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Recent Cases Confirm Inspector Liability Is All About the Contract

by Isaac Peck, Publisher

“Laws, like houses, lean on one another,” Edmund Burke wrote a long time ago, not realizing it might have special meaning for home inspectors. At least where laws are concerned, we can see patterns in court decisions around the country, and from those patterns, take away important lessons for risk management.

In the last two years, a lot of what we’ve assumed to be true about home inspector-related liability has been proven correct— the foundations of risk management are clearly understood agreements and clearly delineated responsibilities.

Contracts Allocate Risk
Recent court decisions from the states of Washington, New Jersey, and Delaware offer a clear message to the real estate ecosystem in general, and home inspectors particularly: the way risk is allocated in contracts, especially inspection agreements and purchase documents, can make or break a legal claim.

In Apgood v. Plautz (Washington Court of Appeals, March 2024), a homebuyer named Robert Apgood sued both the sellers and the home inspector after discovering serious roof leaks post-purchase. The inspector’s report had noted the roof was “more than 20 years old,” but the report didn’t identify any water damage. Apgood claimed fraud on the part of the owners and negligence by the home inspector. The court, however, was not persuaded. Why? Because the purchase agreement and inspection addendum included clear waivers. Apgood had expressly waived further inspection rights and acknowledged he wasn’t relying on seller or agent representations. The court also found that the inspector didn’t owe Apgood a legally recognized duty under the circumstances. The paperwork ruled the day, and the court affirmed dismissal of all claims.

About a year later in Delaware, the Superior Court decided Willey v. Scott (Delaware Superior Court, April 2025), where buyers had sued over undisclosed defects and tried to include the home inspector in their claims. But the inspection contract had two key provisions: a one-year claim limit and a binding arbitration clause. The plaintiffs didn’t dispute the contract’s existence, and the court found no reason to override it. Allegations that Realtors® had steered the buyers to the inspector weren’t enough to keep the inspector in the suit; even if such behavior on the Realtor’s® part was suspect, plaintiffs’ relationship with the inspector was governed by the signed agreement, and so unless the inspector breached that agreement or committed some independent wrongdoing, there was no reason to override that contract.

Around the same time, a somewhat different decision came out of the New Jersey Appellate Division in Ruiz v. Bourke (March 2025), a case that highlights the limits of inspection reports and the challenges of proving liability without clear contractual or legal duties. In this instance, a second-floor railing collapsed and injured a painter. The homeowners had received a home inspection report before purchase that flagged the railing as a “safety concern” and recommended further evaluation, but they hadn’t acted on it. After the injury, the plaintiffs argued that the report put the owners “on notice” of the danger. The court disagreed. It excluded the plaintiff’s expert report as a “net opinion,” meaning it lacked a solid factual basis, and found no evidence the owners had actual or constructive notice of the defect. Summary judgment was upheld.

Three decisions, two of which take inspectors off the hook and one that says an inspection report doesn’t constitute notice of defects. What do these tell us? They offer further evidence that in most jurisdictions:

1. Courts are leaning heavily on the language of contracts to sort out responsibility.
2. If the buyer signs off on waivers and disclaims reliance, courts are likely to enforce those terms even if defects show up later. Inspectors should ensure their reports are clear and their contracts spell out the scope and limits of their duty.
3. Courts will enforce inspection contracts as written, especially when plaintiffs don’t challenge contract terms. Inspectors should make sure clients understand these provisions upfront.
4. Even when risks are flagged, courts won’t impose liability unless there’s a clear duty and persuasive evidence of knowledge or neglect. For inspectors, this reinforces the importance of clearly stating what is and isn’t covered; for property owners, it shows the risks (a close call on liability in the New Jersey case) of ignoring recommendations. 

Judicial Economy is Your Friend
For home inspectors, these decisions show that risk is mostly controlled by the written contract and what you put in your report. If your contract is clear and enforceable, it can remove or sharply limit a buyer’s or third party’s ability to sue you. If your report is vague or your expert opinions are conclusory, a court can exclude them and that also defeats claims. In short: contract first, clear reporting second.

Courts are busy, and judges don’t have much patience for parties who try to stretch a case beyond what the contract says. Courts are built to favor efficiency (called “judicial economy” in legalese) and that means they’re often looking for the cleanest, most straightforward path to resolution. When a contract clearly allocates risk, judges are inclined to stick to it. They don’t want to untangle what could have been clarified in writing. In fact, they can get a little cranky when litigants ask them to read between the lines or infer duties that weren’t spelled out.

A strong, proactive contract gives the court a roadmap. A well-drafted inspection agreement tells the judge exactly what was promised, what wasn’t, and where the inspector’s responsibility begins and ends.

