HouseMaster

The HouseMaster franchise disclosure document requires four core coverages. General liability at $1,000,000 per occurrence, including products and completed operations and personal and advertising injury, and $2,000,000 aggregate. Auto liability at a combined single limit the franchisor specifies, up to $2,000,000 but no less than $1,000,000. Workers' compensation where state law requires it. And errors and omissions insurance — the coverage for professional mistakes — at $500,000 per claim and $1,000,000 aggregate, plus cyber liability at $500,000.

The named insured on your certificate is your own legal business entity. HouseMaster SPV LLC must be named as an additional insured, with a waiver of subrogation, and your coverage must apply as primary and non-contributory — your policy responds first, before any coverage the franchisor carries. Combined single limit means one auto limit applies to any mix of bodily injury and property damage in a single accident. Every policy must come from a carrier rated A.M. Best A-VIII or better.

That is what the agreement establishes. Here is what a home inspection business actually faces — starting with the claim that defines this trade.

The franchisor entity is HouseMaster SPV LLC, a Delaware limited liability company with its principal place of business at 1010 North University Parks Drive, Waco, Texas 76707. It is part of the Neighborly family of home-service brands. The 2025 franchise disclosure document, Item 8, sets out the following required coverages.

General Liability at $1,000,000 per occurrence and $2,000,000 aggregate, including products and completed operations and personal and advertising injury. General liability covers accidental bodily injury and property damage you cause during your work — not professional mistakes. That distinction matters more for an inspector than for any other home-service trade, and the next section explains why.

Commercial Auto Liability at a combined single limit the franchisor specifies, up to $2,000,000 but no less than $1,000,000, on each owned, non-owned, or hired vehicle used in the business.

Workers Compensation if required by state law, at the minimum coverage state law requires. Workers' compensation pays an injured employee's medical bills and lost wages. Its sister coverage, Employers Liability, responds when an injured worker sues the employer claiming the employer's negligence contributed to the injury.

Errors and Omissions (E&O) Liability at $500,000 per claim and $1,000,000 in the aggregate, for bodily injury resulting from services performed, covering all inspections and services. This is a required coverage in the HouseMaster FDD — not a recommendation. The FDD goes further: it requires prior acts coverage for all past inspections, and an E&O Tail extending at least three years after the agreement ends, expires, or transfers. If you fail to buy the tail within 30 days of termination, the FDD imposes a fine equal to the greater of $10,000 or the cost of the tail.

Cyber Liability at not less than $500,000 per occurrence and in the aggregate, for financial losses from unauthorized access, data loss or corruption, privacy and data-security breaches, misdirected funds, virus transmission, denial of service, and loss of income from network-security failures.

All required liability policies must name HouseMaster SPV LLC — and any person or entity with an insurable interest the franchisor designates — as additional insured with a waiver of subrogation. Coverage must be primary and non-contributory. You may satisfy the required limits through an umbrella policy that meets the FDD's terms.

This is the question every HouseMaster franchisee should be able to answer, because the answer is no — and the policy that does answer it is the one the FDD requires for exactly this reason.

General liability covers accidental physical harm: a tech knocks over a vase, a homeowner trips over equipment. A missed defect is different. The home was not damaged by your work. The buyer's loss is financial — they paid for a house worth less than they thought, or they now face a repair the report led them to believe they would not face. That is a professional error, and the standard general liability policy carries a professional services exclusion that removes it. The carrier does not deny the claim because the inspection was careless. It denies it because the loss is professional, not accidental, and a different policy answers professional loss.

That different policy is errors and omissions — E&O — and HouseMaster requires it because the brand understands that the inspection report is the product. When a buyer says "you missed the foundation issue I didn't catch," the report itself is on trial. E&O is the coverage that defends the report, pays the settlement if the report fell short, and keeps the business intact.

Most franchisees buy general liability first and assume it is the big policy. For an inspector, that is backwards. The two policies answer two different kinds of loss, and knowing which is which prevents the most expensive surprise in this trade.

General liability answers accidents — physical injury or property damage that happens because of something you did while present. If your foot goes through a weak attic floor and damages the ceiling below, that is general liability. E&O answers judgment — a financial loss a customer suffers because your professional findings, advice, or report were wrong or incomplete. 

A missed roof defect, a misread electrical panel, an HVAC system you reported as sound that failed within weeks — those are E&O. The trigger is not whether you were careful. The trigger is whether the loss came from your physical presence or from your professional opinion.

