New Jersey

and I found this, consistent with your early statement:

'Home buyers are generally precluded from asserting negligence claims against licensed home inspectors. However, home buyers are not left without any recourse. The Home Inspection Professional Licensing Act requires all licensed home inspectors to provide home buyers with a written pre-inspection agreement no later than one business day after the appointment for the home inspection is made, and the pre-inspection agreement shall be executed prior to the start of the home inspection. This pre-inspection agreement creates the contractual duty of a home inspector to competently inspect the property. As such, a home buyer is entitled to sue a home inspector for breach of contract and for any alleged damages arising from that contractual breach. There is, however, a time limitation for an action for an error or omission in the performance of a home inspection contract which is four years. New Jersey courts have also allowed a limitations period to be shortened by agreement between the parties, so long as such an agreement is reasonable.'

Their inspector was referred by their realtor, who was/is a 'friend.'