Wouldn’t it be great if everyone we dealt with in our businesses (and our lives) saw things from our point of view? Whenever there was a problem, we would talk it out, they would quickly see things our way and the issue would miraculously disappear! Unfortunately, that’s not the way that things work in the real world. We are certain to experience problems in our businesses that cannot be resolved with a simple phone call and a few persuasive words. Sooner or later, one of these problems will result in a lawsuit, and we will be called upon to defend ourselves.
Defendability. It’s not a word often heard in everyday conversation, yet it’s of extreme importance to those in the business world. Merriam-Webster identifies defendability as “capable of being defended with good reasoning against verbal attack.” In business, we not only have to worry about verbal attack (which nowadays involves social media), we must also be on the lookout for legal attack.
Smart businesses realize that lawsuits are inevitable, and they take appropriate actions to help lessen their occurrence and reduce their possible impact. Following this thought process, we should take some time to evaluate the potential landmines that we may encounter in our business and start to make contingency plans for their occurrence.
Imagine what would happen if we were faced with a lawsuit: what’s going to happen, and how will we handle it?
Would we be able to locate the inspection report?
Could we put our hands on that specific inspection contract?
Would we feel comfortable having our inspection report picked over by attorneys?
How would we handle the stress?
These are all important factors to consider, and our answers may dictate how well we do in court.
Once threatened with a lawsuit, we have a limited number of ways that we can add relevant information to the case. We have already produced most of the documentation that will be considered in court: our inspection report, our contract and any other documented correspondence that has taken place between us and the plaintiff.
So, is there anything that we can do to increase our confidence when answering the preceding questions?
While it’s impossible to completely eliminate all problems from our businesses, there are some steps that can be taken to help lower our risk when faced with a problem and/or a lawsuit. The following 8 tips are small, intentional changes to our processes than can help lessen the possibility of future legal issues. If and when we do find ourselves in court, these small changes can help improve the chances that things will go our way, increasing what we will call our defendability score.
Smart business people realize that they should take advantage of every available opportunity to better their chances of business success. This includes taking the time to evaluate our processes at every level, identifying the areas where we can make changes and thereby increase our chances of success. We shouldn’t be afraid to change the way we do things when we discover a better way to achieve our intended result.
All humans are wired to be apprehensive to change. Familiarity is comfortable: it’s a known entity, a no-brainer. But that should never become an excuse for not making changes to our process, especially when that change will help to advance our business. Nothing will move our company to the back of the pack more quickly than refusing to upgrade when the time comes.
If something new comes onto the scene, like a new home inspection software, that is miles ahead of what we’re currently doing, we shouldn’t let our fear of change keep us from bettering our home inspection product. We shouldn’t be afraid to make those needed adjustments when the benefits of an upgrade outweigh the discomfort of the change. It’s always in our best interest to present the most professional and well-rounded home inspection package possible.
If benefit > discomfort, then do it!
Developing a good defendability score begins with the first tip: use a home inspection contract. Contracts exist to define the terms of a business transaction, letting both parties know what’s expected of them in a business relationship. They allow both parties to examine the terms and document the fact that both parties agreed to those terms. A strong contract can be an invaluable asset whenever we have problems in our business. It’s imperative that we use a contract, and that we use one every time we perform an inspection.
The second tip is to review the content of our contracts. Ideally, we should have a dedicated contract for each type of business transaction (general inspection, wood-destroying insect inspection, stucco inspection, radon test, re-inspection, etc.) While “catch-all” contracts do exist, having additional extraneous information in the contract could make it harder to defend in court. If we are performing a stucco inspection, why would our inspection contract include language about radon?
Our contracts should be regularly reviewed and revised, changing as laws and procedures are updated. We should have our contracts reviewed by a qualified, local attorney and be sure that our insurance providers have updated copies of all our inspection contracts. It’s possible that our insurance provider may even have a contract for us to use, and may offer a discount if we use it.
The best contract, however, is useless unless it’s signed. Our third tip is to make sure that we get the contract properly signed. Best practice is to have the contract signed prior to the inspection, which is now required by most insurers. If not, it should definitely be signed prior to emailing the report.
Always remember:
Once you release the inspection report, your client
no longer has any incentive to sign your contract.
