Comment Sense

A recent republication of an archival post about why home inspection claims always fail prompted this comment from Iowa home inspector John Mauch.

So, why should we carry insurance? Fortunately I have not had a claim and know several inspectors [who do not] carry insurance for the reasons you already stated.

While most claims against home inspectors – and by “most”, I mean 99 percent – have no validity, they still need to be defended. If no suit has been filed, I can generally – 97 percent of the time – get rid of the claim with a responsive letter that compellingly outlines all the reasons why the claim is not valid and why it would be foolish for the claimant to pursue it.

But there are a substantial number of cases that begin life as a lawsuit. That is, there has been no prior indication that there was even a problem with the inspection. With those cases, I have only been successful at terminating them about half of the time and it can take weeks, even months before plaintiff’s counsel eventually files a voluntary dismissal.

For the 50 percent of suits that I can not convince plaintiffs to dismiss and the 3 percent of demands that I can not squash with a responsive letter, you need to have E & O insurance.

But I think that John’s instincts are understandable and for many inspectors rolling the dice has a certain appeal. If you have performed thousands of inspections without so much as a call back, and paid thousands of dollars in premiums for professional liability insurance, the temptation to go bare is nigh impossible to resist.

Inspectors who are contemplating going that route should bear these facts in mind, however. First, they are operating in an extremely litigious society. Second, past performance is no guarantee of future results. Three, they need to discipline themselves to set aside the money that they would otherwise spend on E & O insurance to hedge against the possibility that they might be one of the unlucky ones.

For an idea of how much you should be setting aside for that potentially rainy day, click on the blue “Get A Quote” button to the right of this post.