Insurance Innovator William Adams and Associates Packages First “All Purpose” E&O Policy for Building Inspectors with Infrared/Acoustic Patent License and Legal Consultation
ATLANTA, Sept. 6, 2012 /PRNewswire/ — A new all-inclusive insurance policy from William Adams and Associates will empower building inspectors nationwide to expand their businesses by offering additional services–such as energy audits, termite reporting, air quality testing and infrared scanning–to property owners. The policy will be the only one of its kind in the country bundled with a technology patent license and pre-claim legal consultation from InspectAll in-house counsel.
As the real estate sector continues to search for new paths to achieve stability and profitability, building inspectors, who are essential participants in nearly every residential and commercial real estate transaction, have been forced to expand their services and invest in new technologies. This process of evolution has produced a new breed of inspector equipped to offer clients everything from a basic “nuts and bolts” home inspection to a detailed energy audit or air quality testing. The list of services is ever expanding, remarked Stark Harbour, president of William Adams & Associates. Harbour has been providing special insurance options for inspectors for almost two decades.
“Nearly all building inspectors carry insurance, but most don’t realize that their coverage is limited and they have serious exposure,” said Harbour. “Most policies don’t cover air quality testing or energy auditing. Many policies do not cover new technology usage, including infrared cameras, and none include immediate review of potential claims.”
Niccole Barnes, senior account executive for Capitol Special Risks, Inc., agreed with Harbour regarding the increased risk for building inspectors. Her comments clearly underline the need for both insurance and the use of technology to minimize one’s risk exposure, even if the use of the technology exceeds the norm.
“Even though home inspections are strictly visual inspections at a precise moment in time, consumers believe an inspector should be able to see everything, similar to Superman,” said Barnes. “You can be sued for just about anything. This is where E&O insurance becomes invaluable. Even if an inspector follows the Standards of Practice, the home owner may find problems months later that could not have been seen by the inspector.”
As the intrinsic value of property becomes more important to buyers–for example, the structural components of the building, its energy efficiency and its air quality–inspectors have begun bundling their services at the request of buyers and real estate agents so that the overall inspection provided offers more information about the asset being purchased. Consequently, this also increases errors and omissions risk.
“It’s simple: The more the inspector takes responsibility for and reports on, the more chance he has of missing something,” Harbour explained. “An inspector’s risk is increased further when he picks up tools or uses inspection procedures that exceed the norm or fall outside the parameters of what is considered a general home inspection. The risk is increased when infrared technology is employed. We also found that inspecting when your coverage is inadequate is not the only risk that inspectors need to address.”
According to Harbour, building a policy that fits the needs of today’s building inspector begins with an analysis of their core and expanded services. This should include home and commercial inspections, mold and radon testing, energy audits, wood-destroying insect reporting and technology usage, among others. The next step is to work closely with underwriters to develop applicable coverage. To do so, one must understand the inspection process completely. However, Harbour’s research also found that there is additional litigation risk outside of errors and omissions and general liability. There is risk when using new technologies–a prime example is infrared camera usage where procedural patents might be required.
For years, the use of infrared cameras was not included or was specifically excluded from coverage. This is still the case in many instances. However, Harbour found that there is a very high risk of legal action being taken against inspectors that use infrared if they are not properly licensed to use it.
“We had our legal counsel research the validity of these patents, and they concluded that the patents are very real and that a proactive approach to licensing would be a win-win for all involved and a much less expensive course of action,” Harbour said.
A quick search of patent defense costs bears out what Harbour’s attorneys indicated. The cost of defense for a lone inspector could easily run into the hundreds of thousands of dollars if a patent infringement suit is filed. Thus, Harbour set out to create a positive option for licensing the patents and sought to bundle it with the “All Purpose” policy and legal consultation.
Harbour met with HomeSafe Inspection, Inc. and KPS, LLC, the two companies that own and manage the patent rights for infrared usage, and began the arduous process of developing a program that would satisfy the insurance and license requirements for all stakeholders. After 20 months, the package is complete, and the policy and license are now available under the brand InspectAll.
“The trick was to meet all legal requirements from both the insurance and the licensing sides of the equation,” said Harbour. “Then the price had to work for the inspector in every state in the country. This may have been the most difficult task, but we did it.”
Inspectors will find that the policy, including the infrared usage license, is comparable in price to every policy available in the country, even with the license and the legal assistance added. And the policies encompass a wide spectrum of coverages for building inspection. Inspectors will find that, even if they do not currently utilize infrared cameras or provide some of the services covered, the price is still the best available. The reason for this, according to Harbour, is that the insurance companies reduce their risk of exposure in several areas and they anticipate the volume of policies to be high since infrared use has increased substantially in the last five years.
For more information, visit www.inspectallins.com or call 800-869-8233.
Contact: Stark Harbour
SOURCE William Adams and Associates