QUESTION:
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Hello Mr.. Kirschenbaum,
I have purchase and been using your Alarm Service Contract. I also follow all of the newsletters and emails that you send out and wanted to say thanks. They have been highly informative and helpful.
I do have a question that you may have already covered, if so, I apologize for missing it. I purchased my company about four years ago. Prior to that, the company had been in business for about twenty years. The previous owners had kid of run it like a mom and pop shop but they did have about 250 active alarm contracts. One thing that they had always done as a regular practice is try to perform yearly inspections, even on residential systems. They had a procedure to call their customers and sell this inspection service every year or, if the customers were on an upgraded plan where that inspection service was included, they would call and remind them.
This brings me to my question. Does it increase our liability to regularly notify customers when we think their systems should be inspected? Is it ok to call or send notifications that inspections are due?
Paragraph 13 of the contract states that it is the subscribers sole responsibility to test that system and notify us if the system is in need of repair.
I am about to send all new, updated contracts and offer new optional service plans to all of my customers and I want to make sure that I get this right. I have also had complaints from several customers that I do not call and remind them when service/inspection is due so I am deciding how to deal with that. I don't mind putting a program in place to do that but I don't want to open myself up to additional liability.
Thank you very much for everything.
Peter R
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ANSWER:
There is nothing wrong with offering "inspection services" to your subscribers, and it does not increase your liability as long as you perform the service. Most alarm companies do not provide inspection services except for commercial fire alarm systems, which generally require inspection by law. There are jurisdictions, I just heard of one but forgot where, that do require inspection service even for residential intrusion systems.
The Fire Alarm Inspection and Service contract offered at www.alarmcontracts.com is for commercial fire alarm systems, not residential. I offer no inspection service contract in connection with residential alarms or commercial alarms other than fire. The reason for this is that inspection service is not common practice for those alarms.
Most alarm companies provide "service on request", which means they provide service when called by the subscriber. That procedure is in my Standard Service Contract at www.alarmcontracts.com.
You ask if providing inspection increases your liability potential. In one sense it does. The more services you provide the more likely you are to make a mistake or forget to perform the service. On the other hand, if you do perform the inspection services you may generate more revenue for your company and you may increase the performance level of your subscribers' alarm systems.
One thing is for sure, if you obligate your selfself to performing inspection services you better perform that service, and properly. Your obligation to perform inspection service will arise by contract and can also arise by your customary practice which the subscriber has come to rely upon.