KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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negotiating contract terms / should you rely on advice from your insurance broker and ins co March 7, 2017
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Next webinar - on licensing - March 9, 2017
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negotiating contract terms 
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Ken,
    I need some guidance.  We are a new company and are trying to do everything the correct way.  We bid on a camera installation for a local municipality.  They approved it and asked for a contract.  We used your Commercial All-In-One Contract and submitted it for their attorney's approval (this was actually our first chance you use one of your contracts since purchasing them).  Well, needless to say, he red-lined it to the point where it looked like a cartel hit was carried out on it.  I supposed that this is common practice for dealing with government entities, but how much of this contract can I afford to lose and still be protected?  After reading your posts and watching your webinars I have no problem walking away from this project if there are too many risks.  Any guidance you could give would be appreciated.  Thanks,
Jim
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Response
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   Our goal is to retain the account and depending on the value of the account we make accommodations by contract modifications.  This subscriber is a municipality so it's not surprising that it found plenty of provisions in the contract that it cannot agree to as a matter of law or policy.  Indemnity issue is a common objection.  
   The bottom line is that whatever you take out increases your risk for liability and damages.  The real question is will you cross the line so that your central station won't want to monitor, your insurance carrier will want to drop you and you seriously put your company at risk.  No account will be worth any of those consequences.
   From a "defense" perspective there are several "protective" provisions in the Standard Form Agreements.  We can give up some, but not all.  We can agree to some demands by a subscriber presenting its own terms, but not likely all.  If the subscriber is willing to engage in meaningful discussion regarding the negotiation of the contract terms then we can more than likely reach an agreement.  How much you bend will depend on the value of the account, and not just in RMR but overall business opportunities.  
   These negotiations are best handled by me and you have to first decide if the legal fees [which can range from $250 to $2000] are worth the investment and gamble.
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should you rely on advice from your insurance broker and ins co
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Ken,
   We use your Central Station Monitoring Contract, Security Sales Contract and Fire Alarm Sales Contract.
   If a potential Commercial Customer is requiring that they be listed as additional insured on our insurance policy, and refuse to sign a contract, our insurance agent gave us the attached INDEMNIFICATION to have the Commercial Customer sign and return to us, provided we don't have a signed contract in place.
   Insurance Company states that if we have a signed contract in place, then this INDEMNIFICATION is not required.  Our Insurance Company instructed us to have the potential customer insert their letter head at the top of the page, sign and return to us for our files, and our insurance companies files.  

     " INDEMNIFICATION, HOLD HARMLESS, AND INSURANCE AGREEMENT 
A.    INDEMNIFICATION AND HOLD HARMLESS
To the fullest extent permitted by law,
___________________________________________, (Subcontractor),
Agrees at its own cost to defend, indemnify, and hold harmless
___________________________________________, (Contractor), its
officers, directors, shareholders, agents, representatives, managers, employees, and affiliates from and against any, and all claims, suits, liens, judgments, damages, losses and expenses including reasonable attorney fees, legal expenses, and costs arising in whole or in part and in any manner from the acts, omissions, breach, or default of Subcontractor, in connection with the performance of any work by Subcontractor, its officers, directors, agents, employees and subcontractors. This agreement is continuous until terminated by either party with written notice.
B.    INSURANCE 
- Subcontractor hereby agrees that it will obtain and keep in force insurance policy/policies to cover its liability hereunder and to defend and save harmless Contractor in the minimum amount of $1M per occurrence, $2M aggregate for bodily injury, property damage, and personal and advertising injury.
- Said liability policies shall name Contractor as an additional insured and be primary and non-contributory to any other insurance policies which provide insurance protection to Contractor. 
- Subcontractor will obtain and keep in force Workers Compensation insurance including Employers Liability to the full statutory limits.
- Subcontractor shall furnish to Contractor certificates of insurance evidencing that the aforesaid insurance coverage is in force.
Subcontractor ______________________________________
Signature __________________________________________
Date ______________________________________________"

    I know that having a signed contract in place is preferred, however some clients refuse to sign our contracts.  What are your feelings on this document?  Is there a better way to handle this?
Tom 
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Response
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    You should not be taking legal advice from your insurance broker [I don't care who he or she is] or your "insurance company", no matter who at the company advises you.  You get legal advice from a lawyer.
    You are also not using the best contract.  You are using old forms and should be using the Fire All in One for this job.
    Finally, the indemnity provision you were given is not suitable for this transaction because it's between a Contractor and Subcontractor, not alarm company and subscriber.  Your municipal subscriber is not going to sign this Indemnity Agreement and whoever recommended it to you either didn't understand what you are trying to accomplish or doesn't understand, period.  
    I can't recommend that you give up the indemnity provision because I don't know what else this subscriber wants to change in the contracts, though I have a pretty good idea.
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Title: All You Need To Know About Alarm Licensing and Contracts for DIY 
When: March 9, 2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: General discussion about licensing in the alarm industry for DYI. Different types of licenses, where you need them and how you get them. How and when to use License Holders or Qualifiers for your business and how to become a license holder for a company. Risks involved in not being licensed. Contract you will need for nationwide DIY monitoring agreements.
Who should attend: Alarm company owners, general managers, compliance managers and license holders.
Presented by: Ken Kirschenbaum, Esq.
Register here:   https://attendee.gotowebinar.com/register/2585168820901654273

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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
516 747 6700
www.KirschenbaumEsq.com
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