home inspection claims

Should You Refuse To Do A Home Inspection For An Attorney?

That’s the title of a discussion I ran across on one of the many Home Inspection Group Forums on LinkedIn. The difference of opinion and experience expressed by inspectors who responded to the query was all over the map.

One inspector who has never refused to perform an inspection for a lawyer has never had a lawyer client so much as glance at the inspection agreement before signing it. A second inspector had a couple who were both lawyers crossing out clauses in the contract that they could not abide. The inspector stood his ground and, when the lawyers also refused to budge, he walked.

Another respondent actually likes working with lawyers because, he says, they understand the need for limitations and are generally thoroughly impressed with the comprehensiveness of his work product, notwithstanding those limitations. And, he added, you can’t overlook the marketing value of having a satisfied client whose endorsement is likely to carry considerable weight.
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Happy Anniversary!

As hard as it is for me to believe, today marks the first anniversary of this website. One year ago, at the urging of my very young, very talented and very savvy internet media advisors, I took a giant leap of faith and launched this website which is dedicated to providing home inspectors with timely, accurate and useful content and commentary on the myriad of issues that arise where their home inspection businesses intersect with our legal system.

As a serial entrepreneur, I am accustomed to launching new enterprises. And though I am always almost pollyannishly optimistic about their prospects, the truth is that you never really know how successful any new venture is going to be. Especially one that’s entirely dependent on generating fresh content twice a week, week in and week out.

As it happens, my faithful home inspector readership, their often quite delusional clients, the alphabet soup of national and regional home inspection associations, state home inspection licensing boards and the often suicidal professional liability insurers that serve the industry are an evergreen source of new material.
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Neutralizing The Client From Hell

My two recent posts on whether E & O Insurance is a waste of money have engendered a brisk meta discussion on a couple of the LinkedIn group discussion boards for home inspectors of which I am a member and on which I posted links to the two posts. Here and here.

In my experience, home inspectors’ default responses to questions on the utility of E & O insurance have always been negative, often vituperative, screeds. So I was more than a little surprised to read thoughtful posts from a majority of respondents who would never contemplate venturing out without it.

That’s essentially where I come down, as well, even though I am not all that risk averse in most matters. After all, I ski, pilot airplanes, run with scissors and am friends with Nick Gromicko. But I really do not want to be involved more than tangentially in a major distraction like having to defend myself in a lawsuit. Not only is litigation hugely expensive, it is also an enormous time consumer and those are two headaches that I am thrilled to be able to outsource for a relatively modest stipend.

One inspector commented that his insurance cost amounted to about 1.8% of the cost of the inspection and was, thus, a no-brainer, as far as he was concerned, for the peace of mind it provided.

One point eight percent sounds about right. Two hundred and fifty inspections at $400 would generate gross revenue of $100,000. One point eight percent of that would be $1800 or what an E & O Policy with a reliable carrier would cost. So for $7.20 an inspection, he has outsourced most of the sturm und drang that the Client from Hell can generate.
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Redundancy, Importance Of

Three-and-a-half years ago, I was relaxing at the pool of the Courtyard Nashville Brentwood after having delivered a Law and Disorder Seminar that morning, when all of a sudden, all the lights went out in the hotel.

Hmmm, I thought but continued reading the Wall Street Journal. A few minutes later the lights came back on. Later, having absorbed both the Journal and my Irish skin’s quota of ultraviolet radiation, I went up to my room to discover that my PC laptop clone had suffered a fatal coronary.

This was a bad news/good news situation. On the one hand, I had previously decided that I had to get rid of my Windows-based laptop computer clone due to its preposterously slow responsiveness and its fondness for unprovoked crashes. On the other, I had not backed up any of my work product.

This was pretty embarrassing personally because, as a licensed commercial pilot with multi-engine and instrument ratings, I certainly understand the importance of redundancy. So I took my punishment and vowed “Never again.”
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They’ll Be Naming Hospitals After Me

Lady Agag and I took a much-needed three-day, two-night mini-getaway to the Jersey Shore’s Irish Riviera this past week to re-charge our batteries and to celebrate my birthday and our wedding anniversary. Both milestones actually occurred September 19 but due to a speaking engagement on September 20 at the ASHI New England Fall Conference and relentless rain the following weekend and the Casey O’Malley Inspection Conference the weekend after that, we had to postpone our celebration to the Columbus Day weekend.

Fortunately, the weather gods smiled on us and we enjoyed sunny, mid-80 degree days, empty beaches, clear cool evenings and near-empty restaurants throughout our stay. Of course, the world continued to spin despite the fact that we had stepped off and home inspectors continued to receive unreasonable demands from ungrateful clients.

