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    A Palm Beach jewelry store paid $1200 for an alarm system and $300 a month for monitoring and service.  Burglars broke in, put up black out shades and spend a few hours looting the place, all while the alarm "didn't work".  Million dollar loss claimed.  Subscriber is claiming fraud and breach of contract.  ADT defends based on contract terms. The same news article that reported this new lawsuit mentioned another lawsuit started last year by drug manufacturer Eli Lilly when one of its warehouses in Connecticut was burglarized and 60 million dollars of pills stolen.  That case is going to trial soon, according to the article. [BTY, thanks to Stephen Wolf in West Palm Beach, FL for sending me the article.

    Of course everyone in the alarm business loves a good story about ADT [except ADT].  ADT is hit with lawsuits all the time.  But why should the alarm industry find that odd?  It shouldn't.  ADT has a large proportion of the alarm systems out there and should therefore expect the same proportion of losses and claims.  

    This should give you moment for pause.  Many of you have not been sued yet.  Some have not experienced a subscriber claiming a loss because the alarm didn't work.  After a while you might even be lulled into a false sense of security, that your service, your central station, your technicians and your systems, and your luck, is a step above everyone else's.  You're not going to have a loss.  And, even if you have doubts, you figure that the insurance you pay for each year, that E&O coverage, will be there to protect your butt [not to mention the Standard Form Contracts you religiously use].  All things considered, why shouldn't you expect a loss and lawsuit sooner or later.  What are the odds?  Without any statistical basis to form an opinion, why should that stop me.  My guess is that you should expect your odds to be in line with your percentage of systems out there.  This of course assumes you operate at the same level as your competitors.  If you run a crappy operation you can expect to be sued more, beyond your statistical proportion of the business.  

    How does the publicity of alarm failures and lawsuits affect you?  It's no wonder that that we hear about ADT's lawsuits more; it has lots of subscribers.  While the alarm industry can thank ADT for massive and invasive advertising promoting security products, educating the public what's available, the flip side should be expected.  More losses, though not statistically out of line, reported and sensationalized.  That negative publicity is not good for ADT and it’s not good for the alarm industry.  

    It appears that ADT vigorously defends claims by subscribers, though I suspect we hear about only the claims that ADT does not privately resolve.  Like all alarm companies ADT probably tries to resolve claim issues before they escalate into full blown lawsuits.  I am also sure that the contract provisions dissuade many subscribers and their insurance carriers from bringing suit for losses.

    All this should remind you that you too are exposed, despite all your efforts and precautions.  Prepare yourself for the inevitable by having a proper contract is place and adequate insurance backing you up.      Annual review of your operational policies, contracts, relationship with vendors, central stations and insurance coverage is necessary. Those of you in business for 20 or 30 years who pride yourself on little or no change, expect you find it hard to find window foil, need to wake up.  Your day of reckoning is coming. **************************

TO SUBMIT QUESTIONS OR COMMENTS REPLY TO THIS EMAIL OR EMAIL Ken@Kirschenbaumesq.com.  Most comments and questions get circulated.

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Speaking Engagements

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Sonitrol Verified Electronic Security.  Annual convention March 22, 2014 at The Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas.

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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  contact Shelly  (205) 933-9000 for more info