Cool. I appreciate that. Thanks.
I think it is worthy to note that, while refusing to post an “uncertain” number of actual law suits, you did post a “certain” number of *anticipated *law suits; to wit: all inspectors. Is this simply typical sales hype or does the data (of which you are presently uncertain) support this claim?
I’ve taken Ben to task here in a couple of my last posts, but I would like to state that FREA has produced a very helpful CD for their insured on how to avoid lawsuits. I used to be insured by FREA and they sent this excellent CD with the policy. I want to give credit where credit is due, and though I don’t like the fact that insurance companies will not go to bat for their insured, at least this insurance provider gives some helpful advice on how to avoid lawsuits; which, after all, is what we are all trying to do.
The information on the CD gave an interesting breakdown/percentage of claims by system or component that was insightful. There was other useful tips in the presentation as well. It was helpful in that I started to emphasize those areas where most of the lawsuits are originating both in my disclaimers and report writing.
Ben, if you could make that CD available somehow through this message board, I’m certain that it would generate some positive posts on the topic of avoiding litigation.
Not a problem! Hey, I’m here to help you guys out and help you understand the insurance, it’s purpose, and it’s function. Not to defend and support insurance carriers and their methods. Keep in mind, FREA is NOT an insurance carrier, we are a provider. Two different things. We act on behalf of our insureds in the best way we can. We are not the advocate for the insurance carrier.
Hi all,
Just a comment from me 
For a new inspector, E&O is pretty redundant because when you first start out it is VERY hard to justify the high price for it. I will keep my other comments about it out, but did I mention it was very expensive? And if you do use it the likelyhood if being “dropped” is very high? Anywho just my 0.02 on the $$$ for it;-)
Troy: I think that is a fantastic idea. Good call. Now I know that inspectors are watching the CD 
Let me see what I can do!
Interestingly enough, Troy, it was stated by a vendor who sells software designed for the purpose of avoiding litigation that it is his opinion that being insured, itself, invites law suits. He stated he carries it, himself, merely out of conscience.
His exact words “…this is a point that I’ve made over and over. The indisputable truth is that the best way for an inspector to avoid being sued is NOT to carry insurance.”
Good Gosh. ](,)](,)](,)](,)
I might have to take up drinking again. :shock:
It doesn’t seem like jumping to conclusions to me when you plainly stated the course of action the insurance company will persue. Your own example was that if a frivoulous lawsuit for $20,000 could be settled for a fraction, you’ll do it. What’s not to understand? What other conclusion can be made but that you will not stand behind your insured even in the case of frivoulous claims. This is why I will always be adamantly opposed to mandatory E&O insurance.
I think there’s some truth to that. Especially in states where there are insurance requirements. Every attorney certainly is well aware of what an Inspector is carrying. Therefore, you could make the argument that it puts a target on your back. But if you have a client who feels as if they are entitled to some sort of money as a result of some alleged mistake by the inspector, they very well might still sue. Regardless of whether the inspector is insured. Keep in mind, a plaintiff can come after you PERSONALLY after they exhaust your business assets. That’s frightening.
Troy,
Here’s a good practical application to expand on my point. Take a look at this story if you have not seen it already. It was published in the Communicator. http://communicatormagazine.com/page147.aspx
As did my attorney. The attorney who reviewed my contract defends h.i.'s and is also involved in construction claims litigation. When I asked him he told me that I would be more likely to get sued if I carried E&O insurance. He said that if you take away the pot of gold, lawsuits tend to go away because few attorneys will take home inspection lawsuits on contingency.
He stated that Oregon is a strong contract state, all to say that consumers need to be careful about what they sign here, because the terms of agreements tend to hold up in court. He also stated that home inspection lawsuits on average result in damages in the $4000-$9000 range with attorney fees running in the $6000-$12,000. Whereas construction defect claims are much, much higher. And best of all, there are very few home inspection lawsuits in Oregon.
This is Oregon specific information, others should not jump to conclusions about their own state. Rumor has it that the state to my south has a much different predisposition to lawsuits. Too much heat, way too crowded, and not enough clean water and fresh air I suppose.
Ben,
So far, we have established to your agreement, the following:
Insurance coverage invites lawsuits.
Settlements are made by insurance companies, even in cases without merit, to save money.
“Decent” insurance companies will drop an inspector who has had more than two (exact number still undetermined) settled claims.
In a state that mandates insurance coverage by law, the inspector will be forced out of business by meritless (frivolous) claims.
This is not good.:shock:
And you wonder why I don’t post a ballpark number of claims, lawsuits, etc., etc. All I am saying is that the arguement could be made that carrying insurance can place the bullseye on your back. And the argument can also be made that not carrying insurance is absolutely nuts. It comes down to personal preference when you’re doing business in a state that has no insurance requirements. Otherwise you have no choice. I’m not trying to defend the insurance company and their actions, keep that in mind.
No, sir. I don’t wonder.
I believed you when you told me that you would post it as soon as you got to your desk where the information is kept. Are you there yet?
I’m workin on it
What then is the $300,000 or $500,000 Liability Insurance requirement in Oregon if not E&O, what is the difference there?
Myself I beleive that Oregon has one of the best written HI’s Laws in the Country.
Ben,
When is FREA going to offer Occurance type E&O?
The State of Oregon requires Inspectors to carry $300,000 to $500,000 of General Liability (Property damage and personal injury sustained by someone OTHER than you the Inspector). I also believe they require either a $10,000 or $15,000 bond. The CCB MUST be named as an additional insured.
Lewis:
We would look into offering an Occurrence based policy. But the one thing stopping us is that it’s generally $500-$600 more than a Claims made.
So let me raise this question for discussion: Is an Occurrence policy something that you as Inspectors would like? And willing to pay more for? Let me know and I’ll see what we can do.