One Clause Too Late

Note: The Managing Risk column with InspectorPro Insurance provides home inspectors with tips to protect their businesses against insurance claims

The following is a real home inspector’s errors and omissions insurance claim from InspectorPro’s archives. To protect the insured’s identity, all identifiable characteristics—including names, associations, and locations—have been altered or removed.

Nearly eight years after buying a home, a former inspection client was standing on the large wood deck overlooking her backyard. 

Suddenly, the homeowner fell through the deck and hit the ground hard 10 feet below, the rest of the structure collapsing on top of her. Her spouse rushed her to the hospital, where she was treated for serious injuries.

In the span of one day, the home that had been their haven for eight years became the source of a legal nightmare. And as far as the homeowners were concerned, it all pointed back to their home inspector.

The Claim

In this real claim, the homeowners sued their inspector for having “negligently and proximately caused serious physical injuries … by failing to adequately inspect the deck.” The home inspector reported the lawsuit to us, his insurance provider, and our claims team promptly got to work reviewing his inspection report and contract. 

His best defenses included his warning about the deck, his limitation of liability clause, and his arbitration provision.

The clients ignored his advice to have the deck further inspected.

Not only did the inspector document water and insect damage, which are not uncommon for a deck that’s 50-plus years old; he also recommended the owners repair multiple steps for safety purposes and seek further inspection from a qualified contractor. Furthermore, his report photos showed exactly where to find those defects.

The buyers chose not to act on his warnings and advice, allowing the deck’s condition to worsen over eight years.

His agreement limited his liability.

The home inspector’s pre-inspection agreement included a limitation of liability clause, which capped his financial responsibility at $450, the cost of the inspection. 

He named arbitration as his preferred dispute resolution.

His agreement also included a dispute resolution clause, a clause that defines how and where disputes will be resolved. It requested arbitration in his local county. 

Without a dispute resolution clause, he might have faced litigation in an unfavorable location hours away, or in front of a mediator or arbitrator who was unfamiliar with his work. 

A Critical Mistake: No Statute of Limitations Clause

Home inspection reports reflect a snapshot in time. They document conditions that are visible and accessible for a small window of a single day. A report you wrote five or 10 years ago would say very little about a home’s conditions today.

That’s why a statute of limitations clause is important. It defines a specific timeframe in which your client can bring forth a claim, usually a year or two after the inspection date. It protects you from being drawn into a messy conflict over a report that’s no longer accurate. Without it, your defense will likely default to whatever your state’s law enforces. 

By not implementing a statute of limitations provision, the inspector’s defense defaulted to his state’s discovery rule. This means the clock started ticking when the injury was discovered, not after the inspection took place. 

As a result, even though the inspection took place almost eight years earlier, the inspector’s contract left him exposed for the client’s injury. Had his agreement limited claims to one year from the date of the inspection, the lawsuit might have been dismissed immediately, like with a denial of liability letter.

The Claim’s Current Status: Ongoing

The inspector thoroughly documented the deck issues, limited his liability to his inspection fee, and defined arbitration as his resolution strategy. Still, his missing statute of limitations clause complicated his defense. 

This claim has been ongoing for nearly two years and is in arbitration. It demonstrates how a single contract mistake can outweigh multiple well-written provisions and even the best inspection reports.

What are the most common home inspection
contract mistakes inspectors make?

By learning to recognize and prevent these five common errors before they happen, you can position your business for the strongest possible defense.

1. They’re using outdated contracts that no longer
      reflect current state law or regulations.

Inspectors who operate with unprofessional or DIY contracts often assume every agreement is acceptable everywhere. But because states often enforce their own standards or contract laws, you can’t use the same pre-inspection agreement in all states. 

Here are a few examples of state law variations, accurate as of January 2026:

Texas: Inspectors must follow the Texas Real Estate Commission (TREC) standards of practice (SOP). If you’re inspecting a property in Texas, your agreement shouldn’t utilize any other SOP.

New Mexico: Many states allow inspectors to limit their liability to the price of their inspection or double. But in New Mexico, the Home Inspector Board sets a minimum insurance limit. If you limit your liability to anything less than that minimum, the clause will be deemed invalid. As of January 2026, that minimum is $250,000.

Multiple States: The limitation of liability clause is one of the most valuable provisions you can have in your pre-inspection agreement. However, it is not permitted in several states.