This does not mean a contract gets you out of trouble if you’ve breached it, and there are always exceptional cases and decisions. But cases like Apgood, Wiley and Ruiz suggest that scope of responsibility matters, and parties who protect themselves when drafting and signing agreements, and understand their liability, are practicing good risk management. For home inspectors and others in the real estate world, this reinforces the value of clear, well-drafted contracts. They’re your first line of defense when a dispute lands in front of a judge who’s seen it all.

When inspectors include clear disclaimers, scope limitations, timeframes for filing claims, dispute resolution clauses like arbitration, and indemnification provisions, it tells courts that cases can be resolved quickly and cleanly. In a system that rewards clarity, and in a world where lawsuits can spiral, a well-constructed contract is premium content.

Judicial economy, in this sense, becomes the inspector’s greatest legal ally. But that’s only true if you do some work up front. If the written agreements are vague and inconsistent, or missing key terms, courts are more likely to let a case proceed, even if the inspector ultimately prevails. That means more time, more stress, and more expense. But when the contract is solid, courts have every incentive to enforce it and move on. The inspector who’s taken the time to define their role, limit their liability, and document the client’s acknowledgments is far more likely to be dismissed early, just like in Willey and Apgood. In both cases, the inspectors were let out of the lawsuit not because the facts were perfect, but because the contracts were. That’s the power of judicial economy working in your favor, just so long as you give the court something solid to work with. 

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Practical Goals
The recent decisions in Apgood v. Plautz, Ruiz v. Bourke, and Willey v. Scott offer a clear message to home inspectors: courts are increasingly focused on what’s written, signed, and documented. Judges are relying on contractual allocation of risk, and they’re not inclined to entertain claims that stretch beyond the scope of a well-drafted agreement.

Here’s what that looks like in practice:

1. Make the contract work for you: Use a clear engagement agreement that includes scope of work, limitation of liability, a one‑year claims period, and an arbitration clause. Require client signature and keep records proving they received and signed the contract before inspection.
   
   
2. Write careful, defensible reports: Describe observations, conditions, and limitations factually; avoid broad causation statements unless you can support them with data or testing. If you are in doubt, recommend a qualified specialist rather than asserting a definitive expert conclusion.
   
   
3. Avoid net opinions: If you or someone you rely on will later give expert testimony, ensure opinions are tied to facts, methods, and data, not just conclusions.
   
   
4. Document everything: Keep photos, checklists, client communications, and the signed contract. Timestamp files and preserve originals. Log scope changes, additional requests, and any on‑site constraints.
   
   
5. Train staff and agents: Make sure booking and sales staff never steer customers in a way that could be later characterized as coercion or conflict; document independence.
   
   
6. Get insurance and counsel: Maintain appropriate E&O coverage sized to exposure and aligned with contract limits. Include indemnification for legal costs, claims arising from third-party reliance, and disputes that fall outside the scope of your inspection agreement. 

OREP Will Help You
Isaac Peck is the Publisher of Working RE magazine and the Senior Broker and President of OREP.org, a leading provider of E&O insurance for savvy professionals in 50 states and DC. Over 14,000 professionals trust OREP for their E&O and liability insurance. Isaac received his master’s degree in accounting at San Diego State University. Reach Isaac at isaac@orep.org or (888) 347-5273. CA License #4116465.

In Willey, for example, the inspection company’s contract included a one-year claim limit and an arbitration clause, both of which the court enforced. OREP encourages inspectors to use similar provisions and helps them understand how to do so effectively. That’s why OREP provides its inspector insureds with attorney prepared, state-specific agreements that have the key contractual clauses they need, including limitations of liability, statute of limitations, attorney’s fees, and more. In Ruiz, the court excluded an inspection report as a “net opinion” and found no evidence the homeowners had actual or constructive notice of the defect despite a prior inspection flagging a safety concern. Through Working RE Home Inspector magazine, OREP’s guidance on report writing and documentation helps inspectors stay within their professional lane while still providing clients with actionable and defensible observations.

Protect yourself first with a strong, signed contract; protect your report second by being factual, cautious about opinions, and documenting everything. We’re here to help! 

About the Author
Isaac Peck is the Publisher of Working RE magazine and the Senior Broker and President of OREP.org, a leading provider of E&O insurance for savvy professionals in 50 states and DC. Over 14,000 professionals trust OREP for their E&O and liability insurance. Isaac received his master’s degree in accounting at San Diego State University. Reach Isaac at isaac@orep.org or (888) 347-5273. CA License #4116465.

Published by OREP Insurance Services, LLC. Calif. License #0K99465