QUESTION:

Ken,

Do your Monitoring Contracts state that the system is to be tested once a month? I ask because that "statement" has saved me (when I had my alarm company) on more than one occasion. The customer would identify that the system doesn't work and want credit to the day it was installed. Of course that is not going to happen due to the "Limits of Liability" clause in the Monitoring Contract and the testing required statement in the Monitoring Contract. Once this has been explained to the customer the customers, in my experience, are cooperative and agreeable.

With regards to any liability, I believe, there are many factors to take in consideration. One, as you said, the customers expectation. That expectation may be set by other than alarm company personnel. If it is a commercial system, an AHJ may require that the system meet UL or FM specifications. The AHJ can be the insurance company.... If it is a residential system, and no AHJ is involved, then the expectation should be set by the terms of the contract. I say that knowing that if something were to happen and the issue is decided in a courtroom, then there are only two concerns I would have.

1. Is my contract of which was explained to the customer in detail, clear and complete?

2. Is my attorney knowledgeable to the issues of my industry, my company, my legal concerns?

If the system is required by anyone; landlord, insurance company, NFPA, local ordinance... to meet a certain standard, then not meeting that standard can or will be an issue if something goes wrong. I would not want a signed statement by the customer

saying I was told the system may be compromised by a representative of the alarm company to be my defense especially considering that the alarm company representative maybe considered as the security expert. But that is just me. Good contract and good attorney equals good business.

Michael D. Colyott

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ANSWER:

    The question raises an interesting and important issue.   Inspection and Testing.  Do your contracts require testing?  My standard contracts do not provide for alarm company testing of the alarm system, except for the Fire Alarm Inspection Contract, which is designed by inspection and testing.  www.alarmcontracts.com

    Few alarm companies provide for inspection or testing in their contract, and that's because even fewer alarm companies provide those services.  Rarely does the law require inspection or testing, and neither does UL, except for fire alarm systems and UL listed central station systems. [OK I am going out on limb with UL - so feel free to blast me if I'm wrong].

    The point is that you should not be imposing an obligation, in this case to inspect and test, when you aren't going to perform the services.

    What my contracts do provide for [again except for the Fire Alarm Inspection contract] is that the subcriber is in possession and control of the alarm system and it's the subscriber who has the obligation to test the operation of the alarm and let the alarm company know if service is required.  This places the onus on the subscriber, where it belongs.  Alarm companies are not paid enough to keep a man on site to continuously insure that the alarm is functional.  Service upon request, that's the practice and that's what the contract should state.