Recommendations in Home Inspection Reports: 6 Ways to Limit Your Liability
By Alyssa Cink
Writing reports is about more than getting jobs done. It’s also about presenting yourself as a reliable, trustworthy source whose findings your clients can depend on. Indeed, a well-written inspection report can turn the tide from an overwhelming house hunt to a confident and informed purchasing decision.
While it’s common to focus on how your work affects your clients, it’s equally important to consider how it affects you. This is especially true for your recommendations. The language you use for making recommendations in your reports can either mitigate your risk or open you up to additional liability. To help you limit your liability, we’ve compiled six best practices for writing recommendations.
Tips for Report Recommendations
1. Avoid the word “monitor.”
One simple practice an inspector can adopt is omitting the word “monitor” from their recommendation language.
If you advise a client to “monitor” a defect for further deterioration or development, and that deficiency worsens before the client can act, then the claimant may assign the blame to you. Many of InspectorPro’s claims have involved exacerbated damages that claimants believe could have been avoided, had their inspector suggested fixing the issue sooner.
According to our claims team, any defect significant enough for you to include in your report should be significant enough to warrant further evaluation and repairs by an appropriate professional.
2. Consistency is key.
When properly met, your Standards of Practice (SOPs) can help limit your liability and defend you against claims. While some inspectors argue that the minimum standard defined in their SOPs prevents them from offering a complete service, remember that exceeding these standards opens you up to additional risk. As such, if you choose to exceed them, then it helps to adopt consistent practices from inspection to inspection.
For example, home inspectors are not required to describe how severe a defect is. Our claims team suggests that if you identify the severity of one defect in the report, then you should do so consistently for every other defect. If you’re uncertain about your ability to be consistent across reports, then it may be best to avoid this practice altogether.
In the event of a claim, any inconsistencies between your actions and your report recommendations can be used against you. For example, your client could point to a defect that wasn’t described like the others and accuse you of misleading or misinforming them. Or, if you complete a task that exceeds your SOPs for one client, but not the other, then your insurer will have a harder time defending that the former task was outside your scope.
3. Set a time frame relative to property closure.
When home inspectors leave recommendations for further evaluation, they often forget to give their clients a time frame. Because inspectors aren’t required to identify how problematic an issue is, clients and realtors are left to decide how soon they should address the issue. As a result, these issues are often not addressed until after the property is closed. Once again, clients may blame their inspector for improperly informing them about serious repairs.
To avoid this scenario, our claims team advises home inspectors to include a clear, easy-to-find statement–either at the beginning of their reports or alongside their recommendations–advising clients when to perform suggested evaluations before the contingency period expires. Such a statement could read:
If we made a recommendation for further evaluation, that evaluation should be performed prior to the end of your contingency period.
4. Do not predict the age or remaining life expectancy.
Inspectors should also avoid estimating how old a specific system is or how long a component will last.
SOPs do not require inspectors to do such predictive reporting. Furthermore, anticipated life expectancies for structures, like roofs, don’t consider extraneous circumstances, like regional weather conditions. Such conditions can prevent the structures from reaching a manufacturer’s predicted age. Thus, home inspectors open themselves to additional liability when they make recommendations based on estimated age and longevity.
For instance, depending on your inspection location, it may be rare to see a roof actually make it to the end of its designed life. A roof with a 20-year life expectancy is more likely to last that long in an area with mild weather. In regions that experience heavy rain or snow, however, that same roof may require replacement after 12 years.
Rather than giving a specific number of years that a structure has left, our claims team encourages inspectors to manage their risk by describing the structure’s general condition. For example, you may describe a roof as being in good, fair, or poor condition. You may even say that it appears to be in the first or second half of its life. But don’t provide a specific age or remaining life estimate.
5. Do not provide detailed repair suggestions or cost estimates.
Home inspectors want to set their clients up for success. Following this inclination, it can be tempting to provide detailed instructions for making repairs and anticipating repair costs. However good the intentions are, this practice can cause problems for the inspector later.
For example, imagine you’re writing an inspection report and you recommend structural repairs. To help the client, you include instructions for repairing that structure and estimate $800 in repair costs. Later, after the property’s closed, your former client attempts to make those repairs and accidentally causes additional damages. The project costs exceed your $800 estimate, and, to make matters worse, the homeowner must also pay to fix the damages they incurred from attempting to follow your instructions. The former client may hold you accountable and demand you make up the difference.
As a general rule, don’t make recommendations or cost estimates for specific repairs. Either of these practices could open you up to liability.
6. Have additional insured endorsements.
When you refer business to another company, you expect them to perform quality services for your clients. But what if the business who received your referral made a mistake or performed poorly? If the client files a claim against them, what’s stopping them from blaming you, too, for making a bad recommendation?
Before you recommend a client seek out additional services from another business, ask that business to add you as an additional insured on their insurance policy. If a client names you in a claim against that company you recommended, the company’s policy would also cover you and your business.
Note that the terms of the policy, including insurance limits, specifies what coverage you can receive. So be sure to understand their insurance policy and its limits.
Write Reports That Protect You
When it comes to protecting yourself against claims, don’t leave anything to chance. Evaluate your report recommendations to ensure you’re providing the most helpful materials for your clients and your risk management.
InspectorPro Insurance is the leading provider of home inspector insurance in the nation. Why? Above all, we recognize that obtaining or switching insurance providers can be stressful for you. What’s more, we understand that you, as a home inspector, have unique needs when it comes to adequate claims protection.
For this reason, InspectorPro offers tailored insurance for your home inspection business at a reasonable price. And, since our team of licensed professionals specializes in insurance for home inspectors, we are able to give you the personalized attention you deserve. Moreover, we offer benefits like free pre-claims assistance, diminishing deductibles, early claims reporting discounts, and a risk management blog. In short, insuring with anyone else simply isn’t worth the risk.