Washington State Licensing meeting at Dept. of Agriculture in Olympia, WA on Dec 13.


**DATE: **November 9, 2007 ** **

**TO: **SPI Industry Representatives ** **

**FROM: **Cliff Weed, Compliance Program Manger
Pesticide Management Division ** **

**RE: **Meeting to Discuss Limiting Liability in Contracts ** **

It has come to the Department’s attention that certain inspection firms have clauses in their contracts with clients that limit their liability to just the cost of the inspection.

The Washington Pesticide Control Act (RCW 15.58.460-465) requires Structural Pest Inspectors to obtain and maintain evidence of financial responsibility in the form of errors and omissions insurance policies, surety bonds, or a combination of both in a total amount of not less than $25,000 or not less than $37,500, depending on the form of financial responsibility, in order to be licensed in this state. The purpose of the financial responsibility requirement is to protect people of the state who do business with structural pest inspectors.

It is the position of the Washington State Department of Agriculture, with advice from the Attorney General’s Office, that when such a clause appears in an executed contract, the financial responsibility of the inspector has fallen below the level required by RCW 15.58.460, and the structural pest inspector is in violation of state law by failing to meet the financial responsibility requirements.

WSDA would like the opportunity to discuss this issue with involved industry members before determining an appropriate course of action. We request your attendance at a meeting that will be held:

December 13, 2007 at 10:30 a.m.
Conference Room 259
2nd Floor, Natural Resources Building
1111 Washington St. SE
Olympia, WA 98504

RCW 15.58.460

Structural pest inspector — Evidence of financial responsibility required — Exemptions.

</B>(1) The director shall not issue a license to any individual who intends to act as a structural pest inspector until evidence of financial responsibility, required and described in subsection (2) of this section, is furnished by the applicant or the business employing the applicant. Licensed commercial applicators that have met the requirements of RCW 17.21.160 and their licensed commercial operator employees are exempt from this financial responsibility requirement when performing specific wood destroying organism inspections. Public employees licensed to perform structural pest inspections are exempt from this licensing requirement when acting within their official capacities.

 (2) Evidence of financial responsibility, consisting of one of the following, must be provided and maintained as a condition of licensure:

 (a) An errors and omissions insurance policy, the amount and terms of which are consistent with the requirements of RCW [15.58.465](http://apps.leg.wa.gov/RCW/default.aspx?cite=15.58.465)(1)(a);

 (b) A surety bond, the amounts and terms of which are consistent with the requirements of RCW [15.58.465](http://apps.leg.wa.gov/RCW/default.aspx?cite=15.58.465)(1)(b);

 (c) A surety bond and an errors and omissions insurance policy, the amount and terms of which are consistent with the requirements of RCW [15.58.465](http://apps.leg.wa.gov/RCW/default.aspx?cite=15.58.465)(1)(c);

 (d) An assigned account, the amount and terms of which are consistent with the requirements of RCW [15.58.465](http://apps.leg.wa.gov/RCW/default.aspx?cite=15.58.465)(1)(d);

 (e) Any other type of evidence of financial responsibility identified by the director by rule that provides coverage equivalent to that provided by any of (a) through (d) of this subsection.

 (3) Evidence of financial responsibility must be supplied to the department on a financial responsibility insurance certificate, surety bond form, assigned account form, or other form prescribed by the director with regard to evidence provided under subsection (2)(e) of this section.

Has this issue come up with any other states that have an insurance/bond requirement?

Is anyone planning on attending this meeting?

Hi to all,

Paul, yes it has, Massachusetts inspection laws forbid you from having any kind of limitation of liability clause in your contract.



I have had a lot of calls on this today.

The letter addresses Pesticide Control Act and relates
only to Structural Pest Inspections.

It is my opinion that if fought we would lose. It is clearly
the intent of the law to provide a means of relief for someone
damaged by a poor inspection. We had the same situation in
NJ where inspectors must carry E&O insurance and the court
ruled the LOL clause to be invalid.

The law only applies to pest inspections and not the home
inspection. One could simply state in the inspection agreement
that the LOL clause does not apply to the Structural Pest Inspection
report (if standalone) or any applicable sections of the Home
Inspection Report (if embedded).