As our client (typically the home buyer) is the person that we are contracting with, be certain that our client is the only person who signs the inspection agreement. The only exception to this rule would be if their representative (typically a real estate agent) has verifiable power of attorney in the transaction.
The advent of online digital signature services (like Docusign and new services built into some home inspection software packages) have made it easier to deliver contracts to our clients, automated the process of backing up our inspection contracts and reports, and decreased the need for power of attorney in real estate transactions. Using a digital signature service to handle our contract is a relatively painless (and inexpensive) way to manage this important aspect of our business.
Delivering the inspection contract to our client prior to the inspection adds to our defendability score and is our fourth tip. Presenting the contract ahead of time allows the client a reasonable amount of time to review the document and ask questions if necessary. By doing so, we lessen the possibility that a disgruntled client could argue they had little or no choice but to sign our contract at the home inspection, opening the possibility that they can argue that they signed the contract under duress. (Plaintiffs often successfully argue that they signed the inspection contract under duress, meaning that they had no choice but to sign the contract because they were at the end of their inspection period and needed the home inspection report for negotiation purposes.)
The (seemingly) simple act of giving a client reasonable time to review the contract ahead of time, offering them the option to ask about negotiating terms and giving them time to choose a different inspection company if necessary, can effectively take away one of their most powerful arguments in any possible court case. Coincidently, we will find that by providing more facts and information to our client, we may actually reduce the incidence of problem-causing misunderstanding between us and our clients.
The fifth tip deals with the actual inspection report and the quality of our report plays a big role in our defendability score. Professional, user-friendly reports, complete with a reasonable number of pictures, proper grammar, spelling and punctuation, and more than the minimally required amount of information are critical to defending ourselves in contentious situations. While testing one outlet per room may be legal according to our state or association standards, it certainly doesn’t lend credibility to our argument that we are a qualified professional when defending ourselves in court.
Even if we can easily understand what is meant by the hieroglyphics used in our inspection report, if the average person cannot understand our report without a translator, imagine what a judge or jury will think when the opposing attorney cherry-picks the most obscure references in our report to demonstrate how little we actually helped his clients. Follow the direction provided by the old acronym K.I.S.S.: keep it simple, stupid. By producing a professional report, easily understood by our client (no matter what their education level), we can easily increase our defendability score.
If you make something idiot-proof, someone will just make a better idiot.
Unknown author
Increasing our knowledge and inspection skills (our sixth tip) is easily overlooked as a way to increase our defendability score. Knowing what we are doing (and why we are doing it) can go a long way to minimizing the problems we’ll face in our business. Think about how much more knowledgeable an inspector we are now compared to the inspector we were walking into our first inspection. We have gained knowledge through a combination of education and experience. By maximizing the amount of education that we receive, we may be able to “jump the curve,” making up for the valuable experience that is typically only gained through time on task. The more knowledge that we possess, the better inspector we are and the lower our chances of experiencing problems.
Better inspector + fewer problems (for everyone involved) =
increased perceived value (for everyone involved)
Our seventh step is a relatively small expense that, in the big picture, takes a minimal amount of set up time, can reap rewards beyond compare, but is (amazingly) overlooked by most people: setting up automated backup. Our records (i.e.: contracts, reports) should be digitally backed-up, preferably in multiple locations (online, portable storage, etc.). Using an online storage providers typically costs less than $100 a year, and once initially set up (which usually can be done in as little as 10 minutes), is something that happens automatically. Automation in our business can help to lessen our workload and increase our defendability score. And don’t we all want a lighter workload and reduced stress?
The last step (number eight) to increasing our defendability score is to show that we value our clients by following up with them after the inspection. An action as small as touching base with them by email, after they have received the inspection report, can go a long way to lowering our number of problems. While most of our clients will never respond, simply showing that we care about their welfare will help to cement us in their mind, possibly buying us a bit more “good will” when problems (inevitably) occur, and maybe even garnering us a future referral or two. This is a process that also can be helped by automation, lessening the amount of work involved.
Problems are an inevitable part of life, and our business life is no different. By making a few adjustments to our procedures, and automating as much of this process as possible, we can easily increase our defendability score, lessen the possibility of problems, increase our amount of business, and maybe even reduce the level of stress in our lives.
Less stress? Now who wouldn’t want that?
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Thanks, Joe
