A new Pennsylvania law requires all licensed home inspectors to carry professional liability insurance—and most don't know it's coming.
Most Pennsylvania home inspectors have never heard of it, but buried in HB2645 is a requirement that will affect every inspector's bottom line: you must carry professional liability (errors and omissions) insurance as a condition of holding your license.
Here's what the law actually says and what it means for your business.
Under Section 599.1(i) of HB2645, every licensed home inspector in Pennsylvania must maintain professional liability insurance with minimum coverage of $250,000 per claim and $500,000 aggregate (total per year). This isn't optional. It's a licensing requirement—the same category as your exam or your application fee.
The law also requires general liability insurance, though the bill does not specify minimum amounts for that coverage in the sections addressing home inspectors.
This is a direct, recurring cost. You'll need to purchase a policy, renew it annually or as your policy term requires, and maintain proof of coverage. If your coverage lapses, your license status is at risk.
Any individual or firm holding a home inspector license in Pennsylvania must comply. This includes sole proprietors, small firms, and larger inspection companies. If you're licensed, you're covered by this rule.
The requirement does not apply retroactively to licenses already issued—but it will apply when you renew.
The law takes effect two years after enactment (per Section 11(2) of HB2645). That gives you a window to plan, but the clock is running. The State Real Estate Commission is required to issue regulations within 18 months of enactment (Section 10), so the specific rules—what policies qualify, how to prove coverage, renewal procedures—will be defined before the law goes live.
Check with the Pennsylvania State Real Estate Commission for the exact enactment date and the regulatory timeline.
Start conversations with your insurance broker or agent. E&O policies for home inspectors exist, but they vary in cost, coverage details, and underwriting. Getting quotes now—even though you have time—helps you understand the expense and plan for it in your budget.
Some inspectors may already carry E&O insurance voluntarily. If you do, review your policy to confirm it meets the $250,000/$500,000 floor. If it doesn't, you'll need to upgrade.
Keep an eye on the State Real Estate Commission's website for the final regulations. They'll clarify exactly what documentation you need to provide and when.
This is a real compliance requirement with real costs. It's not a suggestion. Plan ahead.
For a detailed, business-specific guide to HB2645's home inspector provisions, including insurance options and renewal compliance steps, contact your local business association or the Pennsylvania State Real Estate Commission.