Inspection Arbitration Services, only $90/year for InterNACHI members.

[Richard W. Washington]

Originally Posted by mboyett

Just to be clear...INACHI members pay $90/yr (for now) plus someone pays $300/complaint plus office expenses...right?

And to also further clarify. Office expenses includes

Additional fees my be applied for copying, shipping/mailing, conference calls, telephone calls, other legal fees, notifications and other related administrative services.

Guess that these costs would pale in comparsion to an E&O deductible of 5k.

[Billy Boerner]

Originally Posted by rwashington

And to also further clarify. Office expenses includes

Additional fees my be applied for copying, shipping/mailing, conference calls, telephone calls, other legal fees, notifications and other related administrative services.

Guess that these costs would pale in comparsion to an E&O deductible of 5k.

Again this is how I understand it. $90 a year then $300 if a claim is made. Richard do you carry E&O?

[Billy Boerner]

By the way it's a great service guys. I'm signing up as soon as I get back from IRAQ.

[Joe Farsetta]

Billy,

Its a FANTASTIC service. We have also been compiling documents and data which we will likel be assembling into a monthly newsletter for those who subscribe.

Let me tell you this... I just finished crafting an article on the heels of the analysis of a case, where the decision in favor of an inspector in lower court was later reversed on appeal. The reasone were eye openng, and affect all of us. I dissected the case and summarized why the courts did what they did. I'll also tell you that once you read it, you will review your inspection agreement and some business operations, for sure.

As far as the service is concerned... YES, it's $90 for NACHI members. Some rules of evidence will require hard copies, as will other legal dosuments, so the costs of mailings are, naturally not included. Same goes for copies. The complaning party pays the up-front costs which go to our neutrals.

Great service...

[Richard W. Washington]

Originally Posted by bboerner

Again this is how I understand it. $90 a year then $300 if a claim is made. Richard do you carry E&O?

Yes I do. TREC began requiring it in 08.

[dmcauley]

Mr. Farsetta,
I like this idea. Is there language we can insert into our present agreement for this type of service?

My current agreement states:
1. The parties agree that the maximum liability for PRIORITY ONE HOME INSPECTIONS, LLC d/b/a Home Check America or its agent, arising from the failure to perform any of the obligations stated in this agreement, is limited to an amount NOT TO EXCEED THE FEE PAID FOR THE INSPECTION. Client waves any claim for consequential, exemplary, special or incidental damages or the loss of the use of the home/building even if the Client has been advised of possibility of such damages. The parties acknowledge that the liquidated damages are not intended as a penalty but are intended (i) to reflect the fact that actual damages may be difficult and impractical to ascertain; (ii) to allocate risk among the Inspector and Client; and (iii) to enable the Inspector to perform the inspection at the stated fee.

I really want to fortify the language with the addition of the arbitration service.

Thanks for your assistance.

[Joe Farsetta]

Dennis,

Be careful how much you put into that agreement. The language cant be oppressive or unconscionable. Also, is all one needed to do was put a limit of liability clause into an agreement to indemnify oneself... there would be no need for E&O insurance.

[dmcauley]

Joe,
I agree. What I'm looking for is "new" language that I can incorporate the use of arbitration in the inspection agreement. Does the blending of the two arbitration services have such language? Not looking to re-invent the wheel, just make better use of it. Does INACHI have such language in their inspection agreement? If so, why not use it.

If current language, which my attorney wrote all of it, can be changed to incorporate the arbitration clause, I am all for it.

Thanks for your assistance.

[Joe Farsetta]

You can only compel someone to use the services of IAS if you are a subscriber.

Cant buy fire insurance after the house is on fire as they say. The reason we can keep the price so low ($350 to arbitrate) is based on the subscriber base. AAA charges $750 and higher to arbitrate... sometimes much higher.

