Below is my reprint from Homeone forum:
The first standard I quoted is for building inspections
Yes there is liability for negligence for any inspection that inspector does.
However you have got to remember that if there is significant defect during construction, builder is responsible whether it is discovered or not. So if your inspector misses a significant defect your builder still has to fix it and the measure of damage against inspector is your loss in him not picking it up earlier. Perhaps proper value of loss is refund of inspection fee but every case is different.

Lot of people misunderstand the nature of PI. It is not insurance against everything, its against negligence.
So if your inspector performed dilligent inspection but something is hidden from him its not negligence. If he should have looked under sub floor but did not its negligence.
Similarly if your inspector has given you a considered advice he may not be negligent if the advice turns out to be wrong or if it turns out that it could have been better.

Make sure your inspector has PI
Satisfy yourself about qualifications, experience, track record, equipment, references
If you want a cheap inspection dont complain you are sailing on a cheap boat.