Risk Management
Loss Prevention Checklist

The following steps have proven effective at avoiding complaints and lowering the liability of home inspectors.

Two points emerge: First, according to risk management experts, loss prevention is as much about communication as it is about understanding the systems of a building. They stress that expert knowledge is vital but so is the ability to communicate your findings clearly to your clients. Second, setting the stage for a positive, complaint-free inspection requires setting reasonable expectations in the minds of your clients before the inspection begins. This is accomplished by taking the time to explain the scope and limitations of your report up front.

Pre-Inspection

• Provide a copy of your inspection agreement ahead of time including the standards and code of ethics you abide by.
• Explain the nature and scope of the inspection; that it is limited to readily visible conditions and is not an engineering inspection.
• Highlight key provisions such as limitation of liability and non-warranty.
• Always ensure that the inspection agreement is signed by the parties: the real estate agent may not be considered a party.

At the Inspection

• Encourage your clients to attend the inspection.
• Encourage your clients to participate and ask questions.
• Explain and document your observations clearly and fully.
• Take care not to orally dilute the significance of a problem condition identified in the report.
• Send a copy of the report to the client directly via certified mail. Remember to keep the report during the statute of limitations period applicable in your area.

This Loss Prevention Checklist is provided by the insurance professionals at the OREP Insurance Services, offering E&O insurance for inspectors, appraisers and other real estate professionals: www.orep.org.