comment on alarm co failure to sign contract / more on First Mercury - beware May 22, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
You can read all of our articles on our website     Having trouble getting our emails?   Change your spam controls and white list ken@kirschenbaumesq.com, secure.mybiz.com and mybiz.com 
**************************************************************************************************
comment on alarm co failure to sign contract / more on First Mercury - beware
May 22, 2017
***********************
comment on alarm co failure to sign contract from May 17, 2017 article
***********************
Ken, 
    Regarding the May 17, 2017, comment from ‘Raz M,’ whose sales people didn’t sign the monitoring agreement, there may be another issue.  My due diligence people have looked at hundreds of thousands monitoring agreements.   We note the lack of company signature as an exception and let the Buyers and their counsel deal with it.  Typically it is just a handful of agreements and the Seller just signs them.  If it is a repetitive issue, 100’s of agreements, or if it seems to be more prevalent in the more recent agreements, we view it as a sign of possible detached management.  If agreements are coming back to the company and no one is signing them, we are concerned that no one is reviewing them to ensure that no critical modifications have been made.  
    This isn’t just an issue for companies that are selling.  The Buyer is concerned about potential infirmities in monitoring agreements.  They don’t want to buy a liability.  If your company has an ‘infirmed’ agreement you already own it.     Monitoring agreements are a security company’s most valuable asset, make sure that they are properly drafted and not fatally modified.
Mitch Reitman
Reitman Consulting Group
Fort Worth, 
817-698-9999
http://www.reitman.us
**********************
Response
*********************
    Excellent comment.  It's a bad practice not to sign contracts.  It's one of the reasons I don't like including a provision in the contract that it has to be signed by a corporate officer back at the home office.  Too often it doesn't get signed and returned to the subscriber.  If the subscriber is a consumer the contract is not valid until returned to the subscriber fully executed and you also have to give the 3-day notice at that time.
*********************
more on First Mercury - beware !! from May 17, 2017 article
**********************
Ken,
    We are insured by First Mercury and reading your newsletter recently have me concerned.  After reading today's I sent a note to my broker expressing my concern; her reply is below.  Her reply doesn't alleviate my concerns though.  I am not an insurance expert or lawyer, so I am at a loss as what to do.  One issue, my water based fire suppression insurance is very difficult to get, and her brokerage agency has been the only one to be able to get it for me, through First Mercury.
         We would want you to defend us should there be an action brought against us, and until now, thought that First Mercury would use you. 
         So, the question is, how do we know if our policy is any good?  Should we get a second policy?  Should we change and possible not be able to get sprinkler coverage?  What happens if we have two liability policies?
Jeff 
***
Jeff,
    Ken used to do defense work for First Mercury and no longer does.
    In response to the coverage question, your policy doesn’t have the third-party action over / employee exclusion referred to below.  First Mercury doesn’t put that exclusion on policies written for my clients, by request.  If you have any other questions or concerns, please let me know.
name withheld
********************
Response
********************
    Correct I no longer handle cases for First Mercury.  We clashed too often because I cared about the alarm industry and preserving legal precedents, and FM cared about figuring out how to get out of coverage, how to handle a claim as cheaply as possible and settling whenever the cost of settlement was figured to be less than defense cost. 
    The broker's response is interesting though.  So FM is perfectly fine screwing it's insured by excluding coverage that it's insured needs, coverage for contractual indemnity and no employee exclusion, but only if the broker is smart enough to ask for that.  
    Why not look for a carrier that's on your side, when you sign up and when there is a claim.  Most brokers, including the one responding above, can place coverage with more than one carrier.  Ask for competing coverage, not just competing premium quotes.
***********************

THE ALARM EXCHANGE

Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com
oovoo account: KenKirschenbaum