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InspectorPro Insurance

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  1. I think your opinion is fair. We went back and forth for quite some time on whether to write the article because it's a topic that I'd label "risk management adjacent." What ultimately made us decide to do it was 1) the frequency with which inspectors ask us about it and 2) the number of inspectors who think that incorporating can replace other risk management tools, like insurance. Our goal with the article was for it to be an introduction to the subject that helped start inspectors in the right direction with the guidance to do as you suggest: talk to your attorney and CPA to find the best fit. Hence the push for attorney and CPA calls throughout and in the final paragraphs: "Choosing an entity type for your home inspection business can be difficult. However, with the right understanding, you, your attorney, and your accountant can make the right choice for your business. "Whatever you decide, be sure to protect your company with E&O and GL insurance. To get coverage with us, take 10 minutes to xxxx (edit) for a no-obligation quote." As always, thanks for the feedback!
  2. Hi TIJ Readers! After we published our Top General Liability Claims infographic in September, we received A LOT of feedback on Claim 4: Garage Doors. Since virtually every garage door-related claim we receive comes from the performance test, there was a lot of debate among inspectors about whether the industry should perform the test. So, we decided to explore the question further. In Part 1 of our 2-part series (Part 2 comes out on February 1st), we explore what the two major home inspection associations, ASHI and InterNACHI, have to say about the pressure test and how that may impact your decision to test or not to test. Enjoy! Stephanie P.S. Shout-out and thanks to @Marc and @Les for contributing to this one and its sequel. P.P.S. Since I go on maternity leave in February, you're going to start seeing someone new on the forum: my assistant Aubri Devashrayee. Be sure to give her a warm welcome when she posts Part 2 around February 1st! Part 1: The Standards' Perspective During a routine home inspection for a home buyer, one of our insured home inspectors performed an auto reverse test to examine the reverse jam function of the property's automatic garage door. The door failed the test due to a pre-existing defect, which the inspector wrote up in his inspection report. Shortly after the inspection, the property's seller called the inspector. The seller argued that the home inspector had damaged the door and, therefore, should be liable for repairs. With the help of our free pre-claims assistance, the inspector responded with a Denial of Liability letter. The pre-claims team argued on the insured's behalf that the inspector was not at fault. We explained that the home inspector did not cause the defect. When he tested the garage door, the defect was shown to be pre-existing. Had the inspector not performed the test, there was a good chance the door would've failed shortly after. This could have potentially caused personal injury or property damage. Our letter didn't satisfy the seller. He then contracted out the repairs himself, and sent our insured the bill demanding he pay it. The issue elevated to a claim. The auto reverse test. The auto reverse test evaluates the pressure-activated auto-reverse function of a garage door. You can also call it the contact reversal test, pressure test, and performance test. Home inspectors aim to protect their inspection clients and their clients' families from potential perils by testing this safety feature. According to the United States' Consumer Product Safety Commission (CDC), there were 23 entrapment incidents involving death or injury of children under 15 years of age reported between December 1, 1996 and June 30, 2003. While the CDC has not published any more recent statistics, news outlets have continued to report on garage door-related incidents, like the death of a child in Maryland in 2013 and the death of a dog in New York in 2018. While reports of incidents appear to be infrequent, these stories of fatalities and injuries concern buyers and, subsequently, their inspectors. However, choosing to perform the contact reversal test isn't as straight-forward a decision as it may seem. For one thing, there are two primary ways to perform the test?with a two-by-four and with your hands?and inspectors and subject matter experts vehemently disagree on which technique is superior. For another, some industry professionals question whether the performance test is, in fact, an accurate predictor of safety or if it, in fact, gives clients a false sense of security. Lastly, as we shared in our article Top 5 General Liability Claims Against Home Inspectors, inspectors take on increased liability when they perform the performance test, as virtually every garage door-related claim we've seen has resulted from the test. We looked to the two nationally recognized Standards of Practice (SoPs) to see how they address the contact reversal test. [READ MORE]