HouseMaster's FDD requires both because an inspection generates both kinds of exposure on the same job. You are physically inside the home, on the roof, in the crawlspace — general liability territory. And you are issuing a written professional report a buyer will rely on to spend hundreds of thousands of dollars — E&O territory. A franchisee who carries strong general liability and a thin E&O policy has armored the smaller risk and left the larger one exposed.

Errors and omissions is almost always written on a claims-made form, and that single fact creates the most dangerous, least-understood gap in this trade. The HouseMaster FDD addresses it head-on — and most franchisees still get it wrong at renewal.

A claims-made policy covers a claim only if two conditions are met: the claim is made against you while the policy is active, and the inspection happened after the policy's retroactive date. The retroactive date is the earliest inspection the policy will reach back to cover. If your retroactive date is January of this year, an inspection you did two years ago is not covered — even though the policy is active today. Compare that to general liability, written on an occurrence form, which covers a loss based on when the event happened, no matter when the claim arrives.

Here is where franchisees lose coverage. When you switch E&O carriers and the new policy resets the retroactive date to today, every inspection you ever performed before that date becomes uncovered. A buyer who sues over an inspection from three years ago has no policy answering for it. This is exactly why HouseMaster requires prior acts coverage — which keeps the retroactive date reaching back to your first inspection — and the three-year E&O Tail after the agreement ends, which keeps a policy in force to catch claims that surface after you stop inspecting. The fine for skipping the tail is the greater of $10,000 or the tail's cost, because the franchisor knows a lapsed retroactive date is how an inspector ends up personally exposed.

Inspectors work in older homes full of materials the report touches but the policy may not cover. Mold in a crawlspace, radon below a slab, asbestos in old insulation, lead paint on original trim — a buyer who later discovers one of these can argue the inspection should have flagged it. Whether that claim is covered depends on the fine print of the E&O policy, and the standard form often pushes back.

Many E&O policies carry a fungus, mold, or pollution exclusion that removes claims arising from environmental hazards unless the policy specifically adds them back. So a buyer's claim that you missed the mold can be excluded by the same E&O policy that would have covered a missed structural defect. The work looked identical to you — a visual inspection of an older home — but the coverage outcome splits on whether your policy carved out environmental claims.

The protection is to read your E&O for environmental and mold exclusions and to scope your inspection agreement honestly. HouseMaster franchisees who offer radon or mold testing as a separate service especially need to confirm those services are inside the E&O grant, not outside it. The fix is endorsement and disclosure: add environmental coverage back where the policy excludes it, and make clear in your inspection contract what the standard inspection does and does not assess.

For all the focus on the report, a HouseMaster franchisee is also physically present in the home — on the roof, in the attic, at the electrical panel, in the crawlspace. The forensic review of this brand confirms inspectors access roofs and attics at height and work near live electrical systems. That is real bodily-injury and property-damage exposure, and it is where general liability earns its place in the stack.

If you step through a ceiling, crack a tile walking a roof, or trip a breaker that damages a connected system, that is accidental property damage — squarely the kind of loss general liability is built to pay. The exposure is modest compared with a missed-defect claim, but it is frequent, and it is the part of the inspection day where you can hurt yourself or the home directly. This is also why the FDD requires workers' compensation where state law applies it: an inspector who falls from a roof or a ladder is an injured worker, and workers' compensation pays the medical bills and lost wages while employers liability answers any lawsuit that follows.

The protection is to confirm your general liability has no exclusion for at-height work or for damage to the property you are inspecting, and to confirm your workers' compensation correctly classifies inspection work. The fix is inexpensive relative to the exposure: a general liability policy written for an inspector who actually climbs and crawls, not one assuming a desk-bound consultant.

Your premium depends on your state, your inspection volume, your payroll, your services, and your claims history. What you can control is understanding how the number is built — and which part of it can change after the policy year ends.

General liability and workers' compensation are both auditable. An audit is the carrier's year-end review that compares what you estimated when the policy started against what actually happened, then adjusts the premium up or down. It can move either direction — overestimate, and you get money back.

