Wouldn’t it be great if everyone you dealt with in your businesses (and your life) saw things from your point of view? Whenever there was a problem, you would talk it out, they would quickly see things your way and the issue would miraculously disappear! Unfortunately, that’s not the way that things work in the real world. You are certain to experience problems in your business that cannot be resolved with a simple phone call and a few persuasive words to adjust someone’s point of view. Sooner or later, one of these problems will result in a lawsuit, and you will be called upon to defend yourself.
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, you should take some time to evaluate the potential landmines that you may encounter in your business and start to make contingency plans for their occurrence.
Imagine what would happen if you were faced with a lawsuit: what’s going to happen, and how will you handle it? Would you be able to locate the inspection report? Could you put your hands on that specific inspection contract? Would you feel comfortable having your inspection report picked over by attorneys? How would you handle the stress?
These are all important factors to consider, and your answers may dictate how well you do in court.
Once threatened with a lawsuit, you have a limited number of ways that you can add relevant information to the case. You have already produced most of the documentation that will be considered in court: your inspection report, your contract and any other documented correspondence that has taken place between you and the plaintiff.
So, is there anything that you can do to increase your confidence when answering the preceding questions?
While it’s impossible to completely eliminate all problems from your business, there are some steps that can be taken to help lower your risk when faced with a problem and/or a lawsuit. The following 8 tips are small, intentional changes to your processes than can help lessen the possibility of future legal issues. If and when things do come to a head in court, these small changes can help improve the chances that things will go your way, increasing what we will call your 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 your processes at every level, identifying the areas where you can make changes and thereby increase your chances of success. Don’t be afraid to change the way you do things when there clearly exist a better way to achieve your 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 your process, especially when that change will help to advance your business. Nothing will move your company to the back of the pack more quickly than refusing to upgrade when the time comes. For example, if a new home inspection software becomes available that is miles better than the one you’re currently using, why let your fear of change keep you from bettering your home inspection product? Don’t be afraid to make those needed adjustments when the benefits of the upgrade outweigh the discomfort of the change.
If benefit > discomfort, then do it!
It’s always in your best interest to present the most professional and well-rounded home inspection package possible. Obviously, 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 they were both in agreement regarding these terms. A strong contract can be an invaluable asset whenever you have problems in your business. It’s imperative that you use a contract, and that you use one every time that you perform an inspection.
The second tip is to review the content of your contracts. Ideally, you 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 can make it harder to defend in court. If you are performing a stucco inspection, why would your stucco inspection contract include language about radon? Your contracts should be regularly reviewed and revised, changing as laws and procedures are updated. Have your contracts reviewed by a qualified, local attorney and be sure that your insurance providers have updated copies of all your inspection contracts. It’s possible that your insurance provider may even offer a contract review service that you can take advantage of at a discounted rate.
Even the best contract is no good if it’s not signed. Our third tip is to be sure that you get the contract properly signed. Best practice is to have the contract signed prior to the inspection, and it should (definitely) be signed prior to the delivery of the report.
Once you release the inspection report, your client
no longer has any incentive to sign your contract.
As your client (typically the home buyer) is the person that you are contracting with, be certain that your client is the only person who signs the inspection contract. 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 your clients, automated backup of your inspection contracts, and decreased the need for power of attorney in real estate transactions. Using a digital signature service to handle your contract is a relatively painless (and inexpensive) way to manage this important aspect of your business.
Delivering the inspection contract to your client prior to the inspection adds to your defendability score and is our fourth tip. Presenting the contract ahead of time allows your client a reasonable amount of time to review the document and ask questions if necessary. By doing so, you lessen the possibility that a disgruntled client could argue they had little or no choice but to sign your 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 your 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, you will find that by providing more facts and information to your client, you may actually reduce the incidence of problem-causing misunderstanding between you and your clients.
The fifth tip deals with the actual inspection report. The quality of your inspection report plays a big role in your 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 yourself in contentious situations. While testing one outlet per room may be legal according to your state or association standards, it certainly does not lend credibility to your argument that you are a qualified professional when defending yourself in court. And while you may easily understand what is meant by the hieroglyphics used in your inspection report, if the average person cannot understand your report without a translator, imagine what a judge or jury will think when the opposing attorney cherry-picks the most obscure references in your report to demonstrate how little your report 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 your client (no matter what their education level), you can easily increase your defendability score.
If you make something idiot-proof, someone will just make a better idiot.Unknown author
Increasing your knowledge and inspection skills (our sixth tip) is easily overlooked as a way to increase your defendability score. Knowing what you are doing (and why you are doing it) can go a long way to minimizing problems in your business. Think about how much more knowledgeable an inspector you are now compared to the inspector you were walking into your first inspection. You have gained knowledge through a combination of education and experience. By maximizing the amount of education that you receive, you 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 you possess, the better inspector you are and the lower your 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. Your records (i.e.: contracts, reports) should be digitally backed-up, preferably in multiple locations (online, portable storage, etc.). Using an online storage provider (such as Backblaze) 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 your business can help to lessen your workload and increase your defendability score. And don’t we all want a lighter workload and lessened stress?
The last step (number eight) to increasing your defendability score is to show that you value your 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 your number of problems. While most of your clients will never respond, simply showing that you care about their welfare will help to cement you in their mind, possibly buying you a bit more “good will” when problems (inevitably) occur, and maybe even garnering you 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 your business life is no different. By making a few adjustments to your procedures, and automating as much of this process as possible, you can easily increase your defendability score, lessen the possibility of problems, increase your amount of business and maybe even reduce the level of stress in your life.
Less stress? Now who wouldn’t want that?
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