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Many exterminating and Home service contracts carry indemnification or “hold harmless” clauses that essentially state that one party will not sue the other in the event of a loss. Companies try to write indemnification clauses as broadly as possible in an attempt to protect themselves from liability, however, courts do not like broad hold harmless indemnity clauses which attempt to absolve a company from all liability.
They may raise the clause in court, but in small claim court, the judges like to hear all sides, and will want to hear your testimony and evidence regarding the damage. The contractor is expected to do work in a competent and industry standard manner. If they cause damage that is beyond the scope of the termite remediation, then they cannot have you sign a waiver and absolve all liability. Be ready to present the judge the details as to what happened, how and why the damage was caused and why their work was grossly negligent and why their termite remediation should not have caused the damage. Small Claims Court in California, and elsewhere, is set up so that small homeowners such as yourself have recourse against contractors, who perform shoddy work and cause damage beyond the contracted terms.
I hope this helps with your question.