Septic Biz Magazine
For Today's Onsite Pumping Professional
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Many portable sanitation businesses also do septic pumping. If you do septic pumping, you may also
do septic system inspections for your local real estate market. Many of my clients do septic
inspection work. As soon as they tell me they do inspections I cringe. The biggest problem is, I
usually don’t find out they are doing inspections until they have a problem with an inspection. A
normal General Liability policy does not cover you giving a bad opinion of the ability of a septic
system to work properly.
A General Liability policy only covers “accidents” that cause “bodily injury” and “property damage”.
If you just give bad advise there is usually no accident, bodily injury, or property damage. There is
just a lot of expense to replace a tired septic system, a mad real estate agent, and a large real estate
transaction that you just got real involved in. If you want coverage for your opinions, you need
Professional Liability insurance. This is also known as Errors & Omissions (E&O) insurance. If you
make a mis-representation of the status of a septic system and you don’t have Professional Liability
insurance, be ready for a battle (and a bill). You will probably be found responsible. You don’t need
to replace too many systems to take away all of your profits from this sideline operation.
do septic system inspections for your local real estate market. Many of my clients do septic
inspection work. As soon as they tell me they do inspections I cringe. The biggest problem is, I
usually don’t find out they are doing inspections until they have a problem with an inspection. A
normal General Liability policy does not cover you giving a bad opinion of the ability of a septic
system to work properly.
A General Liability policy only covers “accidents” that cause “bodily injury” and “property damage”.
If you just give bad advise there is usually no accident, bodily injury, or property damage. There is
just a lot of expense to replace a tired septic system, a mad real estate agent, and a large real estate
transaction that you just got real involved in. If you want coverage for your opinions, you need
Professional Liability insurance. This is also known as Errors & Omissions (E&O) insurance. If you
make a mis-representation of the status of a septic system and you don’t have Professional Liability
insurance, be ready for a battle (and a bill). You will probably be found responsible. You don’t need
to replace too many systems to take away all of your profits from this sideline operation.
Septic System Inspections...
Does Your Insurance Cover Mistakes?
The tough part about this problem is the
cost of Professional Liability insurance has
gone through the roof. My clients used to
pay about $1500/year… four years ago.
Now the cost is about $2000, for the same
policy. You might say this is too
expensive. YOU ARE RIGHT! Most of the
people doing inspections don’t make that
much off of inspections in a year! I haven’t
seen many inspection businesses that can
raise their fee enough to cover this
additional cost. So, you must “self insure”
this exposure if you don’t want to purchase
the insurance.
cost of Professional Liability insurance has
gone through the roof. My clients used to
pay about $1500/year… four years ago.
Now the cost is about $2000, for the same
policy. You might say this is too
expensive. YOU ARE RIGHT! Most of the
people doing inspections don’t make that
much off of inspections in a year! I haven’t
seen many inspection businesses that can
raise their fee enough to cover this
additional cost. So, you must “self insure”
this exposure if you don’t want to purchase
the insurance.
I am telling you this so you can decide for yourself what you want to do with inspections. Many of my clients have
stopped doing inspections when they found out insurance did not cover them. Many other people started making
sure they had a “Hold Harmless” agreement in their contract with the person that requested the inspection… for
every job. This is a disclaimer that says you aren’t responsible if the system really doesn’t work, after you said it
should. This helps, but doesn’t solve the problem. If you are going to do this type of work you MUST have this
disclaimer in your contract with your customer. It is about the only thing you can do to TRY to prevent an ugly
situation.
Just keep in mind, if you are doing these inspections do everything possible to do a complete and thorough
inspection and put in writing exactly what you are inspecting. If you are not inspecting the leach lines… say so! If
you don’t, and the leach lines aren’t functioning properly… guess who gets to pay for replacing them? You
probably won’t want the insurance, so protect yourself as much as you can by being prepared and smart. Send
experienced personnel to do this work. Understand you must do a professional job of inspecting because that is
what your customer is paying for. Also understand, if you make a mistake, you may be held liable. Work with all of
the parties concerned and try to prevent the loss from getting too blown out of proportion.
Mark Herring is a Certified Risk Manager and a Certified Insurance Counselor. Mark has specialized in the portable
sanitation industry for the past 11 years. He insures more portable sanitation businesses than anybody in the United
States. Mark can be reached at 1-800-208-6912 or fax 800-215-0147 or email at markh@heffgroup.com
SEPTIC MAGAZINE FOR PROFESSIONALS