more comment on test signals failing to communicate February 2, 2026

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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more comment on test signals failing to communicate
February 2, 2026

more comment on test signals failing to communicate from article on January 27, 2026

Ken,
   I am responding to this article from two different positions.
   First, as the Executive Claims Manager for the only industry owned insurance company, Security America, which was presented with a claim resulting from a PERS loss of life claim a number of years ago. If you remember, I contracted with you for an opinion which was ultimately rejected by the reinsurers at the end of the day. You wanted to fight on the contract limitation of liability sections but there were extenuating issues that could not be overlooked.
   Note - This claim was never filed with any Court, or ever adjudicated, just settled prior to any discovery.
   Facts, an elderly gentleman awakened early one morning as usual and went to the kitchen to make coffee and start his day. He was still gainfully employed and also actively managed the family trusts and other investments. He was found on the floor of the kitchen hours later by his wife and emergency services were unable to save him. He was wearing his pendent that had a feature to detect a fall. After a review of the central station records, the PERS system was communicating a low battery indication for the pendent regularly for many months before the date of loss, and all of these signals were accessible through the dealer access portal.
   It was also the considered opinion of the defense team (carrier, attorney, and me) that this is not a case that the industry would want to litigate because the optics weighed so heavily against the alarm company and industry. The initial claim was considerable, and we negotiated a settlement for about 30% of the demand and within policy limits.
   At issue was the arrangement between the central station and the alarm company. It was undisputed by the alarm company that it was its responsibility to review messages sent by the central station and correct any operational issues sent from the system.
Now, as a central station service provider for 44 years, the failure of the alarm company is all to frequent in our industry and not unique to a PERS company vs an alarm company.
   You rightfully have written in the past that it's the alarm company's responsibility to understand its duties in the relationship of the central station provider / alarm company / end-user in this business relationship besides what is contained in the contracts. All too often and for far too long alarm companies have ignored or avoided its responsibility as the ultimate provider to the end-user. This is further compounded by the reality of "you get what you pay for" and that alarm dealers are unwilling to accept price increases from its central station service providers and hence we as an industry have had no choice but to automate and shift tasks to alarm dealers who have had no issues raising the prices to end-users.
   In this case the alarm company got what they paid for plus a bonus, a non-renewal including a loss run history that the next carrier used to jack up the rates for coverage.
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

   As usual, an interesting perspective from a central station and insurance claims rep administrator.
   You point out that my opinion to defend was rejected by the carrier. We won't know if I was right or not because the carrier caved even before a lawsuit was commenced. We do know what happened with the claim. The alarm company insured was no doubt happy about the early resolution until it found out the policy was dropped, the loss run negatively impacted and future coverage and rates were affected. The carrier saved 70% of the policy, but you don't tell us the coverage, do we don't know if Security America saved 30% of one million or 30% of five million. Whichever, it's not $250 or 6 months the monthly charge for the service; it's for a lot more. I'd be surprised if the details of the settlement, or at least the outcome, didn't end up on the law firm's website encouraging other lawyers and others to bring similar suits.
   I would not have settled before testing the enforcement of the contract in a motion early in the case. Since no law suit was filed we'll never know an alternative outcome.
   Another issue arises, and it's the dealer's indemnity of the central station, who in the above case is the one who committed the error. Nevertheless it's the dealer who suffers because of the indemnity provision. It's the dealer's carrier who ran the defense and decided to settle early. Luckily settlement was within policy limits. Had it not been the dealer would be on the hook.
   All dealers, be sure to use the K&K Rider to Central Station to limit your indemnity exposure to your insurance coverage. You don't want to be forced out of business because your central station made a mistake and your subscriber suffered a horrific injury.
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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