December 21, 2011

 

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According to a news article a civil jury in DeKalb County, Georgia, a 64 year old woman who was raped in her home was awarded $9 million against the central station monitoring company. The subscriber paid $30 a month for burglar alarm monitoring. She left her home in the morning and when she returned later that evening the burglar [who was arrested and convicted] was waiting for her and raped her. The central station records revealed that the central received a burg alarm at 10:27 AM. The operator called the house and the subscriber's sister, didn't get them, and called the police. The police responded, checked the perimeter of the house and saw no evidence of a break in; they left. Apparently the alarm went off a few more times [attributable to interior motion sensors] and the central placed the system on hold. The central station also reached the subscriber's sister during the day to report the alarm. The subscriber returned home at 7:26 PM, entered through her garage and heard the alarm. The central called but did not tell the subscriber that it was the eighth alarm of the day.

Reportedly there was testimony at the trial that the central station's protocol was to advise subscribers not to enter a home alone after an alarm condition. Also, the subscriber noticed her bed was wrinkled and there was a bottle of liquor on the floor in her bedroom. She stayed in the house about 20 minutes before she was attacked. The attacker took her in a car to an ATM machine, drove her around town, at one point told her she could get out of the car, also telling her that others outside the car were with him and would hurt her if she did leave the car. He took her home, raped her, passed out drunk and subscriber left the house and called police from a neighbor's house.

According to the news article, the central station's attorney [hired by the insurance company] said he needed a trial to establish legal issues. He also said the jury did not find gross negligence.

There is no mention in the news article whether there was an alarm contract, and I don't know if there is any history to the case pre trial, such as motions for summary judgment to dismiss based on contract protective provisions. Georgia does not permit a jury waiver clause in the contract [jury can be waived but not in the contract].

According to the news article the alarm co attorney is making a motion to set aside the jury verdict, which would be on legal basis [could be the contract provisions now that gross negligence has been ruled out] and would appeal if necessary. Good luck to the alarm company, because it carries $1 million E&O with $5 million excess, still not enough to cover this verdict if it sticks. This company can handle the loss I suppose.

It would be interested to know if there were any pre trial negotiations and if the Plaintiff was willing to settle for insurance policy limits, and if so, if those limits were offered. Hopefully someone will keep us posted.

 

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Comment

 

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Ken,

This is an excellent checklist for the New Year. Your Standard Alarm Contracts are essential to success in the security and life safety industry. To add to your list, I'd also recommend that alarm company owners print their contracts at MonitoringContracts.com for additional savings this year. They'll save an additional 10% when they use coupon code KIRSCHENBAUM10 at checkout.

Best wishes,

Jake Voll

Monitoring Contracts

Toll-Free: 866.364.0030 ext. 222

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There was a typo in yesterdays email [yes I know, and in most of them] that I want to correct in paragraph 1. Here is yesterday's email corrected.

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New Years Resolutions and Predictions for 2012

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Happy, healthy and prosperous New Year to all.

It's that time of year again, so here's some thoughts on New Years Resolutions for 2012 and Predictions for this year:

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1. Contract scrutiny by potential buyers, and judges who are charged with enforcing your contracts will be more stringent. Update your contracts. Your contracts are the most important asset you have in your business. It's your contracts that will protect you from liability and build equity in your business. Your goal for 2012 should be significant RMR growth. I predict that the multiple that will be paid for state of art contracts will increase this year.

2. RMR growth will depend not only on aggressive sales efforts but diversification of your services. System Integrators do more than intrusion systems. Subscriber enabled monitoring services, permitting Subscriber to view data, listen to audio, arm and disarm systems will become more popular and money maker for alarm dealers. This technology should also assist with false alarm problems and issues. Also remember that it's important to balance your sales, if possible. That means not limiting yourself to just commercial, or residential; to just leasing or just sales; just intrusion or just fire. Mix it up as long as you have the competence to provide the service. Use the Standard Alarm Contracts to structure your RMR growth. The Fire All in One and the Subscriber Enabled Monitoring Service contracts are great contracts to increase your RMR. Be sure you're using your own Monitoring Contract and not just one provided by the central station.

3. Check your insurance coverages. Not all insurance companies are the same and not all premiums are equal. You want to be sure your E&O coverage is current and in sufficient amount. Take some time to evaluate your life, health and disability insurance needs and be sure to look for competitive pricing.

4. If you are still conducting business in your own or an assumed name you need to incorporate, do it now. You don't want to continue to invite personal liability for your business activities. I recommend a business corporation, sub chapter S election.

5. Make sure your license to conduct your business is active and up to date. Be certain you know all of the licensing requirements in all of the jurisdictions you do business. It's not enough to get the license. There are all kinds of Regulations that go along with that license, many of which effect your employees. Be compliant and avoid heavy fines and possible suspension or loss of your license.

6. Review your accounts receivables. In our economic environment it is essential to stay on top of your receivables. You may need to become more aggressive with your collection efforts and procedures. Don't carry subscribers who are in default, which means falling out of their regular payment schedule or more than 30 days in arrears.

7. If retirement or sale is remotely in your future start thinking of an exit strategy. If transition to family members is your plan then perhaps you need a Trust and should start transferring stock to that Trust, or to your kids now. If you think you might sell out then you need to start running your business like a business. In either event, you should be increasing your recurring revenue under contract. For transactional legal services, which you should seek before you start making deals, make sure you engage a competent alarm attorney - give me a call.

8. Try to pay down debt. Manage your business to operate within its means. That's sound advice for your personal finances as well. Working harder and making better sales decisions is a better way to raise money. Selling your subscriber accounts and contracts is like selling your soul to the devil. If you belong to a dealer program or group that encourage you to sell your subscriber accounts then get out and pick another dealer program. If you sell your accounts to your dealer program you may as well get a job with benefits, you'll probably end up with more money, vacation time, health benefits retirement plan and less headache.

9. Make sure you are getting the best deal from your suppliers, and that includes your central station and equipment distributors. Times are tough for them too and they are looking to hold on to good accounts, like yours. Be sure you have your own line into the central station and that your control panels are remote programmable. If you now own your radio network then your contracts probably have to be updated. Give me a call. If you pay your bills you have a right to be demanding. Affordable services are available from reputable suppliers; you don't have to continue dealing with suppliers that are not responsive to you or your subscribers' needs and requirements.

10. Get the Standard Alarm Contracts at www.alarmcontracts.com. All of them. They will make you lots of money and protect your business. The longer you wait the longer you put your business at risk and delay in growing your RMR.