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Monitoring Centers need to require dealers to carry E&O coverage
March 8, 2021
Monitoring Centers need to require dealers to carry E&O coverage
          Thank you for a great post on February 25, 2021 on the importance of having E&O insurance.  Every day our sales team is questioned why AG requires GL & E&O insurance.  Articles like these help dealers understand they are expected to have E&O insurance and it's not a shock to them when they call Wholesale Monitoring Centers and see this requirement in our agreements.  
          Now if you can help all the wholesale monitoring companies understand they need to require their dealers to have GL & E&O that would be amazing.  I am constantly amazed when dealers call us to move accounts over to AG and we discuss E&O insurance. 80% of them say their current monitoring center doesn't require them to have E&O insurance.  Our sales team spends a ton of time every day explaining to dealers why they need to have E&O insurance in addition to GL insurance.
Troy Iverson, VP Sales & Marketing
          Monitoring Centers who don’t require their dealers to carry E&O insurance are irresponsible.  Dealer who use these Monitoring Centers and don’t carry E&O coverage are stupid. 
          Is it too much to expect that when you do business with someone that you expect some level of concern for your interests?  Would you install an Internet based communication panel without asking the subscriber if they have or can get Internet?  A phone line?  Electricity? 
          You select a Monitoring Center for lots of reasons; you depend on them to help your business, help you perform your contract obligations.  Is it too much to expect that the Monitoring Center to give you some advice on how best to manage your relationship with the Monitoring Center? 
          Here’s a good example.  Your Monitoring Center doesn’t ask you for much of anything other than the information needed to monitoring an account and that you make your payments timely.  It doesn’t ask you what contract you use; it doesn’t ask you if you’re licensed; it doesn’t ask you what equipment you use; it doesn’t ask you if you carry E&O insurance.  In fact, how lucky can you get?  Your Monitoring Center even gives you a Monitoring Agreement you can get your subscriber to sign.  How about that for service?  Yes, I think you’re an idiot.  You won’t understand, but others will, so here’s why.
          One thing your Monitoring Center didn’t forget to do is get you to sign a Dealer Agreement.  What, you have no agreement with the Monitoring Center?  I don’t believe that – someone, anyone – tell us a Monitoring Center that doesn’t require a Dealer Agreement [maybe called Installer Agreement or something else].  Well in that Dealer Agreement you, the dealer, have agreed to indemnify the Monitoring Center, not only for your mistakes, but the Monitoring Center’s mistakes.  If you don’t have E&O insurance you may as well close up shop when the claim comes because the defense costs alone will eat you up. 
          Choosing a central station, excuse me, Monitoring Center, may be one of the second most important decision you have to make, right behind engaging the right attorney and joining the Concierge Program.  Monitoring Centers like to pitch you like a partner, a joint venture or its important customer, which you are.  It deals with many dealers and has experience with many issues and can be helpful to you.  It has licenses, contracts, insurance, lawyer contacts, printer contacts, vendor contacts, manufacturer contacts.  Why wouldn’t you want some advice?  Why would you expect your monitoring “partner” to stay silent when it should be speaking up to help you avoid a disaster?  And not carrying E&O coverage is a disaster waiting to happen for you.
          Choose a Monitoring Center that cares about you and your business; it should, you are its business and it need you to succeed and thrive.  You need a Monitoring Center who has the knowledge to help and willingness to help, not just when asked, but when it sees something that needs your attention.
          AvantGuard is constantly trying to help and educate their dealers.  That’s the kind of Monitoring Center you want to do business with.

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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