  3. Hi TIJ Readers! Happy New Year! And Happy National Radon Action Month! With the growing interest in radon inspections among the inspection community, we decided to kick off the year by interviewing 10 inspectors that offer radon testing. They share why they test, what investments they make to test, and how they manage risk. See an excerpt below. Best, Stephanie Radon inspections: What you need to know Radon: the colorless, odorless gas emitted into the air by the radioactive element, radium, as it breaks down in soil, rock, and water. Typically, radon penetrates buildings through small cracks or openings in foundations undetected. And, once radon has entered a property, the radon may be trapped inside. In fact, this is what home inspectors test in their radon inspections. More statistical evidence may be necessary to fully understand the causal relationship between radon and lung cancer (more below). However, the EPA continues to characterize radon as a cause for concern. In 2017, the EPA designated January as National Radon Action Month, encouraging observers to "Test, Fix, Save a Life." Since testing is the only way to determine a home's radon levels, the EPA and Surgeon General recommend that home buyers, sellers, and remodelers test all homes below the third floor. If consumers discover elevated radon levels of four picocuries per liter (4 pCi/L) or higher?which the EPA estimates that nearly one in every 15 households do?then the EPA urges them to take corrective measures, including the installation of a radon-reduction system. Many national and local governments encourage and, in some cases, even mandate radon testing during real estate transactions. This has led many home inspectors to offer radon testing as an additional service. In fact, over a quarter (25 percent) of the inspectors we insure carry the radon endorsement. This implies that just as many inspectors currently offer radon testing in the market at large. (More on endorsements later.) In this article, we explore why 10 home inspectors chose to offer radon testing and what recommendations they have for home inspectors considering offering the additional service. Why inspectors test for radon. When asked why they offer radon testing, the 10 home inspectors we surveyed said that they began offering the service for one or more of the following reasons: 1. They wanted to protect clients from potential lung cancer risks. The labels "silent killer" and "cancer-causing radioactive gas" characterize public opinion and discourse regarding radon. But how did radon amass such a bad reputation? While researchers studied radon?s effects on miners for decades prior, testing within homes began in Pennsylvania in 1984. While entering the Limerick Nuclear Power Plant, which was under construction, an engineer named Stanley Watras tripped a radiation detector. This monitor measured unsafe radiation levels for plant workers. Three things stood out to safety officials: When he set the monitor off, Watras was coming to, not going from, the Plant. Due to the construction, the Plant was not currently operating. No other workers were contaminated. Based on the evidence above, Plant officials were certain that Watras had not been exposed to the radon at work. So, the officials took measurements of the Watras' home. To their alarm, they discovered radiation levels more than 200,000 times above the level permissible for people living close to nuclear power plants. Believing that Watras' exposure to radon in his home may not be uncommon, the Environmental Protection Agency (EPA) conducted a survey of 10 states that volunteered. During the 1986 survey, the EPA tested 11,600 homes for radon. The results: one of every five homes tested contained health-threatening radon levels. The EPA declared radon a national problem. [READ MORE]
  4. Hi TIJ Readers, My favorite articles to write are ones that directly stem from home inspectors' questions. This is one of those articles. An inspector asked us how to approach negative reviews without increasing his liability. Here's our answer. Enjoy! Stephanie P.S. Have a topic you'd like us to write about? Let us know in the comments. How to respond to negative reviews against your home inspection business Online reviews matter. But just how can reviews affect your home inspection business? A 2017 survey by Podium revealed that reviews impact 93 percent of consumers' purchasing decisions. According to the Harvard Business School, a one-star increase in Yelp ratings leads to a five to nine percent increase in that business' revenue. The 2018 ReviewTrackers Online Reviews Survey found that 94 percent of consumers choose to avoid a business based on a negative online review. The bottom line? Online customer reviews can directly impact your success. Which led one of our readers to ask us this question: At InspectorPro, we know a thing or two about receiving negative reviews from people that aren't clients. Receiving negative reviews, especially from non-clients, can be frustrating and disconcerting. The good news? Your response to reviews can make a difference. In a recent study, the Harvard Business Review found that replying to customer reviews, positive or negative, results in better ratings. Software company Vendasta listed three reasons why responding to unpleasant reviews is beneficial in a recent blog post: In this article, we discuss how to respond to negative online reviews to defend your reputation and discourage potential claims. Investigate the allegations internally. Before responding, look into what the reviewer is saying. See if they are a client of yours or otherwise related to an inspection you performed (i.e. seller, real estate agent). Then, examine how their claims match up to your recollection of the inspection and your report. If you weren't the one who performed the inspection, take time to discuss the review with the inspector that did to make sure you have all the facts. Evaluating the feedback first also gives you the opportunity to put your emotions in check. Reacting defensively could inspire your negative reviewer to escalate. Worse still, if your upset reviewer is particularly angry or petty, they might seek to get a bigger reaction from you by spreading their unfavorable assessment across online platforms. [READ MORE]
