Help! E & O Insurance & Disclaimer Form

[Nick Gromicko]

the problem is that Florida specifically removed any protection from being incorporated. Florida law states that
"No corporation or partnership shall be relieved of responsibility for the conduct or acts of its agents, employees, or officers by reason of its compliance with this section, nor shall any individual practicing home inspection services be relieved of responsibility for professional services performed by reason of his or her employment or relationship with a corporation or partnership."


That basically voids any protection due to being incorporated.

No it doesn't. That only prevents an inspector from being relieved personally of responsibility for failing to comply with that section by incorporating his/her inspection company. But it is not the inspector's personal assets that an inspector should be worried about protecting because no inspector should ever, ever have assets titled personally.

All inspection business should be conducted by one corporation.
All assets should be held by other corporations.

Never the twain should meet.

Corporations protect assets.

[Ben L. Garrison]

Originally Posted by gromicko

No it doesn't. That only prevents an inspector from being relieved personally of responsibility for failing to comply with that section by incorporating his/her inspection company. But it is not the inspector's personal assets that an inspector should be worried about protecting because no inspector should ever, ever have assets titled personally.

All inspection business should be conducted by one corporation.
All assets should be held by other corporations.

Never the twain should meet.

Corporations protect assets.

Sooooo... in other words, if you can "hide" your assets under another company "roof" then you really don't need E&O insurance except in states where it's required?

[Nick Gromicko]

Sooooo... in other words, if you can "hide" your assets under another company "roof"

Nope. Never try to "hide" your assets.... unless of course you are willing to lie under oath during your deposition (which I don't advise).

Leave all assets out in plain view of all, but titled and encumbered in a way that they are completely safe from creditors.

[Ben L. Garrison]

Originally Posted by gromicko

Nope. Never try to "hide" your assets.... unless of course you are willing to lie under oath during your deposition (which I don't advise).

Leave all assets out in plain view of all, but titled and encumbered in a way that they are completely safe from creditors.

Fair enough...

[Joseph Hagarty, CMI]

Originally Posted by gromicko

All inspection business should be conducted by one corporation.
All assets should be held by other corporations.

Never the twain should meet.

Corporations protect assets.

Obvious
that we Incorporated
with same Counsel...

[Joseph A. Ferry]

Originally Posted by rjack1

Can someone please answer my question? Does anyone have problems with customers signing the Pre-Inspection Disclaimer Form? And my E&O insurance requires this Disclaimer form to be signed. So if the disclaimer form is signed, why do I need the E & O Insurance? Thanks!

Originally Posted by Joseph Hagarty

What form are you referring to?
Contract?

I would like to know the answer to Joe's question.

[Vern Mitchinson]

The new rules in Alberta prohibit any inspector inspecting a home for a buyer unless he is licenced and is employed by a licenced HI business. The HI is prohibited from accepting payment from anybody other then the Licenced HI business he/she is employed by.
All agreements must have disclaimer clauses stating that mould and asbestos is not part of the inspection. There can be no time Limits on the liability of the inspection and no limits on the amount of liability. These articles are high lighted below in red.
Failure to comply makes the HI venerable to fines up to $100,000.00 and/or up to two years in jail.
The following is an excerpt from the Home Inspector regulations under the Fair Trading ACT administered by Service Alberta.

