KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Risk of loss for equipment on site in your inventory for job or in storage
December 21, 2021
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Risk of loss for equipment on site in your inventory for job or in storage
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Ken,
          In this era of just in case inventory we are finding increased pressure from builders and customers paying us to buy out entire jobs so it can be completed on schedule. But there are insurance costs, damaged product, etc., that are starting to become a concern. 
          Besides quadruple inventory we are running out of space.  One option is to rent storage space. I think we should probably have some kind of an agreement executed at this point that puts the storage unit and liability back on them because it’s becoming more the norm than an exception.
          Your thoughts are welcome. 
John
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Response
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          Interesting issue, especially when raised by an experienced alarm dealer.  I’ll get to that later.
          I think a customer would be smart to insist that all equipment be “on hand” before the job starts.  Whether all equipment is available is also an important issue when contracting because you want to know that the equipment is available so the job can be completed timely.  This is especially important when other trades are on the job or a fire alarm needs to be completed to get the Certificate of Occupancy. 
          The Standard Form Agreements do shift the risk of loss for equipment that has been delivered to the job site.  Plenty of equipment disappears or gets damaged after delivery and before installation, and often enough after installation and before the job is complete.  Who bears the risk of loss should be covered by the agreement between the parties.
          Securing inventory for your jobs is becoming more of an issue with supply chain reduction and in some cases elimination.  One option would be to store your inventory in a warehouse.  You want to know if the warehouse will assume the risk of loss, insure the loss while the inventory is in its possession.  That’s a pretty curious position from an alarm dealer who knows about limiting or excluding liability for loss; shifting liability and responsibility for damages, because it’s rarely the alarm company.  Well, the alarm industry won’t be able to pull the wool over the warehouse industry eyes, because they too know about limiting liability.  The storage contract will have many similar provisions as your alarm contract.
          But, no harm in asking.
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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