Iron Clad Contract

Forgive me if this question had been asked. I am new to the business- recently completed all of iNachi first year requirements, have been on 3 “tag along” inspections and recently purchased Home Inspector Pro. I would like to get started, but the cost of E&O insurance is slowing me down. Is there an “iron clad” contract that would make a lawsuit (California) unlikely? I am incorporated, but I want to make sure I protect my personal assets. I have heard that there are two types of home inspectors: those who have been sued, and those who will be! Please advise.

No such thing as Iron Clad. NACHI has a great contract, but nothing is bullet proof. You have taken most of the right steps especially being incorporated. Make sure that you don’t do anything that could pierce the corporate veil. Keep all business and personal separate.

How inspectors can avoid lawsuits.](

Great info Nick

Thanks, Nick

incorparating is not protection for you as the one who did the home inspection.

Yes it is. Why wouldn’t it be?

It is protection from someone placing a judgement against your personal property.

Since I have no corporate assets, I only want to protect my personal assets

Your personal assets aren’t at risk if the inspection was provided by your incorporated inspection company.

I’m the all-time king of asset protection… and I’m a bit of an ****hole on top of it. Basically indestructible from an asset protection standpoint. When I tell someone “so sue me,” I’m essentially inviting them to waste their money.

Nice- Then I’ll follow up with a “dumb” question: If I am incorporated and the corporation fee is $800 per year, why would I ever purchase E&O insurance for thousands?

When someone sues you they are likely to sue you (the person) and not your company.

Nick-what say you? Really? In California, I don’t think so

Is there an “iron clad” contract that would make a lawsuit (California) unlikely?

I wish there was, that creature does not exist here. In California anyone can sue anyone for any reason, the lawyers sort it out in court.

Your best bet is do the best inspection possible for your client. Remember here in CA you are on the hook for 4 years!!


Consumer fraud is the only thing that can pierce the Corporate Vail that I am aware of. Due to the tax structure of an s corp., I would do an LLC and have insurance. The insurance is the pot that the bottom feeders will attack. If you do not have it, they will go looking for some other pot to attack.

Whether you are an S corp. or an LLC someone can still file a suit against you. They then try to pierce the vail. If they are unsuccessful, you will have hemorrhaged legal fees and will have probably settled the case to get them off your back.

Get insurance and do a good job. Combine that with communicating with you client, good or bad and you should stay out of court.:cool:

You can count on 1 or 2 hands the number of times a corporate vale has been pierced. You almost have to commit a crime.

Yes I agree, consumer fraud is the only thing that I can think of. There may be others, I just am not aware of them.