And so it came to pass that I returned to a full plate of nitwits who require an industrial-strength dosage of tough love: four lawsuits, one arbitration demand, three demand letters and two folks who thought that making slanderous comments on Angie’s List was an entirely appropriate way of compensating for their not having read the inspection report.
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Don’t Lead With Your Chin

By the time a home inspector feels the need to summon me to deal with an unreasonable client, he has generally already bent over backwards to try to mollify him. Generally, this takes the form of offering a. to return the inspection fee or b. to pay for “half” of the repair or c. to make the repair himself.

Regular readers know well my position on any of these strategies. You may think that you are bending over backwards. In reality, you are bending over frontwards, something one should strive mightily to avoid doing.

Since it is almost never the case – less than 1 % of the time – that the home inspector has any culpability for the issue in question, why in the world would an inspector want to make any offer to resolve an issue that was not of his making? That’s a rhetorical question that answers itself.

Of course, the irony is that inspectors are constantly complaining to me that insurance companies simply refuse to resist bogus claims, a complaint that sort of rings hollow when they refuse to do so, themselves.
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Make Sure Your Client Reads Your Inspection Report

It’s always a pleasant surprise to hear from folks who frequent this site because otherwise I would never know who is reading my musings, where in the wide world they are doing it or whether they are resonating with my target audience.

The other day I got an email from a reader in Seoul, Korea – I never say South Korea because, well, because it is the Republic of Korea, not the Republic of South Korea – who quoted this text from this recent post:

“But let’s take it a step further. Suppose that this inspector failed to discover some other defect that ended up costing his client a lot of money to correct.”

“Would the inspector be liable for that loss?”
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Beware Of The Streisand Effect

Because we live in an age where folks can vent their ill-founded outrage against service providers anonymously, instantly and globally with a few strokes on a computer keyboard, businessmen and women can now add “defamation” to “death and taxes” as a new “certainty”. And there is no shortage of online venues where these oh-so-put-upon umbrage mongers can grind their reputation-destroying axes, Angie’s List and yelp being two of the most popular venues. The Better Business Bureau is another.

A business person who finds his professionalism under assault on one of these sites by some thin-skinned yenta can be forgiven, perhaps, for wanting to defend himself forcefully via the response mechanism that most of these sites provide. In my experience, however, this is seldom a good idea because of a phenomenon that has come to be known as the Streisand Effect, after the well-known stage fright victim.

Ms. Streisand had sued a photographer who had taken aerial photographs of beachfront properties on the California coastline as part of a government project to document coastal erosion. One of the properties was hers and the suit sought suppression of the photograph of her property. You can guess what happened.

Prior to the filing of the suit, the photograph had only been downloaded six times. In the ensuing four weeks, over 400,000 internet users had visited the photographer’s site to gawk at the privacy-obsessed celebrity’s ostentatious crib.
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A Deck Collapse, Now . . .

One of my inspector friends recently called me with some disturbing news. Both his former client and the client’s insurance company were suing him over an inspection that he had performed in July of 2008.

The inspection was pretty standard, a few issues but nothing not easily and inexpensively corrected. The property had a rear deck off of the first level which was original to the seventeen year-old home and the inspector described the deck construction as “average” with two-by-eight joists and “adequate” vertical support.

Unfortunately, the deck collapsed this past February under the sheer weight of ice and snow accumulation. The homeowner filed a claim, alleging some $57,000 in damages, against his homeowners insurance policy and his insurance company denied the claim for the most part, agreeing to pay only $10,000.
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Is E & O Insurance A Waste Of Money? Part Deux

My recent post, Is E & O Insurance A Waste Of Money, prompted this comment from Arizona Home Inspector, Jeff Byfield:

Joe my question is, if you didn’t have insurance would you even be considered in these frivolous law suits that greedy people and unscrupulous attorneys pull you into? What can they really sue you for besides your ladder and a few tools, or is there more to this than what I’m thinking?

This is a question that comes up every time I present the Law and Disorder Seminar and every time I write about professional liability insurance.

Many inspectors believe that, if there is no pot of gold – insurance – at the end of the rainbow, claimants and their attorneys will simply fold their tents and go away. Problem solved. Unfortunately, as I have written extensively elsewhere on this site, lawsuits seldom end well for uninsured defendants and their uninsured status certainly does not immunize them from lawsuits.

While I have successfully persuaded over 500 claimants and their attorneys to abandon their claims, it was because I laid out compelling reasons for doing so bolstered by Force Ten levels of logic. They did not do that because the inspector had no insurance, they did it because I convinced them that they had no claim.

Some inspectors who have been following me for years and are familiar with my phenomenal success at terminating home inspection claims aborning have wondered to me what the point of having professional liability insurance is, if 97% of claims go away with a letter. Why, indeed?
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