Your Nov 15 message was right on target.
We do not sell PROTECTION.
We offer peace of mind through the installation of a properly installed, serviced and monitored security system. We never say you are protected. We never intimate that BAD THINGS WILL NEVER HAPPEN. We say when S*** Happens we will detect it and invite someone to help you with the problem.
Unless we are on site 24/7 with tremendous firepower we never protect.
I would like to mention three events and why contracts and their provisions are important. I will be speaking about one burglary and two fire situations.
The first event, in the mid 80's, we were called by a new customer to conduct a Fire Department Connection test (Sprinkler). The system had been installed about 1919 for an ammunition company in Queens. The customer that called us was a company that made bronze & fibreglass figureines. The initial inspection determined the system was not working, the water was off, we did the required repairs and conducted the required tests with the FD. Subequently we started monthly inspections of the system. About three years later the customer called and said he needed an additional spare sprinkler, I asked why and he said they had a fire the night before, one sprinkler fused and extinguished the fire. Two days later he called again and said he needed to spare sprinklers, I asked why, he had another night time fire, the sprinklers extinguished the fire. Turned out to be a disgruntled employee who tried to burn the place down. Six months later we received an envelope from an insurance company with a note to forward the enclosed envelope to our insurance company. Not being one who just listens and follows all directions I opened the envelope, a claim for $3500 for water damage caused by the sprinklers. I called and the claims people said there was no mention of a fire so they would close the file since the sprinklers worked. A few weeks later we received a summons, filed our answer with the court, and the day we appeared the case was dismissed. This could have turned out much differently and been an expensive claim to defend if the Judge wasn't reasonable and accept our answer as it was.
Issue two, a burglary? Mid 1980's, we installed an alarm for a residential customer, wired each and every window (foil & contacts), and three motion detectors. One motion detector covered the hall between the bedrooms and into the living room. I was called by the homeowner to say that their had been a burglary that evening while they were out at dinner. I took my pocket recorder and started recording when I got there. The rear bedroom had very frilly curtains that covered the foil connector and pull apart plug and wire to the window frame. The glass had multiple scratch marks from a glass cutter, verticle and horizontal, and a small hole only big enough to fit a childs hand. The insulation on the wires between the window frame and pull apart were melted and twisted together. My first thought, how could you do this with one hand, hold back the curtains so you don't set them on fire, burn off the insulation and then twist the wires together and not cut your arm? The owner said that the master bedroom, across the hall (passing by the motion detector) was where the expensive things were located. I asked if the motion detectors were on, he said no they were not turned on. The detective investigating the burglary called me and asked my opinion, and I told him, he agreed, an inside job, the insurance adjuster agreed as well. I don't remember whose contract we had used back then, but, no claim was made against us, lucky.
We installed a new fire pump in a high rise commercial building along with a new sprinkler alarm system three years ago. Last year on an upper floor someone was doing a photo shoot, a halogen lamp fell over and set fire to the temporary back drop. About four to six sprinklers fused and controlled the fire. The FD told me that everything worked as it should and the fire damage was limited to the temporary set. However, water went down through holes in the floors, stairs and elevator shafts. We were on site a few hours after the fire, replaced the fused sprinklers and restored the sprinklers and alarm to service. Servpro came in with a small army to limit damage and mold. When I called about getting paid a few weeks later I was informed that the insurance company was sending a $250,000 check to start covering losses, the expected total loss was estimated at over $1,000,000. This was a very small fire, limited to about 8' x 8' that was controlled at the onset. I believe that our Kirschenbaum contract was beneficial and kept us from being involved with the loss except as a payee.
We lose jobs to competitors because of our contracts, that is ok as long as we don't lose a law suit because of a loss.
Here is the original article from Nov 15:
Having trouble believing in your alarm contract?
