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InspectorPro Insurance

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  1. 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]
  2. 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.
  3. (skims Wikipedia article about Chrissy on Three's Company) So, you're saying the inspector was klutzy?
  4. 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]
  5. 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.
  6. 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.
  7. 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]
  8. Heard from a reliable source that the majority of IW registrations come in around/after the holidays. So, if you're willing to wait, you may get a better idea of who will be there on Sunday if you ask the first week of January. If you're a planner like me, you may find Sunday's agenda useful. They're having the Welcome to ASHI Event, the Annual Meeting and Awards Presentation, and the Opening Night Reception all on Sunday. (Last year, they did the first two Monday morning.) We were fairly busy in the Vendor Hall during last year's Opening Night Reception, but it wasn't our most hectic time at the booth during the conference, either. http://www.cvent.com/events/inspectionworld/agenda-63f9ffbd9a4345de9e0f41a3333aaf6b.aspx
  9. Hi @Jim Katen. Thank you for your thoughts on this. I find your examples with the moisture meter and digital camera particularly interesting since they do show a definitive change in risk management recommendations. While I don't see us changing our recommendation to "tactical exceedance" just yet, I do think "The Katen Method" concept presents an interesting compromise. I'll pass the idea on to our claims team, who determines our recommendations, as an item of interest.
  10. I'd like to think our audience is broader than the "bottom end" you've described! However, most of the questions we get asked have to do with managing risk, so I must acknowledge that we're speaking with different groups of inspectors. While I have to stand beside my earlier comments about the SOP, I do agree with the idea of better training, educating, and inspecting likely reducing claims. We've definitely seen a relationship between a lack of experience and training and claims. Ha! While we recommend staying within the SOP, we don't penalize people for exceeding it. Frankly, we don't ask. As for a denial, the only way to know for sure is apply! However, unless you have any other experiences I'm unaware of, like an inspection-related felony, I can't see there being a problem.
  11. Thanks for sharing that. That section from the ASHI SOP does shed some much needed light on the SOP's intended use. However, I do think you misunderstand our purpose as insurance providers. The risk management tips we provide are meant to do just that: manage risk. We aim to help home inspectors limit their liability and prevent potential claims by sharing the information we've gathered from a decade of insuring and defending inspectors from allegations. While you may disagree with the counsel to stay within the SOP rather than exceed it, that counsel isn't based on personal opinion. Rather, it's based on actual cases we've faced. To not recognize that inspecting beyond the SOP can make claims more difficult to defend would be a disservice to our clients and other inspectors who read our articles in hopes of being able to apply various techniques to shield their businesses from claims. So, while there are some inspectors who disagree with the principle, we continue to share that counsel so that inspectors can then make an educated decision about how they run their inspection businesses.
  12. Hi, @Jim Katen. I agree that, in many instances, what protects the client and the inspector are the same thing. As for the SoP being a minimum rather than a maximum, that's just not how we've seen the SoP interpreted by attorneys, arbitrators, and judges. That's why we recommend staying within the SoP rather than exceeding it. Whether meeting rather than exceeding the SoP was what the people who framed the SoP intended, I can't say. But, I can say that's not how the SoP is regularly being used in both claims filings and defense. Hi, @hausdok. Your claims example is an interesting one. Here at InspectorPro, we only charge the deductible when the claim amount--including payment and legal fees--meets or exceeds the deductible. So, in your particular case, you likely would have just paid the $350 to the client and nothing to us. As for your 18 years since, it's great that you haven't had any claims since you dropped your insurance coverage, and it's likely that your inspection practices have a lot to do with it. Unfortunately, you may be the exception to the rule. Just looking at the inspectors we've insured over the past 10 years, about 60 percent of them have at least one claim in their career. And of those claims that we receive, 80 percent of the claims are meritless, meaning the technical inspection was accurate and the home inspector still received a claim. Ultimately, in states where insurance isn't required, whether you buy insurance is up to your risk tolerance: how much you want to protect yourself versus how much you're willing to leave up to chance. As insurance providers, we'd say that inspectors like you who choose not to carry insurance have a high risk tolerance. In contrast, an inspector who chooses to carry all the insurance coverage they can has a low risk tolerance. It's a personal choice.
  13. I get your point. We argue that a balance is possible: You can provide a stellar service to your inspection clients while still managing your risk. But, we recognize, too, that there are plenty of instances where what best serves the client and what best protects the inspector seem to be in conflict. In these situations, as insurance providers, it's always our job to always advocate for what's most likely to avoid claims. It's then up to the inspectors individually to weigh the options and decide what's best for their businesses.
  14. Great question. The answer remains to be seen. So far, we haven't run into any issues with courts arguing that IR exceeds the SOP of a visual, non-invasive inspection. That doesn't mean we never will. But, IR isn't something our claims team or carrier are concerned about at the moment. In fact, we've seen many instances in which the use of IR helped prevent or defend against claims.
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