The following is a real errors and omissions (E&O) case study from our home inspection insurance archives. To protect the insured’s identity, all identifiable characteristics from this small claims court defense—including names, associations, and locations—have been altered or removed.
When a home inspector prepared his small claims court defense, it was to discuss page 17 of the inspection report. Page 17, his clients argued, was riddled with inaccuracies like:
But there was no gas fireplace. The “fireplace” in the inspection report was actually a wood-burning stove. How could the inspector confuse a fireplace and a stove? Some of it was the seller’s responsibility at the home inspection.
“During the inspection of the fireplace, we overheard the seller tell the house inspector that it was a gas fireplace. We also heard the house inspector say it was odd that he couldn’t find the pilot light. After much difficulty, the house inspector finally got what he thought was the gas log lit,” the plaintiff wrote in their small claims complaint.
“In addition, the seller said he had a relative who was a fireman who inspected the fireplace every year, and he said it had always been safe and in perfect working order,” the client continued. “When I expressed concern about operating the fireplace on my own … my brother and the inspector agreed that my brother would need to assist me in getting it lit in the future.”
But in this small claims court defense, it wasn’t just lighting a fire that proved problematic. The fireplace was a stove that wasn’t up to code. Its opening lacked adequate clearance, the chimney top was too close to the roof, and the “makeshift” valve–presumably installed to make it look like a gas fireplace–was dangerous. A contractor estimated it would cost nearly $9,000 to make the stove safe, and the client blamed the inspector for not revealing the seller’s elaborate deception.
The home inspector reported the claim to us, his insurance providers. With the help of his inspection report and standards of practice (SOP), our claims team went to work preparing his small claims court defense.
Since he was appearing in small claims court, the inspector had the advantage of not needing outside defense counsel like attorneys. (No defense counsel often means cheaper resolutions, which are better for your wallet and your loss run.) Instead, our claims crew helped him prepare for his court date.
First, our team gave him general advice for succeeding in court. We mentioned things like never interrupting the judge or the claimant when they were speaking and what documents to bring to the hearing.
In addition to these small claims court tips, we outlined his argument on paper to keep him on track with the key points. We helped him summarize his position, defining his limited inspection scope and underscoring his lack of liability for code-related issues. We even combed his SOP and pinpointed five separate exclusions that proved the inspector was not required to determine code or installation compliance—let alone a specialized fireplace and chimney inspection. Finally, photos and notes from his report were instrumental in this small claims court defense. They demonstrated that the inspector had done his due diligence.
The preparation paid off. As soon as the inspector left the courtroom, he sent this brief email to our claims team: “DISMISSED! Thank you!”
No payout to the claimant. No payment to us—not even his deductible. A happy ending.
Not all claims have happy endings, and allegations that involve seller interference or anxiety at a home inspection can be particularly cumbersome. What can you do to avoid defending yourself in small claims court against meddling clients? Read our tips below.
When you’re a generalist who only has so much time in the house, you may be tempted to rely on what people tell you. But sellers—and buyers, agents, and home listings, for that matter—can be wrong. And you don’t want to spread misinformation.
In this case, the seller asserted they had a gas fireplace. Furthermore, the buyer alleged the seller modified the stove to make it look like a gas fireplace. But the inspector had his doubts. It wasn’t like any gas fireplace he’d seen, and he struggled to find the pilot light.
Deter a small claims court defense and don’t state something as fact if you’re not sure. If it’s unclear what something is or if it’s defective, say so in your report. This inspector, for example, could have written something like: “Fireplace present. Type unknown. Contact a fireplace and chimney specialist to evaluate type, functionality, and safety.”
Often, we talk about educating your clients so they know what to expect before, during, and after your inspection. But oftentimes, sellers need schooling, too.
“Why would it appear that some of these agents do not try and educate their sellers about what is taking place during an inspection? I can’t tell you how many times I have shown up to some impatient sellers that were appalled when I told them I would be [inspecting for] hours,” Chris Coffey of Tex Star Home Inspections wrote on Facebook’s Texas Home Inspector Support Group in 2018.
Many inspectors notice a tendency where sellers assume responsibility at the home inspection. This small claims court defense story is a prime example. By communicating your purpose and procedures, you can build trust with the sellers. That rapport, in turn, can manifest in less following you around and interfering with your findings.
When sellers insist on being your shadow even after you’ve set expectations, find a way to carve out alone time with your clients. Speaking with your clients one-on-one will allow you to speak openly and honestly about the home—and dismiss anything inaccurate the seller may have said.
“I usually tell the seller, ‘I would like to have a private conversation with my client. Can you excuse us? Or should we go outside?’” wrote Tony Cavaliero of Total Home Inspection in a comment on the same Facebook post.
Sometimes a seller’s home inspection anxiety won’t budge. In that case, you may need to go to a second location or talk to your clients later by phone. In the end, it’s worth avoiding a future small claims court defense, like the one in this case study.
“[I] had [an inspection] this week where I could not do a thing without the owner following or listening in—no matter what I said. I even had the buyer out near the curb trying to talk, and we couldn’t get any privacy. We kept getting interrupted,” Coffey wrote in the aforementioned post. “Ended up having to meet later at Whataburger to go over the inspection.”
Whether it’s page 17 or page 30, your inspection report is up for scrutiny–even if you perfectly follow your SOP. Luckily, a well-prepared small claims court defense can lead to favorable outcomes for home inspectors facing legal challenges.
That’s why errors and omissions (E&O) and general liability (GL) coverage are essential to your peace of mind and financial protection. Don’t settle for “makeshift” insurance that pretends to fit your needs but excludes the specialization, advocacy, pre-claims assistance, and state-specific pre-inspection agreements you need to thrive. Click here to learn why inspectors like the one in this story and thousands more choose InspectorPro.
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