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HOW MUCH GENERAL LIABILITY INSURANCE IS ENOUGH
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Ken
    How much general liability insurance is enough.  Not all my customers are under contract.  I carry 3 million now; certain companies are asking for 5 million, which costs another $1,300.00..my customer base is 2,600.
    I have customers who if total loss occurred or death would be in access of 3 million, maybe 400 or so...
This may be a good forum topic..
Thanks
Fletch
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RESPONSE
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    There is never enough because any one claim can exceed any policy you have and wipe you out.  You obviously have not yet learned a very painful lesson, or perhaps you don't mind spending a lifetime building up a company only to have to run and hide under a rock if one of your subscribers suffers a loss that is attributable to a failing alarm.  
    The typical alarm E&O policy is for 1 million single occurrence and 1 million aggregate.  So it's 1 million for the entire year.  Most policies do not deduct defense costs from that 1 million.  When you use the Standard Form Agreements your insurance will (hopefully) end up being defense cost coverage.  The carrier doesn't expect to pay out on claims (unless they are idiots - and too many of them are).  But when you don't have a contract your carrier is going to have to pay, unless you haven't done anything wrong, but even then the defense costs are going to be significant, much more than if you had a Standard Form Contract signed.  
    If you do fire alarms I think you should have at least 5 million in coverage. Burglar alarms and cameras, at least 1 million, more if you can afford it or if your jobs are larger, in which case you should be able to afford it.  
    If you routinely do jobs without contracts I don't think you need any insurance.  I think you should sell your company immediately and find another way to risk all your assets.  Try commodity trading.
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COMMENT ON LETTING DECEASED SUB OFF HOOK
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Ken
    I can't tell you how pleased I was to read the letter from Craig Llewellyn about the deceased subscriber and continuation with the estate on a month to month.  This man is a real mensche.  His only question is not about "how do I collect everything due", but " How can I make the transition easier for the estate./...." (Minimize paperwork etc..)
    It is refreshing to know there are still companies out there that  appreciate the customer when they were here and make a gracious exit when the time comes.  My guess is that when the estate is closed and the house is sold, he will get the new owners on the say so of the old owner alone based on his ethics and compassion.
Joel Kent
FBN
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BUT COMPARE TO THIS QUESTION - AND YES IT'S REAL - IMPOSSIBILITY OF PERFORMANCE
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Ken
    As always we all appreciate your daily emails and on going advise.
    I have a some what odd situation.  A customers house burned, totally.  And they did not have Hone owner insurance!
    Customer is disputing the validity of the contract since the house is no longer there, and I off course maintain the notion that there is a balance to be paid (just like s mortgage).
    Customer did not send a written cancellation request yet so I am still paying the Central Station for the monitoring.
If I canceled the monitoring since the house burned down and the alarm does not exist any longer, am I in breach of contract?
    Can the customer claim that since I canceled the monitoring then they don't have to pay either??
If I am using "the house is burnt" logic to canceled monitoring does it give the customer the legal right to use the same logic?
Thanks as always,
Anonymous
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RESPONSE
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    If you are using a Standard Form Agreement [in this case it would be the Residential All in One, which does cover fire) you are technically correct that the contract is not terminated just because the house burned down.  When there is "impossibility of performance" contracts are usually deemed canceled, but that concept applies when the event could not have been contemplated by the contracting parties when the contract was drafted.  Obviously a contract for fire alarm detection could have and should have envisioned the possibility that the building would burn down.  Since that event was not addressed in the contract your argument is that the fire, resulting in impossibility of performance on your end, does not cancel the contract.  The subscriber has to keep paying.
    If your leased car is damaged you have to keep making the payments.  If you have the insurance you're suppose to carry you'll be covered.  But if you lose your license to drive you still have to make the payments, and there isn't any insurance for that, that I know of.  Try inserting provision in your car lease that contract is over if you lose your license.  
    So getting back to the matter at hand, I can guess that Joel Kent is already appalled by the question.  Maybe you should consider letting the subscriber out of the contract; negotiate something little more understanding than 80% of the remaining balance of payments.  
    Your deal with the central station by the way is probably not your subscriber's business.  You know that no signals are possible so you may as well cancel the monitoring service with central.  If you really want to try and hold the subscriber to the remaining payments you could agree to suspend the contract term until the structure is rebuilt, or negotiate a final bill and cancel the contract.  
    Being right on the law doesn't always mean that's the best course of action to pursue.
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