront home inspector insurance costs, but that only means you’ll have to pay more out of pocket if something happens. Raising your deductibles should be a last resort option for lowering home inspector insurance costs. If you do go this route, make sure you don’t settle on a deductible that you’ll have trouble covering if a claim is filed.

Eliminate Unnecessary Coverage

Consider the coverage that your home inspection business actually needs. The key word there is needs. Take the time to carefully research your insurance requirements to ensure you have the right amount of protection without overpaying.

There’s no home inspector insurance cost is a major consideration when working through your business expenses. While insurance is an additional expense for your home inspection business, leaving your business financially vulnerable when something inevitably happens will end up costing you significantly more. 

Want to learn more about insurance for your home inspection business? Reach out to one of our expert brokers to chat about the insurance policies that suit the needs of your business.

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