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
******************************
Comment on subscriber requiring you to indemnify / Picky subscriber has contract questions
April 9, 2021
************************
Comment on subscriber requiring you to indemnify from article on March 25, 2021
***********************
Ken,
You were again spot on in your answer to TL’s March 25th question regarding signing a “realty co’s” contract requiring the alarm company to indemnify the customer. In the last year we have run across three situations in which a Seller had signed these contracts. In each case the aggregate RMR was over $3,000. While it isn’t unreasonable for a property manager to expect an alarm company to indemnify it during the installation process, monitoring is a different story. During the install, a tech could drill through a pipe, break a window, drop something off of a ladder, etc., all minor issues that a customer paying thousands of dollars for an install should expect the alarm company to be responsible for. When the install is over and monitoring begins, it is a different story. The customer is now paying a small monthly charge, the alarm company is not even there, and the exposure is huge. I saw one agreement, for $65 per month of fire monitoring, in which the alarm company essentially became the insurer for a $17 million building. Not only does an alarm company want this kind of exposure, a buyer, who may actually have $17 million lying around, doesn’t want it either. The contract is going to be disqualified, and the Seller could find themselves out $100,000 or more in purchase price. This makes your concierge service a bargain.
The excuse that I hear from alarm companies is that if they don’t sign these agreements, another company will. All I can do is quote PT Barnum who said that there’s a sucker born every minute.
Mitch Reitman
Reitman Consulting Group
Fort Worth, TX
817-698-9999
http://www.reitman.us
********************
Picky subscriber has contract questions
********************
Ken
See questions our potential subscriber has with the Residential All in One. What do you think?
17. Care & Service
“Subscriber agrees not to tamper with, …..” etc etc.”
But I can still replace batteries as necessary, right? Both those in the smoke detectors and those in the main boxes?
23. Insurance
“Subscriber shall maintain a policy…under which……..Alarm Company is named as additional insured……”
Really? Why? The paragraph goes on to say that subscriber (thats me) is to “assume all potential risk……..” etc. Seems to me that by signing the Agreement, I’m taking you off the hook for any and all damage that might occur. Isn’t that enough protection for you?
Sorry to be picky about stuff like this, but missing something in the fine print is often the basis for a future problem, so I like to be clear on everything. If you can clear up those points, I will be ready to sign right away, and look forward to getting this going with you.
Name withheld
**********************
Response
**********************
Tamper with the system obviously doesn’t include changing batteries. In fact, the Residential All in One is clear that batteries are excluded from the Service Plan and the responsibility of the subscriber.
The second issue is a bit more complicated. The subscriber doesn’t want to name you as an additional insured, claiming that it’s unnecessary since he has assumed all risk under the contract. That’s partially correct. While the subscriber has essentially agreed that you have no liability under the contract, others who are damaged may have or think they have rights under the contract or because of your services to sue you if they suffer a loss; a guest on the house; a next door neighbor. These potential claimants are not party to the Residential All in One. Regardless of the merits of their lawsuit you will still have to defend the claim [hopefully you have E&O coverage who will step in and defend the claim – and remember that carrier in all likelihood wanted to know that you had a proper contract that you use regularly].
If you’re named as an additional insured you get two [at least] benefits:
1. The subscriber’s carrier will defend and indemnify you if there is a claim arising under the contract, and
2. If your subscriber suffers a loss and his carrier pays him that carrier will not be able to sue you because you are also an insured.
You can agree to this subscriber’s challenge. Here’s why:
1. The subscriber has agreed in another paragraph to indemnify you. If you do get sued the subscriber will be sorry he didn’t include you as an additional insured because not it’s going to be the subscriber who has to defend and indemnify you, not his carrier.
2. Your insurance will step in to defend and indemnify you, and then sue the subscriber to reimburse it’s cost of defense and any damages that may have been awarded against you that your carrier pays.
3. The subscriber’s carrier won’t be able to sue you anyway because it is bound by all of the provisions of the contract that it’s insured signed, as well as the waiver of subrogation.
*******************
Watch for announcement of our next webinar on April 20, 2021 featuring Jeff Zwirn at noon ET. Save the date and time.
*********************
To order up to date Standard 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
This area is reserved for alarm classifieds, alarm company announcements, solicitations, offers, etc.
There is no charge to post a listing here.Include your contact information, phone, email and web site. If you would like to submit a post, please send an email to ken@kirschenbaumesq.com. To create a reciprocal link to our website, click here.
************************************************
Getting on our Email List / Email Articles archived:
Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com
**************************
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
|