General liability for an inspection business is usually rated on gross receipts — a rate per $1,000 of revenue — and inspection work sits at the lighter end of the contractor scale because there is no installation or physical construction. Workers' compensation, where it applies, is rated on payroll: payroll divided by 100, multiplied by your state's rate for each class code, multiplied by your experience modification, a factor based on your claims history. The per-$100 rate is set by your state's rating bureau — the National Council on Compensation Insurance (NCCI) in most states — not by the carrier. The carrier applies the bureau's rate.

Errors and omissions is different — it is generally not payroll- or revenue-audited the same way. It is priced on number of inspections, services offered, limits, and your loss history, and the premium is usually set up front. That is why E&O does not surprise you at audit the way general liability can.

A worked example on the general-liability side. Say you estimate $90,000 in inspection revenue when the policy starts — reasonable for a solo HouseMaster operator getting going. You add a second inspector and a commercial-inspection line and close the year at $210,000, a $120,000 difference. If your general liability is rated at roughly $4 per $1,000 of revenue — light, because inspection is a low-physical-hazard class — the audit adds about $480 in premium. The general-liability adjustment is small; the bigger driver of your total cost is the E&O limit you choose.

HouseMaster's FDD is unusually strong on the coverage that matters most here — it requires E&O, prior acts, a three-year tail, and a $500,000 cyber policy. The gaps are in limits, endorsements, and the coverages the FDD leaves silent. The recommendations below are Rikor's baselines, calibrated for a newer franchisee and scaled by inspection volume, revenue, and services. A solo residential inspector and a multi-inspector firm doing commercial work sit at different points on every line.

Errors & Omissions above the $500,000 minimum. The FDD floor is $500,000 per claim. For a brand whose largest claim is a missed-defect lawsuit, Rikor's benchmark for Contractors and Inspectors E&O is $1,000,000 per claim and aggregate — and many commercial and brokerage accounts will require it. 

Raising the limit is the single most important coverage decision a HouseMaster franchisee makes, because it is the limit on the loss that can end the business. Confirm prior acts and the three-year tail are in place on every renewal so the retroactive date never resets.

Environmental and mold coverage inside the E&O grant. Confirm your E&O does not carry a broad fungus, mold, or pollution exclusion that would block a missed-mold or missed-environmental claim. Add the coverage back by endorsement, especially if you offer radon or mold testing as a separate service.

Employers Liability at $1,000,000. The FDD requires workers' compensation but does not state separate employers-liability limits. Employers liability responds when an injured inspector sues the employer for negligence after a fall or electrical injury. Rikor's benchmark is $1,000,000 each accident, each employee, and policy limit.

Commercial Crime at $250,000, third-party, Loss Discovered form. Inspectors enter homes and have access while they work. The FDD is silent on crime. General liability does not cover employee theft. Rikor's benchmark is a third-party commercial crime policy at $250,000 with a theft-of-customer-property endorsement, on a Loss Discovered form, which covers a theft found during the policy period even if it began earlier.

Cyber — verify the required $500,000 includes social engineering. The FDD already requires $500,000 of cyber, so it is in your stack. Inspectors handle buyer and seller data, scheduling, and payment in digital systems. Confirm the policy includes social-engineering and funds-transfer-fraud coverage, since fraud-induced wire transfers are the most common small-business cyber loss.

EPLI at $250,000, scaling with headcount. The FDD does not require employment practices liability. Once you employ inspectors and office staff, an employment claim — wrongful termination, discrimination, harassment — is a real exposure general liability does not touch. Rikor's baseline is $250,000, scaling up past roughly 10 employees or $750,000 in revenue.

Inland Marine for inspection equipment. Your auto policy covers the van, not the moisture meters, thermal cameras, drones, and testing equipment inside it. Inland marine — an equipment floater — covers that gear in transit and on site, on an actual cash value basis. Size the limit to the equipment you actually carry; there is no universal number.

Umbrella — reason from your worst realistic loss. The FDD lets you use an umbrella to satisfy required limits but does not separately require one. Whether you need a true excess layer is a severity question. The inspector's worst realistic loss is usually a large missed-defect claim, and that severity lives on the E&O policy, where raising the E&O limit is often the better first move than buying umbrella, since a standard umbrella does not always sit over E&O. An umbrella becomes relevant for the general-liability and auto side as you add inspectors and vehicles, take commercial-property inspections, or face accounts requiring $2,000,000 certificates. Reason from your actual work: the report is where your largest exposure lives, so fund the E&O limit first, then add the umbrella for the physical-side severity as your operation grows.