New inspector

[Jeffrey A. Prince]

Hi
Im just starting my own home inspection company in the chicago area. I plan on joining nachi soon. Do you have any tips for how much insurance I will need ? Also how about reporting forms? I have been looking into allen insurance pay as you go program for new inspectors. I was wondering if the limits on the insurance were the norm. I also like the matrix report forms. What do you think ?
Thanks
Jeff Prince

[cwillick1]

I like matrix. when you join NACHI Legacy has free software you can use till you get going. not the greatest report though

[Blaine Wiley]

Originally Posted by Jeffrey A. Prince

Hi
Im just starting my own home inspection company in the chicago area. I plan on joining nachi soon. Do you have any tips for how much insurance I will need ? Also how about reporting forms? I have been looking into allen insurance pay as you go program for new inspectors. I was wondering if the limits on the insurance were the norm. I also like the matrix report forms. What do you think ?
Thanks
Jeff Prince

The inspector school you are atteding, have attended, or should attend will cover all of these areas.

[Dave Morris]

We have not carried E&O insurance in our 22 years of history. I believe in some states it is mandatory though. If it is not mandatory it is real easy....just dont miss anything The best insurance IMO is a combination of two things; learning how to CYA and being as thorough as possible.
We take the approach of "always inspect like there is someone looking over your shoulder" because they are whether it be at the inspection or 6 months down the road when they are occupying the house. I am not against insurance, just never felt the need for it.
Conversely, the field has expanded and legislation has taken over. As a new inspector, it may not be a bad idea in this day and age to get insurance at least until you develop a confort level. Good Luck!

[ebadofsky]

Jeff -

Give me a call when your schedule allows and I will share some reliable E&O information contacts with you.

Cheers,
Eric

[William J. Decker]

Give me a call, as well. More than happy to help a new guy.

[whandley]

Originally Posted by Dave Morris

We have not carried E&O insurance in our 22 years of history. I believe in some states it is mandatory though. If it is not mandatory it is real easy....just dont miss anything The best insurance IMO is a combination of two things; learning how to CYA and being as thorough as possible.
We take the approach of "always inspect like there is someone looking over your shoulder" because they are whether it be at the inspection or 6 months down the road when they are occupying the house. I am not against insurance, just never felt the need for it.
Conversely, the field has expanded and legislation has taken over. As a new inspector, it may not be a bad idea in this day and age to get insurance at least until you develop a confort level. Good Luck!

If you're sued and loose as a result of one of your inspections, you run the risk of loosing your home and any other assets you may have. If you have no assets your future wages and income may still be vulnerable as a result of the lawsuit.

I can't imagine being in the home inspection biz without general liabilty and errors and omissions insurance coverage.

BTW, being thorough and CYA will not always prevent a lawsuit. Sometimes you're drawn in by circumstances beyond your control. The cost to defend yourself in such a lawsuit, even though you're not at fault can be tens of thousands of dollars. Remember, when your business grows and you begin to perform hundreds or thousands of inspections, a lawsuit is going to occur, it's just a matter of time....

[bdoles2]

Originally Posted by Jeffrey A. Prince

Hi
Im just starting my own home inspection company in the chicago area. I plan on joining nachi soon. Do you have any tips for how much insurance I will need ? Also how about reporting forms? I have been looking into allen insurance pay as you go program for new inspectors. I was wondering if the limits on the insurance were the norm. I also like the matrix report forms. What do you think ?
Thanks
Jeff Prince

Welcome...you'll find the organization and message board to be a staple of your business. Ask just about any question and you'll get more help than you need.

Good luck!

[John McKenna]

Call if I can help.
The NACHI family at it's best.

[Bob Elliott]

Hi Jeff...What they all said Will Decker is the president of the local chapter and I recommend you simply sign up and come down to our local meeting and get together with fellow inspectors to continue learning and clear up questions you have in person.
To answer one of your questions as far as soft ware goes you will get many answers so why not simply do this.
Practice makes perfect and you do not need alot of expense to start out with unless you are $rich.
Go to Report Host.com where you can receive 15 free reports at no charge.
Practice ,practice then practice.
This will show you what may be missing in reguard to your expectation of how you would like your final product to look.You may be comfortable with Report Host.http://www.nachichicago.org/ look forward to seeing you there.

[Jeffrey A. Prince]

Thank you for all your help.

There was one more thing. Since I am Forming an s-corp i thought i was pretty much protected from losing any personal assets in a lawsuit. I have checked with the insurance company and I would be covered both personally and corporate, but i heard if your insurance limit runs out they can come after you personally? Is that true? I was thinking of putting all my assets under my wifes name. Just to be safe. People are so lawsuit crazy

Thanks
Jeff Prince

[William J. Decker]

Originally Posted by Jeffrey A. Prince

Thank you for all your help.

