The answer is simple… to minimise risk.
It is important that inspectors can be relied upon to provide an acceptable standard of inspection and report. However, consumers have traditionally found a large variation in the standard of property reports giving justifiable concern.
To help inspectors meet their obligations, a report must clearly convey the inspection findings and also include any recommendation for further inspections and professional advice.
In respect of professional negligence, the highest incidence of insurance notifications and claims against the pre-purchase inspection industry are due to failed inspections and the use of poor paperwork.
Many complaints arise from consumer expectations not being met. For example, when a timber pest inspector finds no evidence of termites, the client often interprets this to mean that the property is free of termites. The inspector cannot guarantee this, as a standard timber pest inspection is limited to the readily accessible areas of the property. Therefore, for the client to have a realistic expectation, the report must clearly indicate what was inspected, and more importantly what was not inspected.
The best way to mitigate disputes and unnecessary disappointments is for the client and the inspector to enter into a written a pre-engagement inspection agreement. With the parties on the same wave length as to what service is being provided, the chances of having a dissatisfied client are substantially reduced.
The pre-engagement agreement once accepted, provides evidence of the actual terms of inspection and report. If a problem arises, the inspection agreement will assist in the dispute resolution process, especially if the inspector’s professional indemnity insurer needs to address a potential claim.
In conclusion, insurance premiums can only be kept low if there is a claims history that is acceptable to the insurer. It is in the interests of all industry participants to minimise the occurrence of claims to moderate the cost of insurance. This can best be achieved by adopting proven work practices including the use of good paperwork and procedures.
For an obligation free insurance quote for professional indemnity and public liablity including access to paperwork follow the link below.
Informative Note: (This note contains extracts from the copyrighted Report Systems Australia handbook series)