5. Hold the inspector liable for missed problems. Inspection contracts tend to be minimalist documents, but they contain one critical piece of information: the inspector's liability if he fails to discover an existing problem with the house or property. In many cases, liability is limited to the cost of the inspection. So if you paid $300 for the service, that's what the inspector is obliged to reimburse you, even if you turn up a $3,000 problem the day after you move in.

Faced with this situation, you can protect yourself by hiring an inspector who carries insurance that covers not only damage to the property during the inspection but also losses due to "errors and omissions." To lock in those protections, it's vital that the contract call for binding arbitration. With litigation so expensive — and, in the case of a small contractor like a home inspector, not likely to be particularly rewarding — arbitration is the best way to safeguard your interests.

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