Sample language is already on the IAS website (www.inspectionarbitrationservice.com)

[dmcauley]

Thank you Joe for getting me that valuable information. It is what I wanted all along. I will evaluate and make my decision from all the information on the website and your experience.

[Joe Farsetta]

Dennis,

An example of the types of neutrals we employ include construction experts, contracting officers (contacts and contract law), inspectors, and attorneys who are also contracting specialists with construction experience.

Again, our specialty is focused solely on the inspection industry.

[Darin Redding]

As I understand it, if our current insurance carrier requires binding arbitration we cannot use IAS as they are non-binding according to their website.

[James H. Bushart]

Whether the arbitration is binding or non-binding is usually up to the opposing parties. IAS has performed binding arbitration hearings and can when both parties agree to make it so.

[Darin Redding]

Thanks James. Seems like legalize on the IAS website:

Our arbitration is non-binding; the parties remain free to pursue their claims either through the courts, or by way of a binding arbitration., although in practice, a settlement is the most common outcome.

So why say it's 'non-binding' then? Statements like the above make me nervous.

My insurance carrier sent me the following, and says that I need to put this into my agreement:

ARBITRATION: Any dispute, controversy, interpretation or claim including claims for, but not limited to, breach of contract, any form of negligence, fraud, or misinterpretation arising out of, from or related to, this contract or arising out of, from or related to the inspection or inspection report shall be submitted first to a Non-Binding Mediation conference and absent a voluntary settlement through Non-Binding Mediation to be followed by final and Binding Arbitration, if necessary, as conducted by Construction Dispute Resolution Services, LLC or Resolute Systems, Inc. utilizing their respective Rules and Procedures. If you would like to utilize the Mediation or Arbitration services of another dispute resolution provider other than one of those so stated please submit your recommendation to us for our consideration. If the dispute is submitted to Binding Arbitration, the decision of the Arbitrator appointed there under shall be final and binding and the enforcement of the Arbitration Award may be entered in any Court or administrative tribunal having jurisdiction thereof.

NOTICE: YOU AND WE WOULD HAVE A RIGHT OR OPPORTUNITY TO LITIGATE DISPUTES THROUGH A COURT AND HAVE A JUDGE OR JURY DECIDE THE DISPUTES BUT HAVE AGREED INSTEAD TO RESOLVE DISPUTES THROUGH MEDIATION AND BINDING ARBITRATION.

So I wonder if IAS would back the inclusion of such a statement into my agreement (of course, changing out 'Construction Dispute Resolution Services, LLC or Resolute Systems, Inc.' for IAS).

And once an arbitration clause is included in our agreement and signed by our client it begs the question - would this afford us better or 'like-kind' coverage as what we would find in a typical E&O policy?

[James H. Bushart]

Originally Posted by dredding

Thanks James. Seems like legalize on the IAS website:



So why say it's 'non-binding' then? Statements like the above make me nervous.

My insurance carrier sent me the following, and says that I need to put this into my agreement:



So I wonder if IAS would back the inclusion of such a statement into my agreement (of course, changing out 'Construction Dispute Resolution Services, LLC or Resolute Systems, Inc.' for IAS).

And once an arbitration clause is included in our agreement and signed by our client it begs the question - would this afford us better or 'like-kind' coverage as what we would find in a typical E&O policy?

Arbitration services are less expensive....not only to file, but in attorney fees and court fees, as well. They are also more timely....with the usual case resolved within 90 days of being filed.

Now....if your insurance company is trained to use the legal system as a means of determining when it should settle (usually, for the amount of your deductable) they will consider an arbitration service as a "risk" and prefer to avoid it.

The answer, if you want E&O coverage, is to find the E&O carrier who will embrace arbitration. Then, you will have the best of both worlds and are less likely to be burned by frivolous claims and be assured that your case (and, particularly, your position on the facts) will be heard by someone who knows the inspection business. You may not always win your case no matter which direction you take on this issue, but arbitration makes the frivolous cases less costly.