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Follow on Google News | Home Inspectors Liability & an Alternative to the High Price of Traditional Litigation & ArbitrationInspectors are vulnerable to being named in a lawsuit. How can an inspector avert lawsuits before they happen?
By: jfarsetta What can a professional home inspector do to protect himself from frivolous claims? Home Inspectors can purchase E & O Insurance which protects them for claims arising from allegations of wrongful acts, errors and omissions in their inspections. Whether or not an inspector decides to carry E & O insurance is a personal decision unless the state the inspector lives in requires it. Even if the inspector decides to carry E & O, how does he/she protect themselves if there is a gap in their coverage? What about if the inspector provides ancillary inspection services such as radon testing, termite inspections and mold inspections? As an inspector who carried E & O for many years, the specter of a lawsuit weighed pretty heavy in the back of my mind. I have always prided myself in performing thorough inspections, and consider myself to be an educated and competent inspector. I am not alone in this. There are literally thousands of competent inspectors who pride themselves in performing quality inspections for their clients. In an effort to quell my concerns about litigation, I started to think about how I could avert a lawsuit before it happened and thought about arbitration. Through my research on arbitration as an alternative to the courts, I found that arbitration services tend to be rather costly, even though they are often still less expensive than legal services. Some arbitration firms charge over $1000. The other reality, I soon discovered, was that none seemed to specialize in inspection litigation which means that in cases where a dispute arises between a home owner and an inspector, there would be a learning curve while the arbitrator became educated about the inspection industry which would likely raise the cost of this arbitration. This is where, I believe, a need existed for a low cost, fixed-price mediation and arbitration service dedicated exclusively to the inspection industry, with neutrals that are intimate with the workings of the inspection industry. The challenge is to keep the cost down. Inspection Arbitration Services (IAS) does it by making the service subscription- IAS requires that the consumer make the first serious move. They have skin in the game, and have a burden of proof that many cannot achieve. We have a record of over 50 potential cases that never went to arbitration or file when we coached the complaining party how to prepare their case. Unlike the insurance company who is looking to get out of the mess as inexpensively as possible, the claimant must gather and put forth his evidence. Arbitration is NOT like insurance. It is a means to provide cost-effective alternatives to traditional litigation. An arbitration clause is useful in that it is there for BOTH parties. Inspectors can’t lie to our neutrals, because they are extremely knowledgeable regarding contracts, contract law, construction, and inspection. Inspection arbitration is all we do. We are absolutely neutral, and the service is non-binding, which still leaves disputants the option to sue in the event they do not like the outcome. It’s like mediation, with evidence, discovery, and a mock trial. It is cost-effective. Should the decision be rejected by either side, and it goes to trial, the first thing a judge will ask is whether you tried to settle differences out of court. What do you think the judge (and law clerk) will think when it is revealed that you went out of your way to avoid clogging the court's calendar, and have a fair decision which is being ignored by the plaintiff? There is no lost time from work, no court costs, no face-to-face intimidation, and no travel. It's is fairly simple to analyze a complaint remotely; it comes down to the SOP, the contract, and the report. It is my belief that inspectors are the most knowledgeable professionals involved in the real estate transaction. We carry the most liability. We are often paid the least. We are relied on by the client, and are often the final say in whether a deal goes through or not. Unfortunately, we often have the largest target painted on us. I believed that the time had come for inspectors to have an alternative to the high price of traditional litigation and arbitration. I launched Inspection Arbitration Services to answer this need. We are experienced and independent, and are one of the best kept secrets in the inspection industry today. By Joe Farsetta, CMI http://www.inspectionarbitrationservice.com http://www.jfarsetta.inspectionarbitrationservice.com © Copyright 2009 # # # Inspection Arbitration Services is the #1 choice of inspectors for effective, on-line, alternative dispute resolution. We are a premier nation-wide arbitration & mediation service dedicated exclusively to the residential & commercial inspection industries. Unlike much higher priced arbitration services, IAS is unique in that it is subscription- End
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