Additional insured question and confusion / Personal guarantee / register today for webinars -see below September 4, 2020
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KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and white list ken@kirschenbaumesq.com ****************************** Additional insured question and confusion / Personal guarantee / register today for webinars -see below September 4, 2020 ********************** Additional insured question and confusion ************************ Ken, We have been asked by an electrical firm we designed a fire alarm for in a building where they installed it to name them as an additional insured. We will be doing the monitoring of that system soon but, this electrical firm wanted us to name them as an additional insured. I refused at first and then called my insurance agent that said it was no problem it only covered anything our company did wrong while on the job if they (the electrical firm) got sued due to something we did wrong. I gave them the additional insured certificate but said it’s only while this job is going on. They said no and it was to remain in effect for three years after work completion. I said no as it conflicts with the Fire All in One alarm agreement we have with the property owner. Who is right in this? Anonymous ********************** Response *********************** Sounds like you were engaged as a subcontractor of the Electrical Contractor to design the fire alarm. The Electrical Contractor installed the fire alarm [my guess is that you programmed it]. You have a Fire All in One with the owner to provide monitoring [probably repair and inspection too]. When first engaged by the Electrical Contractor you were asked to name the Electrical Contractor as an additional insured on your insurance policy. Your broker said it was OK. There are unanswered questions. Is the additional insured limited to your acts? Or is it primary and now the Electrical Contractors first layer of insurance on the job? Did you also agree to indemnify the Electrical Contractor? My guess is that you did. It would be a wise move to back that indemnity up with insurance, your insurance. This is quite common scenario. You are brought in for the installation by another contractor, or owner, and required to indemnify and obtain insurance for them. It’s not something I encourage, try to avoid it, but as long as it’s limited to the installation it’s tolerable. So in your case, it’s tolerable. But, if this Electrical Contract, or owner, insisted on indemnity and additional insured status for your after installation services [monitoring, repairs, inspection] then it’s definitely not acceptable. Never? Well it’s a great increase in risk; enough risk that I’d encourage you to either notify your existing carrier of the contract or get separate insurance to cover the contract. In either case you should be passing the additional insurance expense on to the subscriber. The Fire All in One requires the owner to indemnify you; for the owner to obtain insurance and name you as an additional insured. That’s the way it’s done in the alarm industry – custom-practice and overwhelming contractual relationship. Exceptions? Plenty, but that doesn’t mean we should encourage it. ****************** Personal guarantee ******************* Ken, On your Commercial All in One agreement, how important is the “personally guarantee” signature section for larger commercial businesses? Edgar P ********************* Response ******************** It’s not required on any contract. We make provision for it just in case you can get it. The personal guarantee comes in handy when the subscriber defaults and collecting from the subscriber is difficult or impossible. Sometimes the guarantor has separate assets and or credit or reputation to protect. So the personal guarantee is not essential. But, like an EZ Pass, you’ll be glad you have it when you need it. ********************* WEBINAR SCHEDULE AND REGISTRATION ********************* Webinar Series: Financing for the alarm industry When: September 15, 2020 12 PM ET half hour presentation and then Q&A Topic Details: How to Use Lending to Grow Your Business - A general overview of how an alarm dealer can use lending to grow, such as making a acquisitions, buying out a partner, fueling organic growth, consolidating debt, etc. Presented by: Jim Wooster and Jim Wooster Jr. Alarm Financial Services, Inc 866-204-9350 ext 1200 www.alarmfunding.com Hosted by: Ken Kirschenbaum Who should attend: company owners and CFOs Register: https://attendee.gotowebinar.com/register/5986254083373814030 This webinar will be recorded and available at https://www.kirschenbaumesq.com/page/alarm-webinars ****************** Webinar Series: Financing for the alarm industry When: September 17, 2020 12 PM ET half hour presentation and then Q&A Topic Details: How to Finance an Acquisition - A more specific drill-down on this method of growing by purchasing the accounts of another alarm company Presented by: Jim Wooster and Jim Wooster Jr. Alarm Financial Services, Inc 866-204-9350 ext 1200 www.alarmfunding.com Hosted by: Ken Kirschenbaum Who should attend: company owners and CFOs Register: https://attendee.gotowebinar.com/register/4228983813536754190 This webinar will be recorded and available at https://www.kirschenbaumesq.com/page/alarm-webinars ********************** Webinar Series: Financing for the alarm industry When: September 22, 2020 12 PM ET half hour presentation and then Q&A Topic Details: How to Finance Organic Growth - A more specific drill-down on the many ways loan financing can help an alarm dealer grown organically through covering creation costs, enabling leasing, expansion, etc. Presented by: Jim Wooster and Jim Wooster Jr. Alarm Financial Services, Inc 866-204-9350 ext 1200 www.alarmfunding.com Hosted by: Ken Kirschenbaum Who should attend: company owners and CFOs Register:https://attendee.gotowebinar.com/register/3255545487536556558 This webinar will be recorded and available at https://www.kirschenbaumesq.com/page/alarm-webinars ********************* To order up to dateStandard Form Alarm / Security / Fire and related Agreements, click here: www.alarmcontracts.com ************************* CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** NOTICE: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles *********************** THE ALARM EXCHANGE
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