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Are there claims against DIY companies and how are insurance premiums figured
May 1, 2020
Are there claims against DIY companies and how are insurance premiums figured
            DIY security companies have been around for years. Statistically, there should have been losses. Are you and the insurance agents on this forum aware of any Liability and Errors & Omissions claims against DIY alarm companies where the system has been professionally monitored?   Any against alarm companies where the system is self-monitored (Customer elects on contract to not have signals forwarded to monitoring center but sent only to them via text & email)?  Have there been any settlements or judgments?
            If not (and for discussion purpose only) would you guess how might courts view such cases in comparison to professionally installed systems?
            How do insurance carriers assess and formulate premium for DIY companies? Typical Liability policy premium factors include, among others, cost paid to Subs/Monitoring Station; and Installation payroll. If these are $0.00 what factors are considered?
            Not all DIY companies are the same.   Some actually do professional installations as well as sell DIY systems.  Others have a nationwide model, sell DIY products, don’t install or help with installation and provide platforms for self or professional monitoring.
            Except for those alarm companies run by those with low double digit IQs [or high roller gamblers, or using other people’s money], the nationwide DIY companies are doing business with proper subscriber contracts.  These contracts are found at [and other law firms who have copied most of the form in violation of trademark and copyright law].  A customer who decides to use a DIY system, whether self or professionally monitored, is going to run into the same brick wall other alarm customers face when they have signed the Standard Form Agreements.  
            You can’t buy a 4 cylinder economy car and complain when it won’t do 0 to 60 in 2 seconds or outrun Smokey the Bear.  You also can’t install, yourself or with telephone help, an alarm system and expect the alarm company to be responsible.  
            Actually as I wrote that last line I did think of something humorous.  You also can’t have a really expensive alarm system professionally installed and expect the alarm company to be liable; it’s just not how the industry works.  So why pay more if the alarm company isn’t liable anyway?
            Do you know the answer yet?  It’s because alarm customers aren’t supposed to be installing alarm systems and paying for alarm services with the expectation that the alarm company will be liable if there is a loss that the alarm system was supposed to detect and guard against.  The alarm system is one layer of protection, like a dog, like more lighting, like neighborhood patrols, like locked doors, like lawn signs, like a sprinkler system, like sitting up all night on guard.  Different layers of protecting your life, your family and your property. Ultimately, from a monetary perspective, it’s the customer’s insurance that the customer has to rely on for reimbursement of any loss or damage.  The proper alarm contracts make that very clear, whether it’s a DIY system or professionally installed.
            I am not aware of any lawsuits involving a DIY system or self-monitored system, though I haven’t looked for one.  Anyone know any cases?  
            As far as insurance I was under the impression that premiums for the alarm industry were calculated based on overall gross or gross payroll.  Brokers can give better advice on this question.  The brokers would also know if DIY companies are rated or charged differently.  Let’s see who wants to chime in.

Reaching K&K during the lock down
     During this crisis the most efficient way to reach our attorneys is via email.  You can also call and if not picked up, leave a message and your call will be returned promptly.
    Here are a few departments to contact directly:
alarm / security / pers / fire department:  Ken - or call and leave a message with return number at 516 747 6700 x 301
health care professionals:  Jennifer Kirschenbaum,Esq 516 747 6700 x 302;
Alarm contracts:
  Eileen Wagda 516 747 6700 x 312​
Alarm licensing:  Alison Gallup,Esq 516 747 6700 x 317; or Eileen Wagda, Licensing Administrator, 516 747 6700 x 312
Employment issues:  Kieran Bastible 516 747 6700 x 315; or Jennifer Kirschenbaum,Esq
Concierge Alarm Clients have full access through our Concierge Program Coordinator, Stacy Spector, Esq  516 747 6700 x 304 or 
Collections:  [courts are shut down at this time, so don't expect much progress.  We will however continue to prepare papers on our end so that we will be ready when the courts normalize]  Kathleen Lampert  516 747 6700 x 319
Pending litigation:  Caroline Wallet,Esq  516 747 6700 x 305 and Maureen Biel,Esq 516 747 6700 x 303  MBeil@Kirschenbaumesq,com
Bankruptcy and debt collection issues:  Steve Sheinwald,Esq  516 747 6700 x 309 or Scott Dillon,Esq  516 747 6700 x 318

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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