ISC group and private meetings / Additional insured and Bart practicing law again March 10, 2023

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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ISC group and private meetings / Additional insured and Bart practicing law again
March 10, 2023

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Schedule for Group Discussion Meetings at ISC [subject to dealer interest] Meetings are limited to 6 dealers. Contact Stacy Spector,Esq at 1 516 747 6700 x 304 or SSpector@Kirschenbaumesq.com to reserve a spot. Private meetings with Ken Kirschenbaum are still available – contact Stacy for appointment. All meetings presently scheduled at Palazzo Prestige Lounge.
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_{Group Meeting Schedule:
Tuesday, March 28 at 2:00pm-2:45pm: Employee Retention Credit Group Meeting with Mitch Reitman
Tuesday, March 28 at 3:00pm-3:45pm: Central Station Group Meeting with David Smith, COPS

Wednesday, March 29 at 10:00am-11:00am: Finance Group Discussion with Jim Wooster, Alarm Financial Services
Wednesday, March 29 at 3:30pm-4:00pm: AIN Buying Group with Stan Matysiak

Thursday, March 30 at 9:30 - 10:30am at ESA meeting room: Bassano Suite 2705 by convention floor: Liability, insurance, horror stories, claims and other issues from perspective of Claims Administrator [Bart] and Alarm Defense Attorney [Ken]. Ken Kirschenbaum and Bart Didden. This promises to be entertaining and informative. You don't want to miss this.}

_{Thursday, March 30 at 11:00am-11:45: Alarm Brokers Group meeting with}Rory Russell, Acquisition & Funding Services

_{Thursday, March 30 at 1:00pm-1:45pm: Contracts Group Meeting with Ken Kirschenbaum
Thursday, March 30 at 2:00pm-2:45pm: Insurance E&O Group Meeting with Shawn Iverson, The Insurance Center
Thursday, March 30 at 3:00pm-3:45pm: Sale or Purchase of Business Group Meeting with Ken Kirschenbaum}
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Private Meeting Schedule:
Tuesday, March 28 at 11:00am-11:30am- Booked
Tuesday, March 28 at 11:30am-12:00pm- Open
Tuesday, March 28 at 1:00pm-1:30pm- Open
Tuesday, March 28 at 1:30pm-2:00pm- Open

Wednesday, March 29 at 11:00am-11:30am- Booked
Wednesday, March 29 at 11:30am- 12:00pm- Open
Wednesday, March 29 at 12:00pm-12:30pm- Booked
Wednesday, March 29 at 1:00pm-1:30pm- Booked
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Additional insured and Bart practicing law again
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Ken,
Periodically prospective subscribers ask why they need to name us as additionally insured on their policy; most times they accept once I explain that it is a term in the standard agreement as our attorney wrote it.
          I see that not being a viable answer for an agreement we are working on today, and without saying something wrong and you blasting me for it, I am asking for a good answer.
  Thank you!
Jeff

The law according to Bart

Ken,
          Now this won’t surprise you, I agree in part with your answer but I tell the customer something completely different.
          First where I agree, the insurance procurement provision (which you and I created back in the early nineties and first appeared in my contracts) is the first and almost only item that I will agree to be stricken from the contract. After that my next move is to raise the limitation of liability to nothing more than my insurance deductible because IF my company is found to be liable, I will be out my deductible anyway and the customer feels that they got something from me.
          Now to where I tell the customer something different.
          I have found that nobody likes their insurance company. So I plainly say that the provision precludes your insurance carrier from starting a subrogation action which many times is frivolous in an attempt to cut their loss. Then I say you bought the insurance because it’s the right thing to do and it’s there to protect you and now me at no additional fee to you.
          But let’s say the customer is a Philadelphia Lawyer and wants to talk about striking all the good provisions. I then explain why our service is so cheap in the first place. It is because it is for a service where we accept no risk for their loss or losses. And as examples, I ask what do they pay for their insurance? You will see that the alarm monitoring fee is less than their designer coffee bill each month and we need to divide those dollars between the central station company, the cellular carrier, the government and finally what is left over for the office staff and service crew that is always ready to come and fix their system when something goes wrong and sooner or later something goes wrong.
          So my rule is not to mislead or fumble around the issue, but I also wouldn’t trust the average salesperson to deliver these messages. This is where ownership or advanced seasoned management steps in and I know you don’t like this part, but as a service to my alarm dealers, I do offer to speak with the new customer to explain these concepts. The end result, 99.9% closure rate on the contract staying intact.
Bart A. Didden, President
U.S.A. Central Station Alarm Corp.
Port Chester, NY
Milford, CT
St. Paul, MN
Pasco,WA
877-872-1266

Response

          Well, I hardly know where to start.  The additional insured provision is one of the most challenged provisions in the alarm contracts and also one of the first I agree to strike.  Bart has some good points, though not really good enough to not be prosecuted for practicing law without a license [or impersonating a lawyer], but who am I to question a 99.9 percent closure rate?
          I’ve mentioned in prior articles that the additional insured provision [technically called an Insurance Procurement Clause] really benefits the subscriber.  Unfortunately, pointing this out will likely cause more contract challenges.  The subscriber is agreeing to indemnify the alarm dealer and the indemnity provisions is not always challenged when the insurance procurement clause is challenged.  So if you agree to strike the insurance procurement clause and someone makes a claim against you [and that someone can be the subscriber or a third party] you will call upon the subscriber to indemnify you.  Not just you, but the central station too if it is sued with or without you.  Now the subscriber will be required to indemnify you and won’t have the insurance coverage to back-up that indemnity obligation.  [insurance brokers may want to explain if the typical residential or commercial alarm customer carries insurance that would cover their “contractual” obligation to indemnify another, but I highly doubt it].  So, from this prospective the insurance procurement provision benefits and protects the subscriber.
          Bart is correct that if you are named as an additional insured that status will prevent the insurance company from exercising subrogation rights against you.  Legally, an insurance company can’t look to its insured for reimbursement for the insured event.  But the waiver of subrogation provision in the contract accomplishes this and far more directly.  Most subscribers don’t mind waiving the subrogation provision, though those that ask their broker or carrier will be advised not to do it.  It’s probably a good idea for subscribers to send their insurance company a copy of the alarm contract when they are getting insurance and the carrier asks if they have an alarm system, maybe for a discount in premium or maybe as a condition of underwriting the policy.
          One of the advantages of using the Standard Form Agreements is that they are truly the gold standard in the industry and used by more companies than any other form agreement.  Letting the customer know that your contract is just like everyone else’s contract is a potent argument, one I routinely use when I am negotiating alarm contracts with alarm customers [something I am, by the way, permitted to do by virtue of my license to practice law].
          One final thought on Bart contributing to the insurance procurement clause in my standard contracts.  I just don’t recall, but there is this guy a bit older than me that’s in the news daily making up some baloney about where, what and how he did.  Bart’s a little younger so maybe he’s right.  You can get to grill him on it – Bart will be leading our group discussion on Insurance and Insurance claims [he is great at that].  Call Stacy and reserve a spot in Las Vegas.
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STANDARD FORM AGREEMENTS: To order up to date Standard Form Alarm / Security / Fire and related Agreements click 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