Are you embarrassed by the terms in your alarm contract? Do you find it difficult to present the contract and then have to justify the terms to your subscribers? Do you believe provisions that exculpate you from liability or limit your liability to basically nothing are fair? That your subscriber should procure insurance for you or indemnify you? Think it's fair to ask a subscriber to sign waivers and a Disclaimer Notice acknowledging that there is better equipment, better systems and more security available? Well, if you're not comfortable, in fact adamant that your contract is immanently fair because it clearly defines your relationship with your subscriber, the one you intend, then you my friend need to get your act together. You need to become a believer. You need to understand that we live in a litigious society, one where someone, everyone, is looking to place blame and recover for a real or perceived loss. And what I think you also need to do is stop believing your own bull when you are making the sale. You know you can't prevent a loss. You know there's more you can do; more the subscriber can do. While the industry is busy focusing on false alarms and sloppy installations and monitoring procedures, imposing licenses, certifications, permits and registration fees, no one wants to admit to the subscriber or themselves what the alarm system is all about.
So what is it about? It's about detection; deterrence, but not prevention. Put in a yard sign and window decal and hope the would be burglar passes on to the next house or store. Keep your alarm system up to date so that when the building is cased the would be burglar decides to move along and try the next store. But the protection that is advertised and talked about at the sales presentation is most likely not in the subscriber's budget and the protection isn't going to be there. Of course there is value to the alarm system and of course the subscriber is better with an alarm system than without one. Intruder alarms not only detect but lead to arrests. Fire alarms protect lives. Alarm systems and alarm protection is a necessary way of life, but technology and subscriber budgets severely limit the alarm systems and protection. The sales pitch is all about convincing the subscriber how essential the alarm system is to life and well being. The alarm contract is all about the reality of the alarm system and services. That's why the alarm contract needs to be worded as it is, and you better believe it. I had Jesse Kirschenbaum [my nephew] address the issue. He's in our Alarm Division and here is his take.
Is it fair for alarm companies to have protective provisions in their contracts? My first thought was, why wouldn’t it be? In fact, it would be unfair to not allow alarm companies to allocate risk through such protective provisions. This is evidenced by the fact that courts in every state recognize and enforce limitation of liability provisions, as well as other protective provisions, in alarm contracts.
Allocation of risk is common in a lot of industries, not just the security industry. Without protective provisions in a contract many businesses would not be able to survive because they would be exposed to unwarranted liability and would be constantly defending themselves in court rather than attending to business. Alarm companies face even more exposure because of the nature of the work. Every loss would invite a lawsuit against the alarm company; the cost of defending these claims would be tremendous. Without properly worded protective provisions in contracts the alarm companies would be forced to trial on most cases. The cost of business would be too high and it would result in significant increases in the cost of alarm services. The courts have expressed this time and again which is why protective provisions in alarm contracts are consistently enforced.
Alarm companies are almost never the cause of a subscriber's loss. To advocate otherwise evinces a misunderstanding of the relationship between alarm company and subscriber. Alarms are designed to detect conditions, not protect against loss, and certainly not guarantee no loss. The difference in perception is the very reason protective provisions are necessary in alarm contracts.
Those who question the fairness of alarm contract protective provisions don’t understand that these provisions don’t insulate alarm companies from all liability. Most states will still find alarm companies liable for gross negligence and all states will impose liability for fraud. Gross negligence is defined differently in different states. Willful, wanton, reckless conduct, intentional conduct, conduct that evinces an indifference to injury to another, a great departure from reasonable conduct. These and more define gross negligence. So alarm companies will still be liable when such liability is actually warranted.
If you are using contracts that do not contain protective provisions that are properly drafted and enforceable it is time to upgrade. The purchase price of new contracts is well worth it when you consider the fact that you will have to spend thousands upon thousands of dollars defending yourself in court and for awards rendered against you when it could have all been prevented had you purchased the proper contracts from the get go. If you want to ensure that your company is protected and not exposed to a tremendous amount of unnecessary liability, do yourself a favor and visit alarmcontracts.com
If you would like to schedule a free live video/webinar presentation for your association meeting or event contact
Eileen Wagda at (516) 747-6700 x 312.