What electricians need to know about the alarm industry

After speaking to a number of electrical contractors who are involved or getting involved in the alarm industry it has occurred to me that most don't appreciate some of the differences between the two businesses. This article addresses two of those differences.

Take almost any construction job, residential or commercial, large or small. The dollar amount of the alarm company contract is going to pale in comparison to the electrician's contract. And the alarm company will probably have to fight to pull its own wires. Often it's the electrician who brings the alarm company in. It's the electrician who is going to make the final hook up for the fire alarm in most jurisdictions. It's electrician who is going to make more money on the installation contract. Why then bother with getting involved with the alarm industry?

The electrical contractor does its installation, makes its money, and it's done. The alarm company does its installation, probably makes lots less money, even on a percentage of contract basis, but retains a continuing relationship with the subscriber, one that generates recurring monthly revenue. That RMR contract is a saleable commodity; a retirement package that grows to a sizeable pot of gold if the alarm company conducts its business as it should. That's the first distinction between the two trades.

The electrical contractor does its installation and has to worry that nothing it does, none of its wiring or components, cause a fire or damage from electrical outage. The electrician needs to worry about its own work and material. The potential damage is loss of property and injury or death, but only from electrical failure.

The alarm company does its installation and has to worry about everyone else's work and conditions. The risk facing the alarm company is from the unknown and it's unlimited. The alarm company isn't worried that its work will cause a fire or burglary or other loss; it has to worry that something else will cause that loss and the alarm will not detect the condition or the alarm will not be successful in preventing or reducing the loss. The exposure is broader; the risk higher and the potential for damage to property or person much more extensive because of the increased risk. Electricians don't have to worry about flammable containers, microwaved popcorn, coffee pots, frozen pipes, sociopaths, you name it.

Electrical contractors [and yes, all alarm companies] need different contractual protection then they are use to. They are use to the AIA contract; sometimes no contract; a proposal form. This simply will not do in the alarm industry. The electrician form contracts, especially the AIA, will not protect you from liability, and it won't build your RMR. If you'd rather not invest in the alarm contracts, stay in the electrical business.