  5. Hi TIJ Readers! When you're in the process of buying or selling an inspection business, insurance is rarely the first thing on your mind. However, planning for your prior acts and future coverage is an important part of ownership changes. We go over some of the important insurance-related considerations in this article. Enjoy! Stephanie What happens to my insurance policy when I sell my business? And other coverage questions relating to ownership changes Could or have one of the following scenarios happened to you? The owner of the home inspection company that you work for dies unexpectedly. When he retires, the owner sells his home inspection business to you, his employee. To get into the business, you buy the name of a prominent home inspection company in your area. Whether you're considering entering or leaving the business or simply preparing for the future, it's important to know what your insurance policy says about changes in business ownership. Knowing your policy's conditions will better prepare you and your company for both unexpected tragedies and unforeseen opportunities. It will help you choose how to protect against liability, whether you choose to carry tail coverage or transfer that liability. In this article, we give you the basics. You need to let your insurance company know when there's a change in ownership. Under the section Who Is An Insured, your policy defines who automatically receives insurance coverage. For typical home inspection insurance coverage, your list of insureds looks something like this: When an owner dies or a new owner inherits a business, insurance coverage doesn't automatically transfer into someone else's name. Thus, when an owner dies or changes, you need to let the insurance company know so that the new owner(s) can receive proper coverage. And, more importantly, you need to let the insurance company know who will take on the liability of the business going forward. Be sure to make plans for your retroactive coverage. When a business loses or gains a new owner, there are a lot of considerations to take into account. One important consideration is who's liable for the retroactive (prior acts) coverage for the business. In most cases, business owners can choose one of two options: The original owner can keep the liability for past inspections and receive coverage for that liability with an extended reporting period (ERP) endorsement, or tail coverage. In cases in which the original owner has died, the owner's legal representative may purchase tail coverage on the deceased insured's behalf. (See "Transfer Of Your Rights And Duties Under This Policy" in the Conditions section of your insurance policy.) Alternatively, the original owner may pass all liability, including past inspections performed by the business, to the new owner. That owner, who purchased the business, is responsible for all claims, including claims for the original owner's inspections. To protect against such claims, the new owner can carry continuous insurance coverage with a retroactive date reflecting that of the previous owner. Owners should specify who will take on retroactive coverage in their purchasing agreements, which should be written by or with the help of professional legal counsel. As such, insurance companies may ask new owners for copies of their purchasing agreements to ensure proper coverage is given. [READ MORE]
  6. From what I've heard talking to ASHI about attendee registration, they're anticipating some onsite registration, so I doubt you'll run into any issues booking there.
  7. Hi TIJ Readers! As many of you have reached out with feedback on our risk management articles, we've discovered that many of the same questions and concerns keep coming up. Many of those ideas have inspired the articles we plan to write in 2020. And we explore just a piece of one in this case study. The concept: When is it appropriate to exceed the Standards of Practice? And what increase in liability, if any, will I experience when I exceed the SoP? In this case study, we see an argument against a relatively common inspection practice: moving seemingly harmless objects to conduct a more thorough inspection. While we're sure there are many cases in which inspectors did something similar without incident, we hope this claim can serve as an example of worst case scenario. And, with that example, we hope that readers like you are more equipped to make judgement calls on the job. Enjoy! Stephanie The Domino Effect: A Home Inspection Insurance Claim The following is a real general liability insurance claim from our insurance claim archives. In order to protect the insured's identity, all identifiable characteristics?including names, associations, and locations?have been omitted or removed. While performing a routine inspection, a home inspector stumbled upon a common problem: Some of the seller's belongings were inhibiting him from performing his inspection duties. Specifically, one of the seller's suitcases was obstructing the attic entrance. Wanting to give his inspection clients, the buyers, the best service possible, the home inspector decided to move the suitcase. It was just one suitcase, he reasoned, and it made the difference between inspecting an entire area of the property and omitting it from his report. Unbeknownst to the home inspector, the suitcase wasn't the only thing on the shelf. A stored- pressure fire extinguisher sat beside the suitcase and out of view. As the home inspector moved the suitcase, he bumped the out-of-sight fire extinguisher, sending the extinguisher crashing to the floor. Upon impact, the fire extinguisher cracked the tile floor and discharged into the cold air return of the running HVAC unit. The discharge blew throughout the house, leaving a fine layer of extinguisher dust in every room of the property. [READ MORE]
  8. Sorry for taking a while to respond to you. Had a crazy week and a half here at the office. I think there's definitely something to say against the one-size-fits-all approach to report writing. However, one of the reasons we wrote the article is because we get asked about report writing so frequently. There seems to be a high level of interest among home inspectors in report writing techniques--particularly amongst newer inspectors. So, I think it's beneficial to have some resources out there to give home inspectors some starting points/techniques to consider implementing. Agreed on the opportunity to learn! I appreciate the continual feedback so that we have the opportunity to refine our approach to researching and writing articles.
