1. The Home Inspection Book: A Guide for Professionals By Marcia Darvin Spada Copyright, Thomson/South-Western 2003, Revised 2006

2. Chapter 2 The Home Inspection Business 2 Chapter 2 The Home Inspection Business

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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