TO AMEND THE LAW CONCERNING INSURANCE REQUIREMENTS FOR LICENSED HOME INSPECTORS.

2025 Regular Session Introduced by Lincoln Barnett and 1 co-sponsor

Act 974 requires Arkansas home inspectors to carry at least $100,000 in professional liability insurance, boosting consumer protection against inspection errors.

Notification that HB1625 is now Act 974

Purpose and Intent

House Bill 1625, now known as Act 974, aims to amend the existing insurance requirements for licensed home inspectors in the state of Arkansas. The primary intent of this legislation is to ensure that home inspectors maintain adequate professional liability coverage, thereby enhancing consumer protection and accountability within the home inspection industry.

Key Provisions

The bill introduces several important changes to the insurance requirements for home inspectors:

Insurance Type:

Home inspectors are now required to carry either a professional liability insurance policy or an errors and omissions insurance policy. This replaces the previous requirement for general liability insurance.

Coverage Limits:

The minimum coverage limit for these insurance policies is set at $100,000. This ensures that home inspectors have sufficient financial backing to address potential claims arising from their inspections.

Approval Requirement:

The insurance policies must be approved by the Arkansas State Insurance Department, ensuring that the coverage meets state standards.

Affected Parties

Home Inspectors: All licensed home inspectors in Arkansas will be directly impacted by this legislation, as they will need to adjust their insurance policies to comply with the new requirements.

Consumers: Homebuyers and property owners will benefit from increased protection, as the new insurance requirements are designed to safeguard their interests in the event of negligence or errors in home inspections.

Fiscal Impact

According to the Fiscal Impact Statement prepared by the Arkansas Bureau of Legislative Research, there are no additional costs anticipated for the Arkansas Insurance Department as a result of this bill. This suggests that the implementation of the new insurance requirements will not impose a financial burden on state resources.

Legislative Timeline

Introduced: February 27, 2025

Amendment Adopted: March 13, 2025

Passed by House: April 10, 2025

Passed by Senate: April 16, 2025

Enacted as Act 974: April 22, 2025

The bill underwent a series of readings and amendments before being passed by both the House and Senate, culminating in its enactment as Act 974.

Conclusion

House Bill 1625 represents a significant update to the insurance requirements for licensed home inspectors in Arkansas. By mandating professional liability or errors and omissions insurance, the legislation aims to enhance consumer protection and ensure that home inspectors are adequately insured against potential claims.

Bill