10 Ways How to Avoid Termite Lawsuits

The sheer volume of termite damage cases over the past decade or so has been nothing short of staggering. Customers file claims of breach of contract, negligence or fraud against pest management companies for perceived wrongdoing that, warranted or not, can cost those defendants hundreds of thousands, or even millions, of dollars.

After working as an expert witness on more than 500 termite cases myself, I thought it might be helpful to share some tips for protecting your business from this type of lawsuit. I see the same issues crop up time and again as pest management companies struggle to prove themselves innocent in court.

Naturally, I am assuming you have the basics down: You have competent, well-trained inspectors and service technicians; those technicians perform label- and rule-compliant termite treatments; and you provide each customer with a service agreement that specifies when a retreatment is required for its terms to remain in force. The day of having lifetime service agreements without a deadline for retreatment on liquid termite treatments is long past!

These 10 guidelines address the most common issues that come up in claims and in court and offer recommendations for avoiding them.

1. SET CLEAR EXPECTATIONS.

Too often, customers have the misguided notion that once you treat their home for termites, it will remain termite-free forever. That’s not realistic, whether you’re dealing with subterranean, drywood or any other type of termite.

You can do the job 100% correctly — follow the label, follow the law, reinspect diligently and still have a recurrence, as well as damage to the home. You should be very clear in both conversations with customers and your service agreement that a more realistic scenario is that you cannot promise that the termites will never come back, but you can commit to taking specified action if they do come back.

More broadly, your contract language should include an explanation of exactly what you intend to do treatment-wise and inspection-wise so the customer has a clear understanding of what they should and should not expect.

For example, explain that you are going to perform a label- and rule-compliant termite treatment, plus inspections and reinspections lengthy enough to ensure you are doing your best to uncover any reinfestations. That said, you cannot promise you will find every new infestation; you may not see termite activity in a particular spot for an array of reasons beyond your control, such as faulty, non-compliant construction that obstructs your view of certain entry points. Then, spell out the steps you will take in the event you do locate a reinfestation.

Also, make sure that your service agreements (perhaps in an addendum) explain termite behavior and the fact that they can come back into the customer’s home. Explain that this is why you recommend they keep the service, get the annual reinspections and maintain insurance coverage on their home.

2. WRITE LEGIBLY AND INCLUDE ALL INFORMATION.

If no one can read the paperwork, you will have great difficulty proving what you did and/or who did it. The technician or supervisor recording details of the service call needs to write legibly and include the date, services performed, products used, precautions and any instructions or additional notes for the customer. I can’t tell you how many times in court cases I have seen documents signed by Joe, Jim or JJ.  By the time a claim is filed, that technician could be long gone from the company, and no one remembers their last name.

3. ESTABLISH A TIMELINE FOR REINSPECTIONS.

In most states, reinspections are not required to include a record of time spent at the customer’s home, but having a record showing that sufficient time was spent on the reinspection can work to your advantage when a lawsuit is in play.

Take the time to develop an estimated timeline based on square footage — a home of this size requires this much time; a home of that size requires that much time. That alone will show that management has taken the time to develop a suggested flexible time schedule.

Of course, these estimates will vary from market to market, based on how structures are built. If you’re inspecting and treating homes in New Orleans, a city with a lot of very old structures with crawlspaces, inspections take a lot more time than in a new development in, say, Dallas that’s built on monolithic slabs, with open spaces and fewer walls than older structures.

Years ago, several of us at Fischer Environmental Services, Mandeville, La., went out and conducted inspections at three different types of homes: crawl, slab and mixed. We would time each inspection and, after a few weeks of collecting data, calculated reasonable averages for each type of home.

There will be other variables from one account to the next — perhaps some areas of a particular home are inaccessible, for example — but having a standard estimated timeline in place, and holding your team accountable to comply with that timeline, shows a jury that your company cares enough to put a strategic plan of action into place. It demonstrates your commitment to delivering high-quality services. If you don’t have some type of chart saying this is approximately how long the inspection should take, the judge or jury may infer that you care so little that you didn’t even take the time to try to figure it out.

4. MONITOR GPS RECORDS.

If you have a GPS time system that tracks your trucks and records the time they spend at each account, check those records — at least one out of every 10 stops — against the times recorded by your technicians. It is embarrassing to have the plaintiff’s attorney do this in court and find out the written times were exaggerated.

Don’t let this nightmare scenario happen to you: The plaintiff attorney says they looked at all the records, and the technician never went inside the house or got a signature, or he wasn’t in that 3,000-square-foot home longer than 11 minutes. Worse, he wrote that he was there for 25 minutes! He has just admitted he falsified company records. Right away, the jury isn’t thinking kindly of you.

5. MAKE CERTAIN THE GRAPH IS LEGIBLE, ACCURATE, COMPLETE.

The graph — the diagram or drawing of the property being inspected — is an essential tool for the reinspector. Any notes written on it need to be legible. Too often, I see graphs where you can’t make out the words. Those words may hold important information related to a water leak, missing shingles, water rot or another serious condition that should be brought to the attention of the reinspector and the court.

