Licensed home inspectors in Arkansas will now need to carry more specialized insurance coverage following the enactment of House Bill 1625, now designated Act 974. Approved on April 22, 2025, the law amends Arkansas Code § 17-52-318(a) to replace the general liability insurance requirement with a mandate for either a professional liability insurance policy or an errors and omissions (E&O) insurance policy, subject to approval by the Arkansas State Insurance Department.
The statute also sets a minimum required coverage limit of $100,000. This change reflects a move toward more tailored insurance protections aligned with the specific risks associated with professional home inspections.
Previously, all licensed home inspectors were required to carry general liability insurance. Under the new law, inspectors must now maintain a policy that directly addresses the potential legal and financial exposures that arise from their professional services.
“This change modernizes the coverage requirements and aligns with industry expectations,” noted one regional compliance manager. “It gives both inspectors and their clients stronger protections where they matter most.”
This regulatory update is poised to impact both insurance providers and distribution partners across the state. Insurers offering coverage to home inspectors must ensure that their E&O and professional liability products meet the state’s approval criteria. Brokers will play a critical role in advising inspector clients on policy transitions and ensuring timely compliance.
Operationally, inspection businesses may need to modify their insurance procurement processes and documentation to align with the new requirement. There may also be short-term demand surges for qualifying policies.
Act 974 is now enacted, though it does not specify a delayed effective date or grace period in the statute text. Stakeholders should expect further implementation guidance from the Arkansas State Insurance Department, particularly regarding any transitional provisions for currently licensed inspectors.