Moreover, while your agreement may have been compliant when you created it, it may not be now. Many inspectors make the mistake of not updating their agreements when state laws change. Failing to consider your state’s most current laws and regulations could turn an easy resolution into a complicated defense, as seen in this case study. Or worse, courts could void your agreement and rule it unenforceable.

Pro Tip: Get your inspection agreement from a professional source that regularly researches changing contract legal requirements and best practices and updates you accordingly.

2. They’ve excluded important clauses or written
      them improperly. 

Contract provisions are designed to protect you. 

But including them without knowing your state’s laws isn’t the only big contract mistake we see at InspectorPro. Some aren’t present at all; some are written in such a way that their terms become unfair to the client filing the claim. 

When that happens, those terms become difficult or impossible to enforce. So even if you intended to limit your liability or time-bar a claim, unreasonable provisions can ultimately strip you of those protections.

Pro Tip: Make sure your pre-inspection agreement comes from experts who understand which clauses can best protect your business, why they’re effective, and how to write them so they work when you need them most.

3. They don’t tailor their scope to that
specific inspection.

One inspection can look very different from another. Your client might add on an ancillary service to a standard inspection, or they might only want that ancillary service, changing the entire scope. 

If your scope in your contract doesn’t change, your client won’t know what to expect. Unclear expectations, in turn, create disappointed clients and demands for compensation.

Instead of copying and pasting one scope for every agreement, tailor your scope to each inspection. It improves your customer service by setting clear expectations. In turn, clearer scopes prevent misunderstandings, improve client trust, and decrease your likelihood of getting a claim. 

Pro Tip: Before issuing a contract for your client to sign, customize it for each inspection. Tailoring each agreement protects you from promising services you won’t provide or excluding ones accidentally.  

4. They don’t get their agreements signed before
      the inspection.

If you don’t have a signature, don’t start the inspection.

This is the most damaging contract error we see. You can have the strongest, most thorough pre-inspection agreement in the state. But if it isn’t signed, your agreement could be unenforceable. Every protective clause in your inspection contract hinges on your client’s signature. 

If they sign after the inspection starts (or not at all), and they file a claim, their counsel could argue the client never agreed to your terms or agreed under unfair conditions. As a result, a court could void your agreement and leave you defenseless.

Pro Tip: Get clients to sign before every inspection, every time. If they don’t sign, reschedule or cancel the inspection. 

5. They don’t save inspection assets like their
      pre-inspection agreements.

As this claim demonstrates, your liability doesn’t end when you submit your inspection report. Claims can arise years later. Toss your records too early, and you won’t have anything to reference if a past client sues.

We encourage inspectors to store their photos, reports, and signed agreements for as long as possible. We recommend 10 years at minimum. But if you set up a secure digital cloud, saving them forever is even better.

Pro Tip: Store your signed agreements, inspection reports, and all photos in a digital cloud for at least 10 years but ideally forever.

Combat Common Contract Mistakes With
InspectorPro’s Model Agreements

You run your inspection business like a professional. Your pre-inspection agreement should come from professionals, too.

If you’re insured with us at InspectorPro, state-specific protection and premium peace of mind are just a few clicks away—at no additional cost. Our expertly crafted pre-inspection agreements are designed to help you tackle all the contract errors in this case study and more. With InspectorPro, you unlock:

An experienced team that’s studied and resolved your industry’s claims for 16-plus years.

Contract updates to stay compliant with changing rules and regulations in your state.

Legislation-tested and trusted contract clauses that have been proven to reduce your risk, set expectations, and facilitate conflicts.

Addendums that make tailoring your scope a breeze.

Advice on getting agreements signed before you inspect.

$1,500 deductible discounts if you’re using our model agreement and your inspection becomes a claim.

Currently insured with us? Contact the InspectorPro team to get your copy of our strongest pre-inspection agreement today.

Not currently insured with us? Scan the QR code or visit inspectorproinsurance.com to apply for a free quote. 

Opinions or statements of authors are solely their own and do not necessarily represent the opinions or positions of ASHI, its agents, or editors. Always check with your local governmental agency and independently verify for accuracy, completeness, and reliability.

Alyssa Guerra is the Marketing Content Editor for InspectorPro Insurance, which offers ASHI members exclusive benefits through its program: InspectorPro with the ASHI Advantage. Through risk management articles in the ASHI Reporter and on the InspectorPro website, InspectorPro helps inspectors protect their livelihood and avoid unnecessary risk. Get peace of mind and better protection with InspectorPro’s pre-claims assistance and straightforward coverage. Learn more at inspectorproinsurance.com/ashi-advantage.