Texas - Is it true?

I read on another boardthat a provision in your new law actually requires the home inspector to purchase E&O insurance that will cover the used house salesman that refers him.

Is this true?

Haven’t seen that one. But that’s not to say it ain’t there.

the verbage is:
(3) offers proof that the applicant carries liability insurance with a minimum limit of $100,000 per occurrence to protect the public against a violation of Subchapter G.

Subchapter G deals with negligence.


Chapter G includes the current Standards. They are very poorly written and impossible to comply with. The law can be easily interpretted to imply any miss by an inspector will be paid for by insurnace. It is unclear if limitations will be permitted between client and inspector. You can be sure realtors will say “Oh, the inspector has insurance” to everyone.

The future of home inspection is expert witness work and education of inspectors.

No, referring party indemnification is not required. Where the writer of that post is causing the confusion is that many E&O policies provide referring part coverage as a benefit but it is not required by the new law. He is simply seeing it in the policies he is reviewing and taking exception to it, and rightfully so I might add.

I think we need to stand up tall and proud and protect the poor realestators that work so hard to get a sale. We need to give them all the protection we can. Remember JFK’s famous words - “Ask not what the realestator can do for you or the buyer, but ask what you can do for your realestator”.

No greater love for their fellow man is the home inspector that takes a silver bullet to protect his realestator.

Gosh, that sounds noble. I almost believe this hogwash.

Actually I really love some of my local Realtors to death. For instance there is this one in particular - 5’10", blonde, short skirts, tight low cut tops, a fantastic personalities (38-24-36).

Wish they were all so personable and intelligent.

FYI, Gov. Perry did not sign the bill and did not veto it, so it became law.

From the website of Gov. Perry: (I bolded the words - BT)

Message - June 15, 2007

The purpose of SB 914 is to continue and improve the functions of the Texas Real Estate Commission. A provision in the bill requires all real estate inspectors to purchase liability insurance. This mandate is a financial burden on small and independent inspectors who will be out of pocket more than $1,300 a year and will most certainly pass the cost onto consumers. The legislature did not properly consider the effects this will have on the market, and how it will make the American Dream more expensive. At the same, I couldn’t justify the elimination of a vital regulatory agency despite this onerous clause.
I encourage the Legislature to rethink this requirement and address this problem in 2009.
IN TESTIMONY WHEREOF, I have signed my name officially and caused the Seal of the State to be affixed hereto at Austin, this 15th day of June, 2007.
Governor of Texas
Secretary of State

I sent him a personal letter addressing this issue. I hope others did as well. I don’t know what can be done to be re-addressed 2 yrs from now. But I think we should try.


E&O for $1300 a year? Where can we get it at that rate?

Let’s call the “guv” and ask.:smiley:

FYI! Link to this at:


I agree, I would certainly like to have that $1300 E&O package.

Perry got that premium amount from the moron who authored the insurance requirement. Just imagine the conversation.

Bill Sponsor: How much does that insurance cost?
Moron: My company offers, oh I mean, my extensive research revealed that liability insurance premiums average around $1300.
Bill Sponsor: Ok, but isn’t this supposed to E&O insurance?
Moron: No see right here is says liability.
Bill Sponsor: Perfect

The side conversation with TREC could have gone something like this.

TREC: We need even more control over the big bad inspectors. There are too many out there who are killing our deals.
Moron: Ok let’s make them have E&O insurance that will drive up the cost of business and many will have to get out of the business.
TREC: That sounds great but what about the inspectors who can afford it? We still need to control them.
Moron: No problem, making the Inspector Committee advisory only should take care of that.
TREC: Oh right, but your verbiage states liability insurance.
Moron: Well we call it that so we can get it past the legislature. Then once it is law, the general counsel can issue a finding to clarify the meaning.
TREC: Perfect

Probably pretty accurate!

:mrgreen: :mrgreen: :mrgreen:

LOL! Great comments y’all.