Home inspection contract
19 A home inspection business shall ensure that every home inspection contract
(a) is in writing,
(b) is legible, and
(c) includes the following:the consumer's name and address;
(ii) the home inspection business's name and licence number, business address, including street address, telephone number and, if applicable, fax number and e-mail address;
(iii) the name and licence number of the home inspector conducting the inspection;
(iv) the date of the contract;
(v) the date on which the home inspection is to occur;
(vi) the date the completed home inspection report is to
be provided to the consumer;
(vii) the address of the dwelling to be inspected;
(viii) if the contract does not include an inspection of any of the following features or components of the dwelling, a statement, to be initialled by the
consumer, indicating that fact:
(A) roofing, flashings or chimney;
(B) exterior, including lot gradings, walkways, driveways, retaining walls, patios and decks;
(C) structure;
(D) electrical;
(E) heating;
(F) heat pumps and cooling;
(G) insulation;
(H) plumbing;
(I) interior;
(ix) if the contract does not include an inspection of mould or asbestos, a statement, to be initialled by the consumer, indicating that fact;
(x) a statement that unless expressly stated in the contract, the contract does not include an inspection of any outbuildings or other structures not attached to the dwelling other than a garage or carport;
(xi) a statement that the inspection will be non-invasive unless the parties agree to specified invasive procedures;
(xii) if all or any part of the home inspection is to be subcontracted to another home inspection business, the name and licence number of that home inspection business and a statement, to be initialled by the consumer, indicating that fact.
Contract to be signed
20 A home inspection business shall ensure that before a home inspection occurs,
(a) the home inspection contract is signed by the home inspection business and by the consumer, and
(b) the name of each signatory to the contract is printed legibly beside or below the signature.
Contract to be provided to consumer
21 The home inspection business shall provide the consumer with a copy of the signed home inspection contract at the time the contract is signed.
Prohibited wording
22 A home inspection business shall not include a clause in a home inspection contract or home inspection report that
(a) limits the liability, or the amount of liability, of the home inspection business or the home inspector for breach of contract or negligence, or
(b) limits the time for making any claim against the home inspection business or home inspector.
Home inspection report
23(1) A home inspection business shall ensure that every home inspection report
(a) is in writing,
(b) is legible,
(c) addresses the condition of the following features or components of the dwelling, except for those that have been excluded by the home inspection contract under section 19:
(i) roofing, flashings or chimney;
(ii) exterior, including lot gradings, walkways, driveways, retaining walls, patios and decks;
(iii) structure;
(iv) electrical;
(v) heating;
(vi) heat pumps and cooling;
(vii) insulation;
(viii) plumbing;
(ix) interior, and
(d) makes recommendations on any identified deficiencies for each of the features or components referred to in clause
(c) that are included in the inspection, and anything else that is made part of the inspection.
(2) A recommendation to obtain an expert opinion meets the requirements of a recommendation under subsection (1)(d).
Report to be provided to consumer
24 A home inspection business shall provide a copy of the completed home inspection report to the consumer on or before the date set out in the home inspection contract.
Compensation for damage
25 A home inspection business shall compensate the owner or occupant of a dwelling for any damage caused by a home inspection of the dwelling unless
(a) the damage was reasonable and necessary to perform the home inspection, and
(b) the owner of the property consented in writing to the
damage to be caused by the home inspection.
Prohibitions
26(1) Neither a home inspection business nor a home inspector shall disclose the contents of a home inspection report, except
(a) with the written permission of the consumer,
(b) as required by law, or
(c) if, in the opinion of the home inspector, there is a serious health or safety risk.
(2) A home inspection business shall not enter into a home inspection contract if the home inspection would result in a conflict of interest for the home inspection business or a home inspector employed or otherwise engaged by the home inspection business.
(3) A conflict of interest under subsection (2) includes a payment from a person other than the person for whom the home inspection report is to be prepared.
(4) A home inspector shall not conduct a home inspection if the home inspection would result in a conflict of interest for the home inspector.
(5) A conflict of interest under subsection (4) includes a payment for a home inspection from a person other than the home inspection business.
(6) Neither a home inspector nor a home inspection business shall provide a consumer with an estimate of the cost of any repair or improvement to a dwelling as a result of a home inspection.

[Nick Gromicko]

(6) Neither a home inspector nor a home inspection business shall provide a consumer with an estimate of the cost of any repair or improvement to a dwelling as a result of a home inspection.

I like that part.

[Joseph A. Ferry]

Originally Posted by vmitchinson

Prohibited wording
22 A home inspection business shall not include a clause in a home inspection contract or home inspection report that
(a) limits the liability, or the amount of liability, of the home inspection business or the home inspector for breach of contract or negligence, or
(b) limits the time for making any claim against the home inspection business or home inspector.

This part is outrageous. This is what happens when you elect nannies to positions of power. They turn the entire country into wimps.

[Brian A. MacNeish]

Originally Posted by jferry1

This part is outrageous. This is what happens when you elect nannies to positions of power. They turn the entire country into wimps.

"22 A home inspection business shall not include a clause in a home inspection contract or home inspection report that
(a) limits the liability, or the amount of liability, of the home inspection business or the home inspector for breach of contract or negligence, or
(b) limits the time for making any claim against the home inspection business or home inspector."

Are you speaking against "(a)", "(b)" or both? I assume it's (b), the unlimited time to bring a suit against an HI since you have the "MYTH #2" article on your website.

[Joseph A. Ferry]

Originally Posted by Brian A. MacNeish

"22 A home inspection business shall not include a clause in a home inspection contract or home inspection report that
(a) limits the liability, or the amount of liability, of the home inspection business or the home inspector for breach of contract or negligence, or
(b) limits the time for making any claim against the home inspection business or home inspector."

Are you speaking against "(a)", "(b)" or both? I assume it's (b), the unlimited time to bring a suit against an HI since you have the "MYTH #2" article on your website.

Both. While I think it is quite unnecessary to limit one's liability, which see, I have no objection to someone's doing so.

But you're right about b. When are you going to be able to close the books on these idiot clients under this rubric?

[Nick Gromicko]

When are you going to be able to close the books on these idiot clients under this rubric?

Never. But why not make it dangerous for an "idiot client" to open the books 5 years from now by adding a clause to your inspection agreement whereby the client agrees that if he/she brings any action after ___ months/years, they agree to reimburse you for legal fees if you prevail?

In the states, it is tough to be awarded legal fees (unless the parties agree to those stakes)... so raise the stakes.