Should you contract for Fire Inspection with Service by others?

Question:

    Ken,

Thanks for your quick response. I agree a service contract is the only 
smart approach & we will certainly take a look at your contract. I look
forward to your remaining thoughts on one company performing the Testing
and Inspection Service and another company performing the necessary
service. It's a real hot issue with our team.
Thanks so much
Bonnie


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Answer:

 Although I think it would be an unusual relationship for your
subscriber to trust you with the inspection but not the actual service or
repairs, I don't see any problem with it. The Fire Inspection Service
Contract I offer provides for recurring revenue for the Inspection only.
If service is necessary the contract provides that the subscriber has to
pay Time and Material charges, but the subscriber is not under obligation
to use you and can call in another company to provide the service. Your
obligation under the Inspection contract would not oblige you to make your
next Inspection until the next scheduled date, which may be annually.
If you are on the other side of the issue, the one performing the
service and not the scheduled inspections, then your responsibility is to
make the repairs, check the communication, get your completion certificate
[certifying that the system is working] and leave. Make sure you are
providing service pursuant to the Service Contract, which has two options,
recurring revenue or per call service.
If you are under contract to provide the Inspections and your
subscriber also wants a contract for service including service and
material, then you use the Fire Inspection / Service Contract, and the
separate Service Contract.
 What happens if the is a loss after your inspection and after the
service provided by another company? The answer will be fact sensitive.
If your Inspection and repair recommendation did not pick up the real
defect then you may face exposure, though more than likely if a repair has
been made after your inspection then the repairing company will have tested
the system. The repairing company, the last company there, has the greater
exposure. As the Inspection company you would have to miss a problem that
was also not discoverable by the repair company. It can be confusing and
both companies are likely to be sued unless the cause of the loss is easily
found.
In conclusion, I would not refuse the contractual relationship for just
Inspection or just service on a fire alarm if your only consideration is
potential liability.