Question:
********
Dear Ken
As a third-party monitoring central station, I am constantly amazed at the number of installation companies that refuse to obtain a new monitoring agreement when they make a name or address change to a customer’s account. They claim we’re being adversarial and threaten to switch to another central that does not require such stringent diligence with their contracts. I try to explain to them the amount of liability involved without a properly executed agreement, but I feel my pleas fall on deaf ears.
How would you best “educate” an installation company on why a new agreement is necessary for changes in subscriber information like name and address?
Thanks,
Jake M
********
Answer:
*******
Your alarm dealer should be more appreciative of your concerns - for them and you. A wholesale central station is wise to be concerned about the potential liability that its dealer faces. That liability often spills over to the central station.
One great argument you have to encourage your dealers to make sure they have proper contracts is the indemnification provision the dealer has signed with the central station [of course you may not really want to rub that in]. Since the dealer has agreed to indemnify the central station it is important that the dealer have a proper contract with the subscriber that contains all of the protective provisions the alarm industry relies upon. Those contracts are obtainable at https://www.kirschenbaumesq.com/alarm2.htm
Your question raises two issues. Name change and address change. Let's deal with them separately.
A "name change" is usually an entity change. If it's a real name change, i.e. a corporation changing its name or a natural person changing his or her name, then no new contract is needed. If a different person or entity is going to be the end user then you need a new contract or assumption of the existing contract; otherwise you have no contract and you have lost the protection of "contracting away liability for you own negligence".
Address change is another matter. That may actually mean that the old contract is terminated. Address change means that the subscriber has moved. EIther the old system was removed and reinstalled or a new system is installed. A new contract is needed, or a writing that provides that the old contract is amended to cover another address and installation. [get a new contract].
An alarm company that does not use contracts is really saying that "I am willing to accept the fact that a single claim against me is enough to put me out of business, and in any event my business has no equity value anyway".
**********
Question:
**********
Hi Ken,
I tried to find an article on your web site but couldn’t. Surly you’ve touched on it before.
My question is this;
In as much as we would want accurate “paper”, are there compelling reasons to prioritize obtaining a new contract? Are there risks in not doing so? Details below.
One of our current customers changed the name of their business recently. <Smith Body Shop> to <Smith Collision Center>, (actual name withheld).
The name is the actual name of the owners, (two brothers). We do other properties for them. The building location and type of business have not changed.
No problems of any type exist with this customer.
Thanks,
Roger
***********
Answer:
*******
This question came in after I wrote the answer to the above and illustrates again how important this issue is. Rule 1. You cannot provide any type of alarm / security services without a properly worded contract. Rule 2. Make sure you know who your subscriber is. Rule 3. Whatever your relationship is with your subscriber, you have no relationship with your subscriber's insurance companies - they will sue you, so see Rules 1 and 2.
Rule 4 - get your contracts at www.alarmcontracts.com