e&o insurance

E&O Insurance Does NOT Paint a Target On Your Back

E&O Insurance No Target on BackMany home inspectors believe that if they tell a client and his/her lawyers that they don’t carry professional liability insurance, the claim will just disappear.

However, there are no shortage of clients making meritless claims. I see them every day. Would no insurance from which to collect on a judgment make the claim just go away? If claimants aren’t deterred by no rational basis for their case, how likely is it that they will stop in their tracks when they realize you don’t have insurance?
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Returning Your Faith in the Legal System

Returning Home Inspector's Faith in Legal SystemMany home inspectors have little faith in the legal system, and as an attorney in this professional space, I can see why. They believe (nearly 100% of the time rightfully so) that they are being wrongfully sued, poorly defended and thrown under the bus to the tune of an expensive deductible and a professional black mark.

It doesn’t have to be that way. Attorneys actually appreciate being told that their recently-sent demand letter is hogwash (that’s a legal term) and that the claim has no legal standing for a litany of reasons. Instead of getting a check back in the mail, when a claimant’s attorney hears from me, he or she knows that pursuing the claim wouldn’t be beneficial to their client, and in turn their OWN professional reputation.

How can I return your faith in the legal system? Watch this week’s video blog for more details on an approach that makes the legal system work like it should.
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Is E & O Insurance A Waste Of Money?

Home Inspectors frequently ask me if having E & O Insurance is “worth it.” The unspoken subtext of the question, of course, is “Hey, if I never have a claim, haven’t I wasted my money?”

I guess that the answer would be “Yes”, if you felt the same way about any other line of insurance. If you never have an auto accident, never have a health issue, never have a house fire, never lose time from work due to sickness, have you wasted the money you spent on auto, health, homeowners and disability insurance?

The problem that I think that home inspectors have with legacy E & O insurers is that they don’t really trust them to do the right thing. And with some considerable justification.

I’m currently representing an Arizona inspector in a multi-party claim: the seller, a seventy-something woman, the real estate broker, a very successful entrepreneur and the inspector. The claimants are a real estate lawyer and his wife.

The lawyer-claimant wrote the Mother of All Demand Letters, a real magillah, fourteen pages, that sought $150,000 in damages. My response, according to counsel for the other defendants, “really infuriated him.”

Well, good, I thought. My fastball has not lost any of its velocity.
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Brand X Home Inspector Insurance Companies Hazardous to Your Wealth

Tip 7 - Brand X Insurance Companies If you’ve seen any effective product-based television advertising, you know all about Brand X, the competing product that left ring around the collar, caused soapy buildup and dry lifeless hair.

In the real-world home inspection industry, Brand X Insurance companies are the ones that can cost you a small fortune. Why? As I discussed in another ClaimsAcademy report, most home inspection insurance companies have the highest instincts of self-preservation and are at all times trying to settle a claim on their most favorable terms, not yours.
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Stop Refunding Home Inspection Fees

Keep Your Hands in Your PocketsRefunding fees to every unhappy client is a revenue-crippling business model.

You are a home inspector, not a psychic. You can’t predict the future. So, when a monsoon hits your area six months after an inspection and a client resurfaces to complain about water intrusion through the siding, you need to ask yourself this question.

“Is my client unhappy with me and my inspection or is he dissatisfied with the result? And if the result has nothing to do with the quality of my inspection, why am I refunding his fees?”

I examine this issue in more detail in this week’s ClaimsAcademy video blog.
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Why You MUST Follow Your SOP

SOP is Your Best FriendFollow your SOP. It’s a theme I ingrain in the minds of home inspectors who attend my Law and Disorder Seminar. It’s one of the 6 key strategies to diminish your chances of being successfully sued by an enraged, irrational client.

One thing that can NOT go unnoticed in the thousands of SOPs I’ve read across various states and professional organizations is this: “The home inspector is not required to:” followed by a litany of issues for which the home inspector is NOT responsible during a limited, non-invasive home inspection.

In this week’s video blog, I examine the SOP’s key elements and how to utilize your own SOP as a safeguard against clients who want to come after you for a result you did not cause and/or an issue you weren’t required to inspect.

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Spreading Home Inspector Education Nationwide

Joe Ferry Educating Home Inspectors NationwideI have traveled across this country, well the lower 48 anyway, educating home inspectors on ways they can minimize risk, maximize business reputation efforts and protect themselves from meritless claims.

I have met over 5,000 home inspectors in the last five years while presenting the Law and Disorder Seminar, and I enjoy providing these competent professionals with education they need to safeguard themselves in this litigious culture.

I also find learning about each inspector’s unique value proposition, business similarities and structural differences is a valuable exercise in better understanding the industry.

In this week’s video blog, I talk about my travels, my thoughts on the interactions I have with industry professionals and how you can see me at your chapter or association event in 2015.
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Paying Out Your Dollars in All The WRONG Places

Tip #28 - Paying Out Dollars in Wrong PlacesThe No. 1 compliant I receive from home inspectors is that some insurance companies cave like tents and pay claimants even when the inspector did nothing wrong!

An insurance company’s only interest is in settling the claim on its own terms, not ones that are necessarily favorable to the home inspector. Accordingly, many home inspectors don’t adequately protect themselves. They carry high deductibles to lower premiums.

Yet, as I always say, you do NOT have to conduct a negligent home inspection to be accused of doing so.

I examine why and detail the near horror story of one home inspector in this week’s ClaimsAcademy video blog.
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Follow-Up Home Inspectors: It’s a Different House!

Tip 27 - Follow-up Inspectors: It's a Different House!You walk into a house that had already been inspected. There’s glaring issues in the basement – a massive crack in the foundation plus some apparent moisture stains. You ask yourself, “How did the initial home inspector miss these easy-to-recognize issues?”

It’s a good question, one follow-up home inspectors don’t ask enough. They are too busy looking like the hero to their client while throwing a professional colleague under the bus.

Instead, follow-up home inspectors need to recognize they are inspecting an entirely different house. What questions should they ask themselves during the re-inspection? How should they proceed with detailing the defects?

I examine these issues in this week’s ClaimsAcademy video blog.
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All Home Inspector Insurance Companies Are NOT The Same

Myth 5: All Insurance Companies Not SameMold identification is not within any home inspection standard of practice, but a home inspector told me that his insurance company settled a mold claim for $250,000. That truly made me question the sanity of the claims executive.

Yet, that story isn’t an outlier. Stories like this happen every day, as insurance companies many times would rather settle and get rid of the claim instead of fighting it.

Why is this bad news for many home inspectors? Watch the video above as I illustrate the issue and offer an easy resolution to a reoccurring problem.

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