What happens when you challenge your own contract - additional insured December 17, 2025

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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What happens when you challenge your own contract - additional insured
December 17, 2025

What happens when you challenge your own contract - additional insured

Ken:
   Question regarding Fire Alarm All in one contract, under 17. INSURANCE / ALLOCATION OF RISK:
   I have never requested that a customer add us to their insurance; our sales team is raising concerns about this. Is this an industry standard?
   Subscriber shall maintain a policy of Comprehensive General Liability and Property Insurance for liability, casualty, fire, theft, and property damage under which Subscriber is named as insured and Alarm Co is named as additional insured, .... and to indemnify Alarm Co in the event of destruction of the premises or equipment."
Kind regards,
Emerson

Response

   I spend hours each week [mostly for Concierge Clients] negotiating with subscribers' counsel about the terms in the K&K Standard Form Agreements. Less common is having to negotiate with my alarm client.
   Alarm client negotiations come up when the alarm company owner starts with "I can't ask anyone to sign this contract":; "I can't anyone to sign this contract"; or what they really mean to say, "no way would I sign this contract, how can I ask someone else to sign it".
   I do have a rather quick response. You are not the customer. You are not undertaking the obligations of the customer. Most if not all provisions you "question" are in your favor, overwhelming so. Why would you object to them?
   Another observation I like to point out is that whether you know it or not, your "feelings" about the contract, even if you try to hide it, will be written all over your face, your demeanor, and the way you interact with your customer; you telegraph the message: "I would never sign this contract". Yet here you are presenting it to your customer.
   So the first thing I need to understand, to believe, is that your contract is the industry standard; most alarm companies use it or something that reads remarkably like it; that every provision is there for a reason and the reason is your protection. Not really protection for things you should be responsible for but things that you shouldn't be responsible for.
   Things like a burglary loss; a fire loss; things that confuse you with being an insurance company or a reinsurer for the customer's insurance company.
   The reason for the additional insured provision, an "insurance procurement provision" in legal parlance is that claims that you do not want to be responsible for will be covered by the customer's insurance company, not yours. Perhaps more importantly, if you are named as an additional insured the carrier cannot sue you for the loss, so there will be no subrogation case against you. Since most lawsuits against alarm companies are from customer's insurance companies suing under subrogation, the additional insured provision comes in handy.
   Having now explained why the Insurance Procurement Provision is in the contract, and how its contra productive for you to challenge your own contract terms, there are times I agree to remove the provision from the contract in order to save the deal. But removing that provision, and most of the other provisions, particularly the "legal" provisions, needs to be done by a lawyer who understands the contract [how about calling the one who wrote it!!!] because there are many provisions that duplicate protection so you can give one or more as long as other provisions are intact.
   It's almost a new year; time to try a few things you've "never done". Using and getting proper contracts signed should be old school by now, but believing in them might be new, and about time.

STANDARD FORM AGREEMENTS: To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com
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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