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Committee clears bill requiring professional (errors-and-omissions) insurance for home inspectors
Summary
Lawmakers approved a consumer-protection bill that would replace a general-liability insurance requirement for home inspectors with professional liability (errors-and-omissions) insurance, after lawmakers heard testimony that general-liability policies frequently do not cover inspection errors.
Representative Lincoln Barnett told the House committee that House Bill 16 25 replaces an existing statutory requirement that home inspectors carry general liability insurance with a requirement for professional liability insurance (errors and omissions) because general liability policies often do not provide coverage for inspection mistakes.
Barnett cited two local cases in which homeowners who bought houses after inspections later discovered major electrical or foundation defects; insurers denied coverage for the inspection errors under general-liability policies, he said. He said professional liability policies would better match the risk the statute intended to cover.
Committee members asked about availability and cost of professional liability policies. Jimmy Harris of the Arkansas Insurance Department testified that professional-liability policies for contractors are filed and available in the state. Representatives and witnesses said availability appeared adequate; members discussed potential modest cost increases but heard that the industry did not report formal opposition.
Representative Barnett said the bill does not remove the practical need for general liability coverage for premises and operations; rather the statute should require the specific professional coverage that compensates for inspection errors. After questions and comments, the committee passed the bill by voice vote.
Ending: Committee members advanced the bill to the House floor; sponsors said it would close a statutory gap and better protect consumers who rely on home inspections.
