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Legal Updates for Real Estate E&O Liability

Florida Legislative Update: Proposed E&O Insurance Requirement for Home Inspectors

Legal Updates for Real Estate E&O – February 2026

February 5, 2026

by Holly M. Hamilton

New Florida legislation, if enacted, would require licensed home inspectors to maintain errors and omissions (E&O) insurance as a condition of licensure. While Florida has long regulated the home inspection profession, the state has historically not required professional liability insurance for inspection errors or omissions.

Florida home inspectors are regulated under Part XV (titled “Home Inspections”), of Chapter 468, Florida Statutes. Section 468.8322, Florida Statutes, currently requires licensed home inspectors to maintain commercial general liability insurance of at least $300,000, but it does not require home inspectors to carry E&O insurance.

Without a statutory requirement, Florida home inspectors have had the ability to voluntarily acquire E&O insurance. According to a 1994 study conducted by the Florida House of Representatives, only 30% of responsive licensed home inspectors carried E&O insurance. When inspection disputes and litigation regarding home inspection errors arise, this often leads to other real estate professionals paying the price. As a result, buyer’s agents, listing agents, real estate companies, title agents/companies, and brokers often find themselves defending various claims of negligence, breach of fiduciary duty, a failure to disclose material information, and related allegations that are premised on inspection issues.

When an inspector lacks E&O insurance, plaintiffs’ counsels tend to view the inspector as a limited recovery source and, instead, pursue the insured real estate professionals, whose E&O policies provide a clearer path to recovery. Even where the professionals had no control over the inspection itself, they often incur substantial defense costs simply by being named in a lawsuit as a related. In practice, this dynamic often shifts inspection-related liability away from the inspecting professional and toward transaction participants with mandatory E&O coverage.

Florida Senate Bill 360 (2026), titled “Home Inspectors,” has been introduced to the senate as of January 13, 2026, and is currently under committee consideration. Bill 360 provides an update to Section 468.8322, Florida Statutes, so that licensed home inspectors will be required to maintain both a commercial general liability policy and an E&O policy in the amount of $500,000 per policy. If enacted, it would take effect July 1, 2026.

A statutory E&O requirement for home inspectors could materially alter the litigation landscape. With mandatory professional liability coverage, home inspectors would be more likely to be named as primary defendants in claims arising from inspection errors or omissions.

Florida’s consideration of an E&O insurance mandate for home inspectors reflects growing attention to professional liability within residential real estate transactions. For real estate professionals, the proposal signals a potential rebalancing of inspection-related risk and underscores the importance of continued risk management practices, even as responsibility for inspection errors is more squarely aligned with the professionals who perform them.

Legal Update for Real Estate E&O – February 2026, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2026 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact MEDeSatnick@mdwcg.com.

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