Errors and Omissions Insurance : A Quick Synopsis
About Dave Moncavage
Unfortunately, accidents happen. Even the most meticulous professionals can make a simple mistake, whether it’s missing an important deadline, making a bookkeeping error, or just plain overlooking something. That’s why consummate pros can find themselves embroiled in costly and lengthy legal battles no matter how careful they are. Nobody wants to face litigation. No matter who you are or how conscientious you are about your responsibilities, you need to protect yourself and your business with e & o insurance.
What is E and O Insurance?
Sadly, even if a claim against you is completely groundless and is based only on a “perceived” error, it can cost you thousands of dollars in legal fees. Errors and Omissions insurance protects you and your business in the event you are held responsible for advice you gave, service you provided, or service you failed to provide. In addition to the legal expense, include your loss of wages. After all, you’ll spend your time defending yourself when you could be working. To work without e & o insurance is risky. Why risk your livelihood? E and o insurance can cover give you the protection and peace of mind you need.
Should you get Errors and Omissions Insurance Coverage?
If you are a professional providing services for a fee, then you face financial risk and should have e and o insurance. Simply put, it’s professional liability coverage used by agents, brokers, inspectors and the like who deal with financial transactions. Some states even require e & o insurance.
When Should you get E&O insurance?
As soon as you are working, you should have e and o coverage. You may think it’s wiser to put it off to some later date, but mistakes or conflict can happen anytime. It’s best you have e and o insurance at the onset.
Doesn’t my General Liability Policy Cover me?
If you have a general or commercial liability policy that covers “bodily injury” or “property damage,” it doesn’t cover service professionals comprehensively. Service professionals are involved in transactions that have unique risks—not to mention the possibility of huge financial losses by clients—which are not included in those policies. Errors and omissions insurance is comprehensive, offering service personnel complete protection.
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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.
This Sunday July 1st is the last day to register for early bird pricing for the Inspection Conference in Las Vegas. Use Code MGA-1923 for your registration Today and SAVE.
TAREI will be hosting their 2012 Summer Conference, and a wide variety of courses will be available to choose from. Try to attend as it is always a great chance to see peers, live education classes and enjoy Austing TX! REGISTER NOW! Don’t forget TAREI members receive a discount on their insurance through our program. Remember Elite for your E&O insurance!
InterNACHI Message Board Just topped 900,000 posts. Great job InterNACHI! Members check out the the June News letter! Need to join or want to receive a copy? Contact me at firstname.lastname@example.org and we will connect you right away.
HomeGauge has some very exciting things happening for home inspectors and we wanted to pass it along.
First, TRM is here. Time Released Messaging is now out and available. Find out more by visiting HomeGuage.com
Second, This is the final week to enter to win on the HG sample video report contest. You could win $500 in cash, just send your sample report with some video clips! For more information contact HG at email@example.com tell them Elite sent you!
Finally, remember that HG customers receive a discount on their insurance through our program and even more when you add home warranty!
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Sautrday May 12,th 2012 Arlington
Saturday, June 30th 2012 Austin
Visit www.tarei.com for more information
TAREI has listed their schedule so far for 2012 check back often for updates www.tarei.com
Elite MGA would like to thank Casey O’Malley and Associates and all attendees for another excellent convention! Always educational, fun, busy and worth the time! Thanks to everyone. Your Elite MGA Team!