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

Yes I do. TREC began requiring it in 08.

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. **

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.:wink:

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.

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)

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.

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.

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.

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.

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.

Okay. I do have E&O and it is my insurance carrier that is requiring a binding arbitration clause.

But again, if I force my clients into arbitration (that being the only re-course if it is included in my agreement and they sign it), do I need E&O at all?

I like IAS since it’s less expensive. I just need to know with certainty that IAS provides binding arbitration. If they do, and I can see in writing that they do, my E&O provider will accept them.

Email your request to Joe Farsetta.

Darin,

We are in the process of updatng the website to clarify that the arbitration may be binding or non-binding, depending on what the parties agree to.

As to the arbitration clause, we dont care what it looks like or says. that is up to you.

Thanks Joe. Out here in CA is seems that we need to include some specific verbiage (surprise, surprise).

I did get your email with an example so thanks for that.

Mind sharing that email Joe sent you. I’m looking at incorporting IAS with E&O as well.

usairmen@gmail.com

As Joe says he don’t care what it looks like. But I bet your insurance carrier will. Also, Allen Insurance (my insurance carrier) provided an arbitration clause that CREIA is expecting to use when they revise their agreements. Strange though it does not include California specific language. Time to call a lawyer.

here is Joe’s example clause:

I like IAS already. Joe seems like a standup guy and contacted me several times today to get this up and running. Good customer service IMO.

Darin,

If you don’t mind me asking how long have you been in the business and what type of coverage do you have for what cost through Allen? I’m always looking for good coverage.

In business less than a year. I am on Allen’s pay-per-inspection which is not the most cost effective. The rates are posted on their website. Good people over there also.

Thanks Darin. By the way great logo. DON’T change it. :slight_smile: