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Why cancel subscriber?  Follow up to article on Sept 22, 2014
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Ken,
    I have been getting your newsletter for about 6 months and find it invaluable.  I am writing for the first time with regard to “Cancelling” in your 9-22-14 newletter.  There must be more to the story but why would someone be in such a hurry to cancel a customer who will not sign a new contract?  I may understand if the contract is not evergreen but my feeling is that with every month that a subscriber pays that monthly monitoring it is that much more revenue that I am collecting.  I like new contracts but would not cancel a customer just for not signing a new contract unless there were other factors involved.
Tom
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Response
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    If a subscriber is under a, enforceable written contract that provides some protection to the alarm company in the event of a claim there is no need to cancel that subscriber judt because it refuses to sign a new updated contract.  However, if the contract is expired or if the enforceability of the contract is in question, or the contract provisions facially inadequate, then the smart move is to terminate the subscriber unless a new contract is signed.  While you may want to continue receiving the revenue from the subscriber the risk of providing the services without contractual protection just isn't worth it.  If the subscriber does pay a significant amount that does justify the risk then you should beef up your insurance coverage to make sure that you have coverage if and when you get a claim.  
    Another issue is that some subscribers are not worth the effort to service and retain them.  Whether the sub is paying $16 a month or several hundred dollars, the time, energy and expense of providing the service may not be worth it.
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Follow up on how much insurance
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    I received a lot of feedback regarding the article on how much insurance you should be carrying.  One million for burg and three million for fire, the advice I gave, was right on the money.  Sure more is better and if the added premium is within your budget then add the coverage.  Problem is that 5 mill, 10 mill or even 15 mill may not be enough, especially if you do fire alarms.  Perhaps more important is

  • the contract you use - be sure it protects you
  • your operating procedures - make sure you're careful and professional
  • licensing and AHJ compliance - make sure you comply
  • E&O and other insurance - be sure to carry the right insurance.  Selecting the right carrier is important, and you do have many choices.  I recommend SARRG and Zurich.  I don't recommend Hartford or First Mercury.  I'm sort of warming up to Scottsdale.  Your broker should be able to place you with several carriers, so be selective.  Premium will be the least of your concerns if there is a real claim brough against you.


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Speaking Engagements


If you would like to schedule a free live video/webinar presentation for your association meeting or event contact Eileen Wagda at 516 747 6700 x 312.

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Alabama Alarm Association.  AAA's Fall Meeting and Trade Show - October 21, 2014 from 3 to 5 PM at DoubleTree Hotel 808 South 20th Street Birmingham, AL 35205  for more info contact AAA Executive Director: director@alabamaalarm.org  (205) 933-9000