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Basic Risk Management for Home Inspectors

We’ve all seen a movie with a character obsessed with cost cutting or maximizing productivity. Some of us have even been lucky enough to watch this character work his micromanaging magic firsthand in our own workplaces. Risk management is another area where a lot of people turn a blind eye, assuming it’s only the domain of the office’s anal-compulsive mid-level executive.

Smart home inspectors know this isn’t true, though. Basic steps to manage risk during home inspections are important for preventing claims against you. Here are a few measures for home inspectors to manage liability risks without serving as the inspiration for a character in an employee or coworker’s screenplay:

Use a Thorough Pre-Inspection Agreement

Collaborate with your attorney to create a pre-inspection agreement and have every client sign it prior to inspection. Define the aspects your inspection doesn’t cover or guarantee. Many home inspectors aren’t engineers, exterminators, or geologists; they can’t provide the same specific, in-depth inspections that specialists can. Your home inspectors don’t have X-ray vision (unless you are reading a screenplay) permitting them to see into walls and beneath the ground. Inspectors do have tools they can utilize such as thermo cameras and testing, however if something is not visual it is usually not covered in an inspection.

Create a Record of Inaccessible Areas

When home inspectors cannot access areas that do require inspection, it must be documented. Home inspectors should always go on the record—in writing—to say a certain area(s) were inaccessible and that access and subsequent inspection are necessary to ensuring there isn’t concealed damage.

Inform Clients of the Severity of Problems

Explain problems and their severity clearly. Recommend an expert in a specific area to come out and give a professional opinion on how something should be fixed or repaired. Your inspector is there to inspect the property not to fix the problems they may report on. The inspector may note what problems may be expected if they do not address them. Inform them about any safety risks, how the damage may compound or spread if they delay repairs. Make sure every deficient condition and your recommendations are in your inspection summary report (including narrative and checklists) as well as any action items.

Avoid Identifying Sewage Disposal Responsibility
Home inspectors are generally not required by law or even encouraged by association-sponsored standards of practice to identify whether sewage is handled privately or by the municipality. Still, many include a determination in their reports. Unless your state’s laws or local association standards direct otherwise, avoid this practice. If, for some reason, you feel compelled to include a determination, provide a source for the information and qualify that it has not been verified.

Get Visual Documentation of the Inspection

Whether it’s with a camera or a video camera, create a visual record of home inspections. Far more often than not, such documentation from the time of inspection settles disputes in favor of the home inspector.

Don’t Admit Guilt

An apology or otherwise indicating you may have missed something during a home inspection is an admission of guilt. If a client gets in touch with a complaint, simply provide assurance that you’ll look into it immediately. Look back over your report and return to the home to evaluate the merits of the claim. If you feel you have a claim or incident to report to the insurance company notify them or your representative immediately. They will help you create a thorough written and visual documentation all along the way and prepare your official response.