Lessons in Risk Management
The Elevator and the Death of a Child
Although some insurance claims are due to negligence on the part of the inspector, most are not. Most are the result of comments made with the best intentions, which develop into something unforeseen, as in the following example.
An inspector performed an inspection on a home that had an elevator.
In his report under the “Doors/Stairs” section, the inspector wrote, “Consult contractor regarding remodel/installation of stair and removal of elevator. Elevator appears functioning and satisfactory at time of inspection.”
Under the “Walls” section of the report, he wrote, “Wall structure not plumb in elevator area, structure appears modified. Consult contractor regarding repair/remodel/installation of stairs between levels and returning the laundry/bathroom to original layout.”
In both sections, he marked “Consult specialist.”
These comments would seem to meet or exceed the standards of practice and clearly alert the client that something was wrong and in need of correction.
The elevator was made of plywood, and it did not have doors. It was installed by the sellers — without a permit. Of course, it is not the inspector’s duty to research permits or even report on elevators.
A short time after the buyer (a single parent) moved in, her 8-year-old son was pinned between the floor and a heating duct while the elevator was moving. After his mother freed him, the child died in her arms.
We are not aware of any residential home inspector standards of practice that require any inspection of an elevator whatsoever. Most standards exclude any requirement to report on any system or component not specifically addressed in the standards of practice.
The moral of this story: Because the inspector mentioned that the elevator was functional at the time of the inspection, we, his insurer, lost all ability to defend the claim made by his client.
It did not matter that the inspector recommended removal of the elevator — particularly in the case of a child’s death.
The inspector’s insurance company spent $100,000 in defense expenses and finally settled the matter for $140,000.
It is unusual to have an elevator in a home, but the inspector could have protected himself with the following comment. Some comment was necessary because, in this particular situation, the installation of the elevator had affected the integrity of the structure.
“The home has an elevator. Elevators are unique systems and are outside the scope of our standards of practice and it was not inspected. We are not qualified to inspect elevators and recommend you have a qualified specialist contractor inspect the elevator prior to settlement/close of escrow.”
Going even further, he could have recommended:
“The elevator should not be used until it is certified safe by a licensed and qualified elevator technician.”
Normally, to help home inspectors avoid claims, we recommend being silent on systems and components that are not required to be inspected by the standards of practice referenced in the inspection report. Nevertheless, when you have a potentially life-threatening situation, it is our recommendation that you use comments like the preceding to protect yourself and to put your client on notice to have the system evaluated — even if they chose not to do so.
Sometimes, the issue is even more important than
avoiding a claim.
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