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Unlicensed fire alarm installer, not to code system, fire loss.  Is there liability?

April 8, 2023
Unlicensed fire alarm installer, not to code system, fire loss.  Is there liability?
          This issue comes up from time to time. 
  *  Will the alarm company be liable if it doesn’t have a license? 
  *  If its installer employee isn’t licensed? 
  *  If the fire alarm system isn’t to code? 
  *  If a security system isn’t installed pursuant to manufacturer instructions? 
  *  If monitoring deviates from laboratory guidelines?
          The answer is the same for all questions, maybe.  The first issue is, was there in fact a loss, because with no loss there are no damages.  Of course a subscriber could discover a deficiency and insist on remediation if that’s possible, but it’s only possible for system not to code, not the other questions; it’s too late to fix those issues.  So we start with a loss and then work backwards.
          Why do we need a loss?  Well, you could install a totally deficient system with unlicensed and unskilled help but if the subscriber doesn’t have a loss, a fine or some other reason to investigate the system I suppose no one is the wiser. 
          So let’s start with a loss [we could have started with a competitor stopping by to trash you and your system and services – enough to get the subscriber thinking].  There are basically two types of actions a subscriber can pursue for the loss, breach of contract and negligence. 
          For contract the subscriber has to establish it didn’t get what it paid for.  For negligence the subscriber needs to establish that the loss was attributable to the negligence; the loss would not have occurred but for the negligence.  These are of course laymen ways to view the claim and it’s not enough to win a law suit.  The two types of claims share a few common elements, including damages and duty.  For negligence a successful claimant will also have to show that the negligence was the “proximate cause” and that the action or inaction was the foreseeable cause of the loss.  That’s a lot of proof that’s needed to win a case.  You can be sure that the presentation of that proof will start with the fact that:
  *  the alarm company had no license
  *  the alarm company employee had no license or certification if one was required
  *  the installer ignored manufacturer directions
  *  there was custom and practice as well as laboratory guidelines [in some cases codified] deviations which contributed to the loss
          An easier analogy is an unlicensed driver of a vehicle.  There’s an accident and one driver isn’t licensed.  But that fact may not have contributed to the incident, so it’s not particularly relevant.  The argument that the unlicensed driver shouldn’t have been on the road isn’t going to carry any convincing weight; not having a license will be irrelevant.  Where however the cause of the accident is uncertain there will likely be a presumption that the unlicensed driver was the cause of the accident, though proof may be established to refute that presumption. 
          Same goes for an unlicensed alarm company.
          Just one other thought.  Sometimes you sign your customer’s contract form, not your contract form.  That form may have a requirement or warranty that you’re licensed.  If that’s not the case then you’re in breach of that contract.  It may not have any impact on liability for a loss but it could prevent you from recovering money owed to you from the customer.

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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