KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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License holder liability issue / Monitoring contract / Concierge program
September 25, 2020
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License holder liability issue
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Ken
       I am using your Qualifier Agreement to license an alarm company; I am concerned about liability. I’ll be acting as qualifier for 5-6 companies within the next year and obviously I can’t manage all their activity. I would like to find a liability policy to cover this type activity. Do any exist and if so can you point me in the right direction?
Name withheld
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Response
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            Alarm license laws are different state to state and not all states have a license requirement.  A person is required to qualify and hold the license for the business entity.  This is not a transferable license and it does come with responsibility which is generally spelled out in the licensing law.  However, unless the license holder is performing the work or exercising direct supervision, there is likely no personal liability in tort or contract.  That means that the license holder is not generally liable for the activities of the entity, even though the entity is not permitted to engage in such activities without the license holder qualifying or the entity.
            Potential liability can come from entity business debts, employee liability, subscriber claims for losses because the alarm didn’t work, regulatory agency investigation and complaints [this is the one that the license holder may actually be responsible for].  Other than license activity issues where the license holder’s license could be revoked, suspended or the licensee fined, there should be no liability for a license holder.  Nevertheless, the Qualifier Agreement that we provide between license holder and company does require the company to name the license holder as additional insured.
            I don’t think you need any additional insurance other than the insurance the company is required to carry.  You will have the indemnity by the company for obligations, which admittedly is not the same as being covered by insurance.
            Incidentally, I seriously doubt that you will be able to qualify for all the entities you’re thinking [or dreaming] about.  You admit you won’t be able to perform your license duties for all these companies and the license board knows that as well as you.  Some states permit the license holder to qualify for only one entity, though most states don’t have a quantitative limitation.  The limits are set by the activities you are anticipated to be responsible for.  Thus, a company that does monitoring only and subcontracts that service to another company would have much less to supervise than a license holder who is required to personally inspect every installation or at least be responsible for every installation, inspection and service.
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Monitoring contract
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Ken
            We need a solid Monitoring agreement to put in place with our contracts. I would like for this to release us of any liability, hold harmless, acts of nature, etc..
            Can we schedule a time to discuss so we can get this in place?
 Thanks
 Mark 
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Response
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            Unless all you do is monitoring you need the All in One Agreements.  They come in different formats, sale or lease, and for different end users, residential or commercial.  There’s only one residential All in One; for commercial there is one All in One for security and one All in One for commercial fire.  Except for unusual business models you likely need the All in One and not just a monitoring contract.  Get the forms you need at www.alarmcontracts.com 
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Concierge program
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Ken
            I’m considering subscribing to your Concierge Program as we will have some quick questions here and there as well as wanting to occasionally review subscriber contract changes.  Right now we are looking at an acquisition transaction.  Would joining the Concierge Program now get us a 10% discount off fees for the transaction?  Also, how much do you think the legal fees will be for the transaction?  With very little back and forth in finalizing the deal, would you anticipate the total cost here being less than $3,500 if this mostly just involves finalization of deal docs?  I understand that there are unknowns, just trying to keep a handle on this as most of the heavy lifting with the negotiations is already complete.  I think this is a pretty uniquely simple deal.  Thanks again!
 Regards,
 Name withheld
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Response
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            First things first.  To just review your transaction documents I certainly hope it would be less than $3500.  Trouble is, the review may raise plenty of issues that require further negotiations, which you can do on your own if you want or use some local counsel who assisted with the first go around documents.  In fact, had you gotten me involved from the get-go the total fee may have been less than $3500 if the deal is as simple as you suggest.  The simple deals that require little work run $2000 to $3500, and that’s where we are drafting the APA, do a few revisions and then provide the Bill of Sale and other closing documents needed.  More complicated deals take more time and cost more in legal fees, sometimes lots more.
            The Concierge Program provides 10% off legal fees and contract purchases, everything other than collection contingency fees.  The concierge program benefits start as soon as you sign up; you have a 6 month commitment to the program.  See here for all the benefits.  I just want to highlight one, the monthly contract review credit of $250.  That’s a great benefit, especially if you use it monthly.  No reason to guess what changes can be made by subscribers when you have “house counsel” to review and, when needed, negotiate the changes. For more information contact our Concierge Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304 or SSpector@Kirschenbaumesq.com  Don’t you think it’s about time you engaged and teamed up with the number one recognized law firm in the alarm industry?  I do.
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To order up to date Standard Form Alarm /  Security / Fire and related Agreementsclick here:  www.alarmcontracts.com
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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.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com