Builder wants to be listed as additional insured on E&O

This afternoon I received an email from the builder’s secretary stating that that the builder had to be listed on my E&O policy as an additional insured for me to perform the inspection. I meet and exceed all of their criteria for performing new construction inspections and now they are pulling this less than 24 hours prior to the inspection. Has anyone come across this situation? I’ve performed new construction inspections on developments for almost every big builder in Atlanta, but no one has ever requested that I have E&O and list them as an additional insured. The standard requests are credentials, general liability certificate, and sometimes a business license. I think this lady has been misinformed about the insurance requirements. I asked my insurance rep at OREP and he told me that they have not even received this request. I left her a voicemail this afternoon, but she did not return the call. What do you guys think?


I have had that request on my liability ins. But not E&O

Ditto. Having them as an additional insured on the E&O doesn’t make any sense to me.

The want to ride your policy incase they made a mistake.

I think the secretary has the insurances confused. Tell her you can put them as an additional insured on your GL policy, I have done that a few times, but E&O is all yours.

Sounds like a builder trying to make things difficult for the inspector. Of we have never seen that before.:sarcasm:

You are correct. There have been cases where the builder tries to use the private inspection company and or subs to deflect/defer builder E & O issues away from themselves.

Consult your insurance carrier for additional information and costs regarding same.

I’ve ran into builders lately who first want 1 million in coverage, then 2 million. Richmond American told a recent buyer that I needed million dollar coverage on my vehicle to access their development.

I’ve started putting new home walk through clients back into the INACHI “Find an Inspector” system. Dealing with new home developers is past my pain threshold…

Ride in on a horse - Taxie - bike etc

Sounds to me that when a buyer contracts with a builder they should have this issue addressed and the door opened

If not don’t buy the home. What is the builder covering up??

Perhaps some more buyer education is in order


You need to develop an “aggravation surcharge” like I did about five years ago.

please explains your aggravation surcharge

Back in 2002, there was a Realtor/Mortgage broker about 45 miles away who was giving me an inspection a week, sometimes more. The first ten or so he showed up on time. But as we got to know each other, he got later and later, sometimes not even showing up, and his Buyers never showed up. He’s the only Realtor here whose Buyers never came to an inspection. He attributed it to the fact that I don’t speak Spanish (sure wish I did) and that all his Clients were Spanish-speaking, not even ESL. After about six months of useless drives up to Escondido, I started increasing the price on his Clients because I knew there would be wasted time. Eventually I was adding a $200 “aggravation surcharge” whenever he called. All he had to do was say, “This is John Doe” and the starting price was $200. It went up from there. Eventually it got so frustrating that my aggravation surcharge got up to $400. He always paid, never blinking an eye. I just told him that I had to increase my price to cut down on business because I was soooooooooooo busy.

Well, a couple of years later he quit calling. I didn’t miss him at all, but eventually I found out that he was upcharging the cost of the inspection, so regardless of what I charged, he always added $250-$500 to it. Finally one of his Clients called him on the exorbitant fees on the closing statement, and an audit proved that he was upcharging for others’ services (illegal by both state and federal laws) and, sometimes, charging for services that were never even performed. He currently is serving time in the lock-up.

That gave me an idea on how to work with certain other Realtors, such as anyone claiming to be in the Top 10 for their brokerage. I don’t have a lot of respect for Top 10 Realtors because I find that their version of ethics don’t mesh with my version of ethics. Consequently, since July 1, 2007, if they call, or if their Clients call because they found me on the Internet, I tack on a minimum $500 aggravation surcharge. If it’s a Top 10 Realtor from Rancho Santa Fe or Heritage Golf Estates, where the minimum price for a property is a couple of million dollars, I tack on a $1,000 aggravation surcharge. They can take it or leave it, makes no difference to me. I’ve had a few take it, which then makes it worthwhile.

Also since July 1, 2007, for the occasional price shopper who wants to hassle for 30 minutes over $5, I’ll tell them that I have a “hassle” surcharge of $50, which they can take advantage of by keeping me on the phone for just five more minutes. They laugh. Sometimes they’ll book, sometimes they won’t. Makes no difference to me; right now I’m booked at two STANDARD or BASIC inspections a day through the end of the month, and I’ve got a lot of property investors looking for times to take me out for DRIVE inspections.

Also since July 1, 2007, for the occasional price shopper who wants to hassle for 30 minutes over $5, I’ll tell them that I have a “hassle” surcharge of $50, which they can take advantage of by keeping me on the phone for just five more minutes, now this one I will give a try, thanks Russel

Is it Cotter Homes asking for it? I’m glad to see you’ve worked with the builders. How have you managed that without any ICC certs? Most builders wouldn’t let me on the property unless I had ICC certifications.

Nevermind, I see you are ICC certified, it just didn’t show up over at

In many states or realtor associations there are rules about licensed realtors not being allowed to interfere with a home inspection. Find out the rules in your state and then ask the builder for the contact info/license number of the sales agent associated with that house. Then notify the agent of the obvious interference and ask them to make it go away or you will file a complaint. Additional insured on GL policy is a reasonable request but not for the E&O unless maybe when E&O is mandated by the state.

I heard about a guy who moved a fridge and ruined the vinyl flooring, when he turned it in on his GL, the insurance co applied it to his E&O policy which had a higher deductible. I think their angle was that he made an “error” by working outside the SOP. Maybe the builder knows about this angle and wants to cover all bases.

We have a few very small builders that get by with a lot of incorrect installations and don’t know basic code but the larger, reputable builders welcome my inspections, I have saved several from massive disaster, structural issues, missing flashing, disconnected flue pipes, plumbing leaks, condensate leaks and attic stairs held in with finish nails to name a few.

Some builders actually recommend me to buyers even though I also include a thorough cosmetic punch list that probably takes 1-2 guy’s about 1-3 days to correct.

My GL is an integral part of my E&O policy, so it’s really an E&O/GL policy. Maybe that’s what happened there, too.

Yes, the smart builders see the inspection as almost a last “quality control” step and encourage them. I love doing the new homes. :o

Hell, if I ruined a clients vinyl floor I sure has hell wouldn’t turn it in to ANY insurance. I’d tell the client I’ll replace the entire floor prior to them moving in, just pick out the flooring and I’ll have it installed. I guarantee that would be much, much cheaper than a deductible.

Plus the client is happy they got a nice new floor that they picked out.

My GL deductible is $250. I can’t have a brand new floor installed for $250.

You live in CA. :wink:

I can’t buy tea for less than $250 in CA. :stuck_out_tongue: