KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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More on subscriber without insurance
July 24, 2026
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More on subscriber without insurance from article on June 26, 2026
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Ken:
In reading the latest articles regarding ‘if a potential subscriber does not have insurance, don’t do business with them’ reminds me of the conversation I had with the owner of a HUGE jewelry store going in and him wanting a quote from my company; I was recommended by a friend of his.
I wanted to know the insurance broker contact information and he informed me ‘you don’t need that information’.
HUH???
I depend upon the requirements from the insurance broker (* many times Jeweler’s Mutual) to ensure there are not any ‘oops’ and angry subscriber when the insurance underwriter starts to question the level of alarm service and UL Certificate that is issued.
It turns out they did NOT have ANY theft insurance (*I did some ‘back door’ inquiries and found this information out).
I declined to quote or further the conversation as obviously he knew much more than I and was an ‘expert’ in both Jewelry store security and alarm systems.
Reason – if there is an ‘oops’ and a loss, it is no longer between my insurance company and their insurance company, it is now PERSONAL AND THE SUBSCRIBER HAD THE LOSS AND WILL NOW HAVE TO COVER IT INTERNALLY!!!
I’ve been in court on the witness stand and did not enjoy the experience of having 5-years taken out of my life just because the subscriber did not want to get out of his warm bed that very cold middle of the night and now he had a loss and wanted blood (*we dispatched 3-times and the second Jury found for my company! – went through 3-judges and 2-Juries over less than $50K loss!!).
So, sometimes the best thing to do is run away from that trouble type of subscriber!
Just my 5-cents, *used to be 2-cents, but with today’s inflation and all….
Respectfully,
Joseph (Joe) Pfefer, President & Founder
Jade Alarm Co.
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Response
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You've been in this business as long as I have, and your experiences are valuable for others in this business. I can't fault you for being overly cautious in business decisions, especially when liability is involved. [And before I move on, the issue of liability is interconnected with the issue of equity, because taking on risks reduces your value to potential buyers] But checking on this potential customer's insurance, or any potential customer's insurance, may not really be necessary, any more than insisting that you scrutinize the inventory value and lease improvements that might be damaged in a burglary or a fire.
You use K&K contracts and you are protected contractually as best you can be. The All in One, whichever one you use [Residential, Fire, Commercial Security, Fire Protection] requires the subscriber to carry sufficient insurance to protect itself and also requires that Jade be named as an additional insured. Sure, many subscribers don't end up naming the alarm company as additional insured, but most still agree to indemnify the dealer, so sometimes the subscriber's carrier will provide the coverage if the policy has contractual indemnity without the additional insured endorsement. Even if the subscriber has the insurance most alarm companies don't press to see that it has been named as an additional insured. Then the problem is that most claims come as subrogation claims after the subscriber's carrier pays the subscriber for the loss. The All in One deals with that too, as long as you haven't stricken the provision.
Your 5 year ordeal in court is most unlikely now that you are using K&K Agreements. The contracts offer plenty of defenses that warrant summary judgment in most cases, and even better news is that most insurance carriers and most subscribers won't bother suing the alarm company if they see the K&K contract before suing. On that note, some E&O carriers won't get involved before an actual lawsuit is started, so they are missing the boat on taking the opportunity to dissuade the lawsuit in the first place. That's their problem, and of course yours because you have to get involved in the lawsuit.
You're also a Concierge Client. Had you called me before walking out on the customer I would have suggested getting the contract signed before leaving. You could always have asked for the insurance coverage before getting started on the work and when the customer told you there was no insurance you could hold them in breach. Just another way of handling it.
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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
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