Lots of case law out there on this stuff... again, a lot varies by area. Generally, any less than the fee is laughed at as being way too favorable to the inspector. What's the motivation for an inspector to try hard if the most he stands to lose is 1/2 his fee? This means just for showing up and wandering through a house you're guarenteed half of your fee.

The full fee LOL is the most common and makes the most sense. We're not in the business of offering insurance policies on houses. We couldn't make money for what we charge if we did. Therefore, we can't have more to lose than what we made in the first place.

To the earlier poster worried about giving back too many fees..... if you have more than a couple in a thousand asking for their fee back you're in the wrong biz.

I've asked the exact question hinted at here of every attorney i've met at educational conferenes.... does it make sense to up the LOL to 3X the fee or $1,000 so we have more at stake? All have said it really doesn't matter. The advice I've received has been to leave it at the fee of the inspection.

As eluded to by Scott, this is all assuming we're operating by the terms of the contract. Keeping in mind this country is basically ran by lawyers. We get to pay them 100's or 1,000's of dollars to write us a contract and then we have to pay 1,000's for them to tell us why it doesn't stand up.

Back to the regional stuff.... everywhere has different ways of handling disputes. There's a couple rules I was taught early on that are worth remembering:

When in a dispute, the early money is the best money. Meaning if you mess up, realize it and pay for it quickly. Often paying even when you're not really wrong. Sometimes it's worth just being done with.

Don't ignore people. Whenever a problem arises get back on-site asap. Take lots of pictures and try to not discuss fault or blame if possible. If you have a multi inspector company or a biz partner try to have someone other than the original inspector go back. It's just easier to be objective if you're not defending your work.

In the end the best way to stay out of trouble is to leave people with a feeling that you are competent and did your best. Of course the best way to convince people of those two things is to be competent and to really try your best. I've found that people are far less likely to come after you if they respect you and think you did your best.

Sorry for the long rant....