The Importance of E&O, Professional and Public Liability Insurance for Inspectors

In today's litigious environment, there is an ever-growing tendency to include anyone and everyone who was involved in an incident in any lawsuit that may arise from that incident.

For example, in a small European city, an inflatable slide collapsed and a few children were hurt. The claim that was filed by the children's parents included the owner of the lot on which the inflatable was set up, the person who rented the inflatable for the event and the slide manufacturer in regard to their instructions for setting up the equipment.

Also included in the claim were the city council, which licensed the hirer, but did not inspect the setup, and the inspector, who did not give clear instructions regarding the safety measures to be taken.

Regardless of the court's decision in this case, the inspector was the person involved who most needed protection. His expenses in this case were covered by his Professional Liability policy.

Inspectors, regardless of their field of specialization bear great responsibility, to their employers, their clients, their professional organizations and the city, county and state or country in which they work.

No matter what field an inspector works in, he must be able to make knowledgeable, reliable recommendations. These recommendations can affect the inspector's clients financially and/or physically (as in the case of a home inspector missing something during an inspection). An inspector's recommendations can also affect third parties (as in the case of Amusement Ride Inspectors).

Of course, inspectors, whether they are self-employed, employed by inspection companies, or by city, county or state agencies, are in the end responsible to the public in general for their work.

Inspectors, of course are human beings, and mistakes of commission and omission do happen, and when they do, inspectors may find themselves professionally liable and exposed to either civil suits, criminal suits, or possibly both. It is for this reason that not only is it wise for inspectors to hold Professional & Public Liability and E&O Insurance policies, but in most countries they are also required by law to do so.

It is critical that inspectors keep precise and detailed records, and document the responses and remarks of the other participants in any inspections they perform. Inspectors should always be sure to get the signature of those being inspected on any instructions they have given, or any comments that they have made. It is most important to document any lack of cooperation that they have encountered during any inspection, and, where necessary, refuse to sign off on an inspection or issue reports until they receive complete compliance.
In addition, inspectors, like other people in the modern work place should also be sure to protect themselves from unpleasant situations that may arise between them and other people or coworkers, which may arise in the course of their day-to-day interactions.

This is why inspectors should ascertain that their Professional & Public Liability and E&O Insurance policies also include the following:

• Legal and other claim-related expenses
• Legal defense against allegations of abuse, assault and sexual (gender) misconduct
• Legal defense against allegations of discrimination

It is important for inspectors to extend their coverage to include Retroactive Dates, and also extend coverage to cover future claims resulting from occurrences happening during the period of insurance. While these extensions affect the premium rate, it is not a big expense and may prove to be to the inspector's advantage in the long run.

In addition, inspectors who are in business for themselves as Inspection Office Owners should consider extending the policy's coverage to include their employees (professional inspectors – employees or subcontractors and administrative employees – such as secretaries etc.).

Remember – even though inspectors may feel professionally sure of themselves, and may be vindicated at the end of a legal enquiry, the very fact of their involvement in a legal process may be enough to jeopardize their reputation and career.

E&O and Professional and Public Liability Insurance for Inspectors provides protection and peace of mind.

(Joel Block is a Liability Insurance Customer Service Officer at Sinclair Insurance Company)

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