The graph also needs to state that what is marked is the visible damage and that, typically, what is visible is only a portion of the actual damage. The inspector should, therefore, mark areas of possible hidden damage with “PHD.” Plaintiff attorneys will have holes cut in walls near where you noted visible damage to show a jury “the rest of the damage caused by the termite activity this pest control company didn’t control.”

Finally, the graph needs to clearly distinguish between termite damage and termite activity. Good inspectors know that just because you’ve found damage doesn’t mean you’ve found activity. Some companies use an “X” to note termite damage and then draw a circle around that “X” to note damage and activity. It’s very important to differentiate the two so that when a technician is looking at the graph to know where to treat, they know where the live termites are and whether they’re associated with visible physical damage.

6. MARK DAMAGE WITH SPRAY PAINT.

On crawl foundations, have your inspectors spray paint the areas where they saw damage so no one can say you missed it. This is to protect you in case there’s a question down the road about the work you did.

Here’s an example of how that might play out: Four years from now, after a home has changed hands, the new owner hires another company to inspect the crawlspace. If that inspector sees termite damage that isn’t marked with paint, the homeowner may think you didn’t address the issue when you absolutely did.

When they call to challenge you, you can offer to reinspect it, but be sure to explain that when you do an inspection, you spray a little blue paint where the damage is so you can tell what is old versus new damage. If the same blue paint is there and there’s no additional damage anywhere, it’s hard for anyone to say you haven’t done your job. You killed the termites and they didn’t do more damage. This can help you establish credibility with the customer, as well as the court and attorneys.

7. EXERCISE YOUR RIGHT TO REFUSE CONTRACT RENEWAL.

If you identify conducive conditions in a home, tell the homeowner about them in writing. Explain on the reinspection ticket what you see and spell out the repairs or corrections they must make if they want to renew their contract. Give them the option of calling your office as well, so they can discuss the circumstances with someone on your management team to ensure they fully understand.

If they don’t comply by the time you go there to reinspect, you need not renew their contract. With their home in that condition, sooner or later they are going to have an issue with water rot or termite damage, and they may try to blame it on you. You need to be able to prove you noted the damage, told them about it and dropped their account when they didn’t correct it. It’s better to lose a couple hundred dollars a year from the termite renewal than it is to lose thousands of dollars, as well as many, many hours, on a legal case. (Note: Do not cancel the account. Just refuse to renew it. Give the property owner the reason, in writing, for the nonrenewal — for example, “Noted conducive conditions of soil above grade not corrected, and so your coverage, which will expire on [date], will not be renewed.”)

8. BE JUDICIOUS WITH REPAIR CONTRACTS.

Similarly, you are not required to put a repair contract on every property you treat. You may look at a well-maintained house and decide to give that customer a repair contract. Conducive conditions are not an issue, so you decide you’re willing to pay for the damage and repair the home should termites get back in. With a run-down house, you might make a different choice.

Your technician noted a variety of conducive conditions at the time of treatment, and you know you’d be setting yourself up for substantial losses down the road. For this account, you can commit to retreating as needed to prevent further infestations or eradicate current infestations but not pay for any damage caused by covered wood-destroying organisms.

Claims are being filed in such vast numbers that it has become obvious it’s not a good idea to guarantee homes that are essentially one huge conducive condition. Be choosy. If a customer ultimately corrects the problematic conditions, then you can consider converting their non-repair agreement to a repair agreement.

9. HIGHTAIL IT TO SWARMS.

When a customer calls in to say they have a termite swarm, make sure a member of your team goes out to visit their property as soon as possible. While we all know that a few swarmers don’t necessarily indicate a termite infestation, you can’t know for sure until you check the situation out. If you miss finding an infestation, people can acknowledge that termites are elusive, but if you didn’t even go when the customer alerted you, then a jury may get the idea that your company doesn’t care.

10. BE STRATEGIC IN PRICING.

Make sure the risk you’re taking by providing termite control services is worth the money you’re charging. The rate should be commensurate with the risk. Build in sufficient funding to cover the costs associated with your inspectors spending the appropriate amount of time doing thorough inspections/reinspections. 

That’s not just to ensure you’re doing great work but also to stave off attacks by opposing attorneys who may tell their clients to call your company and ask for a reinspection and then film the inspection without the inspector’s knowledge. When they show that film in court, they will compare your inspector’s recorded time with the actual time he spent is on the up and up. They may also call on an expert witness to critique the inspection. You do not want them to point out that your inspector just walked past a termite tube in the dining room because he was rushing through.

Charge what you need to charge to enable your inspectors to spend as much time as you think would be necessary while still making your profit margin. Cheap renewals are not a good thing. Attorneys will turn that around and make it seem as if you looked to cheat the customer.

In summary, protecting your business from termite lawsuits comes down to proper planning and training, meticulous recordkeeping, honesty, integrity and great customer service. With all that on your side, I won’t expect to see you in court anytime soon!

The author is president of Fischer Environmental Consulting.