There was one more thing. Since I am Forming an s-corp i thought i was pretty much protected from losing any personal assets in a lawsuit. I have checked with the insurance company and I would be covered both personally and corporate, but i heard if your insurance limit runs out they can come after you personally? Is that true? I was thinking of putting all my assets under my wifes name. Just to be safe. People are so lawsuit crazy

Thanks
Jeff Prince

Better to form an LLC, and file federally (taxes) as an S corp.

Call me. I am in my office and can talk right now (12:13 PM, Wed.). See phone number below.

Hope this helps;

[Dave Morris]

Originally Posted by whandley

If you're sued and loose as a result of one of your inspections, you run the risk of loosing your home and any other assets you may have. If you have no assets your future wages and income may still be vulnerable as a result of the lawsuit.

I can't imagine being in the home inspection biz without general liabilty and errors and omissions insurance coverage.

BTW, being thorough and CYA will not always prevent a lawsuit. Sometimes you're drawn in by circumstances beyond your control. The cost to defend yourself in such a lawsuit, even though you're not at fault can be tens of thousands of dollars. Remember, when your business grows and you begin to perform hundreds or thousands of inspections, a lawsuit is going to occur, it's just a matter of time....

we do carry general liability insurance. I find some of the large tract builders are starting to require it around here to be onsite.
the way our company is set up, our personal assets/houses are safe from lawsuit. we have been sued twice in our history of over 20,000 inspections, both times being small claims. We won both cases. Nowadays our inspection agreement states the BBB mediation dept is the ONLY recourse for action against us. This wont completely protect us from say a $20,000 foundation repair we should of caught, but it is a large point in our favor since the client signs it. The last lawsuit was dismissed in small claims thanks to that. The client was trying to stick a damage claim against us a year after the fact on one of his low income rentals the tenants neglected. client stated his (bogus) case then when it was my fathers turn, he simply showed the judge the signed agreement with the line highlighted about the better business bureau. the judge looked at the client and said "you are in the wrong place, case dismissed".
above all though, if we legitimately miss something we will fix it gladly. it doesnt happen very often but nobodies perfect. with e&o, if you make a couple claims your premium soars or they may even drop you completely.
The way we see it, in 22 years we havent had a problem. that would equate to about 75 grand we havent paid in insurance(probably more given that we have 3 inspectors, and used to have 4 before grandfather retired)
Another advantage is my father is an Inspector/GC/Engineer. My brother and I are working on our GC's now. we have the ability to fix alot of what we might miss. (watch, im going to miss a million dollar house sitting on a sinkhole tomorrow just for saying that lol)
as a new and/or single inspector company, it probably is a good idea to have insurance. I am certainly not saying my way is the right way, but just wanted to share our point of view.

[whandley]

Originally Posted by Dave Morris

we do carry general liability insurance. I find some of the large tract builders are starting to require it around here to be onsite.
the way our company is set up, our personal assets/houses are safe from lawsuit. we have been sued twice in our history of over 20,000 inspections, both times being small claims. We won both cases. Nowadays our inspection agreement states the BBB mediation dept is the ONLY recourse for action against us. This wont completely protect us from say a $20,000 foundation repair we should of caught, but it is a large point in our favor since the client signs it. The last lawsuit was dismissed in small claims thanks to that. The client was trying to stick a damage claim against us a year after the fact on one of his low income rentals the tenants neglected. client stated his (bogus) case then when it was my fathers turn, he simply showed the judge the signed agreement with the line highlighted about the better business bureau. the judge looked at the client and said "you are in the wrong place, case dismissed".
above all though, if we legitimately miss something we will fix it gladly. it doesnt happen very often but nobodies perfect. with e&o, if you make a couple claims your premium soars or they may even drop you completely.
The way we see it, in 22 years we havent had a problem. that would equate to about 75 grand we havent paid in insurance(probably more given that we have 3 inspectors, and used to have 4 before grandfather retired)
Another advantage is my father is an Inspector/GC/Engineer. My brother and I are working on our GC's now. we have the ability to fix alot of what we might miss. (watch, im going to miss a million dollar house sitting on a sinkhole tomorrow just for saying that lol)
as a new and/or single inspector company, it probably is a good idea to have insurance. I am certainly not saying my way is the right way, but just wanted to share our point of view.

That sounds pretty reasonable. I, unfortunately live in California, where a small private LLC or INC or LLP won't protect your private assests. We also have over 1 million attorneys for a population of 33 million. As you can imagine, you can find an attorney who will file suit for almost any reason and do so on a straight contengency. I just can't sleep without my insurance security blanket!

[Ben L. Garrison]

Your corporate structure is really insignificant as far as liability is concerned. Rather, its purpose is more for tax implications. Your personal assets are at risk. While I have not read his books, it's my understanding that Dr. Keith Swift has publications that will assist you in protecting your assets. But like any professional, insurance is a safety net and a cost of doing business.

Allen's "Pay Per Inspection" program might be logical for a start up simply because it's tough to justify paying the annual cost of E&O when your business might be slow. But make sure you find out how long the insured inspection report is infact insured.