The Home Inspection Book: A Guide for Professionals By Marcia Darvin Spada Copyright, Thomson/South-Western 2003, Revised 2006
Chapter 2 The Home Inspection Business 2 Chapter 2 The Home Inspection Business
Chapter 2 The Home Inspection Business 3 Chapter 2 Key Terms Corporation Doing business as (d/b/a) Errors and omissions insurance Independent contractor Latent defect Limited liability company Partnership Professional liability insurance Sole proprietorship
Chapter 2 The Home Inspection Business 4 Types of Business Organizations Individual owner (sole proprietor) Limited or general partnership C or S Corporation Limited liability company or partnership A sole proprietor may be personally liable for judgments against the company
Chapter 2 The Home Inspection Business 5 Latent Defects Hidden or concealed defects that cannot be discovered by ordinary examination or inspection Buyers may accuse the inspector of failing to notice the problem A leaky sewer pipe may cause damage to a number of property components
Chapter 2 The Home Inspection Business 6 Professional Liability Insurance Professional liability Insurance Covers individuals and business from claims by third parties Errors and omissions insurance Professional liability insurance covers claims of negligence against a professional business
Chapter 2 The Home Inspection Business 7 Comparison of Employee and Independent Contractor EmployeeIndependent Contractor Receives a salaryNo minimum salary Company withholds social security, income and unemployment tax Individual pays taxes Company can pay for extrasSets own hours Pays for most expenses- receives no extra compensation Enters into contract with company/owner
Chapter 2 The Home Inspection Business 8 Operating a Home Inspection Office Comply with license requirements Income and expense projection Bank account-income/ operating Business name Furniture, equipment, tools Contract forms/print matter Advertising and referral possibilities
Chapter 2 The Home Inspection Business 9 Home Inspection Employment Types of properties serviced Travel issues Employee or independent contractor Expenses compensation Equipment Available work Computer system Company support