You can read all of our articles on our website. Having trouble getting our emails?   Change your spam controls and white list 

should employee carry personal liability insurance / Commissioned salesman – what’s the deal

August 20,  2021
should employee carry personal liability insurance
          Fire professionals carry personal liability insurance for the work they perform that is outside of the umbrella of the company they work for.  Would you know where/if that is stated in code?
          The general principle of law is that a person is liable for his own negligence.  A tech goes to a house and "negligently" drops hammer on glass table.  While a claim would normally be made against the employer, who is responsible for the employee’s acts within scope of employment, the employee is liable personally for his own negligence.  The employee would be entitled to indemnify from the employer, but if the employer goes bust the employee could be on the hook.
          Employees are covered by the employer’s E&O coverage.  I am not aware of any code or NFPA requirement that employees carry personal insurance.  I also don’t know of any employees who carry personal insurance of if it’s even available.  A home owner’s liability policy and umbrella will exclude business activities.
          You can add employees to the list of those depending on you to use proper contracts. That list includes your central station, your insurance company, third party vendors providing communication platforms and equipment and other subcontractors.  Don’t let all of them down by using no contracts or outdated contracts.  Most of all, don’t damage yourself – update and use Standard Form Agreements.  For commercial fire the proper contract is the Fire All in One.
          Insurance brokers are welcome to provide guidance.
Commissioned salesman – what’s the deal?
          We have a sales rep that has decided to move to another state;  we offered him a commission only compensation going forward but I don’t think he will accept it. If we end the relationship with him, what is our requirement to pay any ongoing commissions on jobs he has already sold?  We do not have a contract with him. 
          This is a complex issue, and it is entirely avoidable.  It’s your job as the employer to avoid this kind of problem and you do it with a carefully worded Employment Agreement.  In fact, if you are in New York there is a particularly harsh penalty for engaging a commissioned sales person without a written contract.  In a dispute that progresses to a law suit only the sales person can offer evidence of the “commission arrangement”.  If there is a dispute if the commission attaches to the RMR for as long as the customer pays, whether or not the employee continues with the company, and only the sales person can testify, how do you think that dispute is going to end?
          I don’t know if other states have similar laws, but I wouldn’t be surprised. 
          It is arguably equitable that a commissioned sales person have a permanent stake in a customer’s RMR.  Of course an agreement that the commission ends at some point or if and when the commissioned person leaves the company is also reasonable.  In fact, I can’t say that one arrangement is more or less prevalent in the alarm industry. 
          At first blush you may ask why you should make the commissioned person a “partner” in the RMR for a long as the customer continues to pay.  The answer may be as simple as wanting to reduce the up-front commission and spread it out over the anticipated life of the customer’s relationship with the company.
          Other alarm owners would prefer to pay the commission when the customer is signed up and have no further obligation to the sales person.  There are plenty of reasons to go in this direction, including the possibility of selling the accounts and not having to “buy out” the sales person.
          You might be saved by a statute of frauds argument, that an agreement not capable of being performed within a year needs to be in writing to be enforceable.  I don’t know if an on-going commission arrangement would come within “capable of being performed within a year”.  That answer would require considerable legal research, at considerable expense, all of which could have been and should have been avoided by using an Employment Agreement [for a W2 employee] and a Sales Affiliate Agreement [for 1099 subcontractor doing sales for you].

To order up to date Standard Form Alarm /  Security / Fire and related Agreementsclick here:
You can check out the program and sign up here: or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304.
NOTICE:  You can always read our Articles on our website at
THE ALARM EXCHANGEalarm classifieds alarm security contracts

    This area is reserved for alarm classifieds, alarm company announcements, solicitations, offers, etc. 
    There is no charge to post a listing here.Include your contact information, phone, email and web site.  If you would like to submit a post, please send an email to  To create a reciprocal link to our website, click here.

Getting on our Email List / Email Articles archived: 
    Many of you are forwarding these emails to friends or asking that others be added to the list.  Sign up for our daily newsletter here: Sign Up.  You can read articles and order alarm contracts on our web site
Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301