  9. I'll take that. The purpose of the article was primarily to posit the inspectors' points because I think they're the authority on this topic. Mertz and Sipe definitely had the most to say, so I'm not surprised it came off that way. Interesting feedback. Everyone who ended up in the article, including Burroughs, was recommended to us as someone who had authority to speak on report writing, in part due to his position as a Louisiana State report reviewer. While I can't speak on the quality of his reports because I didn't read them prior to writing the article, I think all of the advice he gave during our interview was good.
  10. Hi TIJ Readers! One of the most common topics we're asked to address in our articles, presentations, and one-on-one conversations is report writing. How can home inspectors do it well? To answer this question, we went to several experience home inspectors and asked them for their tips. See what they recommend in the article, excerpted below. Best, Stephanie Inspection Report Writing: 8 Best Practices For inspection clients and home inspectors alike, inspection reports are worth their weight in gold. Many inspection clients?often home buyers?rely on the findings inspectors detail in their reports to make important purchasing decisions. "[The inspection report is] basically a giant list of everything that is wrong with your (potential) home," explained Kristin Wong in her article "How to Read (and React to!) a Home Inspection Report" for the Architectural Digest. "And while not every issue is a big deal, some are significant enough to have you rethinking your offer, or at least renegotiating with the seller." Likewise, the home inspectors themselves find value in the reports they generate. For many inspectors, well-written inspection reports symbolize a level of maturity and expertise in the industry. Furthermore, many state licensing boards, associations, and franchises review inspector-members' reports annually as a way of measuring the quality of the inspectors' work. "There's almost nothing more important to your reputation and success as a professional home inspector than the quality of the report your client receives after you've finished inspecting a home," argues Inspection Certification Associates (ICA). As important as inspection reports are to the industry, there's a wide array of opinions regarding exactly how to write a good report. Sometimes, it feels as though there are just as many ways to generate a report as there are home inspectors. As a home inspection insurance provider, we're interested in what techniques home inspectors can employ to create quality reports. So, we interviewed several seasoned inspectors to learn what strategies they suggest other inspectors use to achieve report writing success. We've compiled their tips into eight inspection report writing best practices below. 1. Don't rush it. Of the home inspectors we interviewed, all of them have completed reports onsite, but none of them still do. Our interviewees argue that finishing reports offsite makes for better final products. "I wouldn't put my John Hancock on any report that was completed and generated onsite," said Mark S. Lodner of LBI Home & Building Inspection in Virginia. "It's just asking for trouble." What exactly did our interviewees find concerning about onsite reports? Mistakes. After reviewing some of their own onsite inspection reports, our inspectors realized that writing reports in one go made it more likely that they make mistakes?often, minimal misspellings, but sometimes, complete oversights. Thus, our home inspectors believe it's important to take the time to review reports with fresh eyes before sending them to clients. For many of them, taking a few hours or an evening to complete a report still allows them to deliver reports in a timely manner, thus respecting their clients' time and deadlines. "[By writing reports offsite,] I don't have anybody looking over while I'm typing, rushing me, which can result in sloppy sentence structure, making mistakes, and leaving things out," said Miki Mertz of Complete Home Inspection in Kansas. Randy Sipe of Family Home Inspection Services in Kansas and the Board for the National Home Inspector Examination (NHIE) agrees⁠?not just from his own report writing experience, but from reviewing other inspectors' reports. Additionally, Sipe finds that he's better able to contextualize defects when he reviews all the inspection photos later on. It also helps him determine the seriousness of the issues when considered as one piece of a larger puzzle. Mike Burroughs of QED Service in Louisiana, too, has discovered ways to improve his reports post-inspection. In fact, reviewing his reports offsite has helped Burroughs catch significant property defects he would have otherwise missed. "There have been a number of times [when] I've come home, blew up photos, [and] started looking to make sure I put all the right markings on them, indicating what the problems were. And lo and behold, I've found another issue that I didn't notice while I was onsite," Burroughs said. Appearances. In addition to defending the inspection information's integrity, completing reports offsite can also help with inspectors' appearances. As a former member of the Louisiana State Board of Home Inspectors, Burroughs has heard clients complain about home inspectors who spend their inspections buried in their phones and tablets. According to Burroughs, these clients wonder if their inspectors are paying more attention to their devices than the inspections themselves. "As an inspector, you have to remember what the public sees you do and what their opinion of what you do is," Burroughs said. [READ MORE]
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