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Senator presents bill to require professional liability insurance for home inspectors; commission seeks cost data
Summary
Sen. Serville presented draft language that would require home inspectors to carry professional liability insurance and prevent them from disclaiming smaller liability amounts; commissioners asked staff to gather cost and market-impact information from other states.
Senator Serville (presenting a draft bill) told the Virginia Housing Commission he is sponsoring legislation that would require home inspectors to carry professional liability insurance in addition to general liability coverage, and would prohibit inspectors from disclaiming liability in amounts lower than the required insurance coverage.
“I believe that's what the staff came up with, which is what I had suggested,” Serville said, arguing the change would address instances where limited liability disclaimers undermine consumer protection. He added that some home-inspection services can mislead consumers about the scope of work.
Commissioners asked practical questions about the potential insurance cost impact and market effects. “My primary question … what is the additional cost associated with professional liability coverage versus just general liability coverage?” asked one member. Serville said there is no clear estimate now and that actuarial adjustments would likely follow any statutory change because claims history data are limited when liability caps are low.
Commission staff were asked to: (1) research other states that require professional liability insurance for home inspectors and report cost and market impacts; and (2) prepare a full bill draft for the full commission’s December meeting. The chair confirmed the commission will revisit the item in December and determine whether to endorse the proposed legislation.
No formal vote on the bill occurred at the Oct. 24 meeting; commissioners asked staff and interested stakeholders to supply comparative data and market impact information before formal consideration.
