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comment on how much are you leaving on the table / Free Webinar
September 11, 2018
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comment on how much are you leaving on the table from September 3, 2018
    Love the newsletter.  When it comes to contracts for service, repairs and inspections are we increasing our exposure to claims if a customer makes a claim that we are not maintaining the system properly since we are getting a monthly income stream for those services? 
    With that said, do we now have to pay more to our insurance company to give us a broader coverage plan because of this extra responsibility were taking on?
    I think it's safe to say that whatever security services you provide increases your risk of being sued and being held accountable.  I hope you don't think that engaging in the alarm/fire/security/home automation business is "money for nothing".  It's not.  And you don't get your "chicks for free" either.  You need to be in a rock and roll band for all that.
    There is nothing wrong with accepting risks, as long as you manage them properly and take whatever action * you can to minimize and reduce the risk.  
* make sure you're properly licensed
* make sure you're properly trained
* make sure you provide adequate supervision of your personnel
* make sure you conduct yourself in a professional manner and insist that your staff do as well
* make sure you use properly drafted contracts that reduce your risk
* make sure you have adequate insurance to cover your mistakes
    I suppose you could limit your operation to installs only, but then you'd be leaving on the table all the RMR revenue, and equity.  Someone has to repair, monitor and inspect the systems after installation.  Since this alarm industry computes the value of an alarm company by applying a multiple to the Recurring Monthly Revenue under contract, you can quickly see the problem if you don't have RMR.
    Obviously if you contract to provide any of the RMR services you will be expected to comply with your contract terms.  The law permits you to exclude and limit liability for your performance, including your negligent performance, provided you word your contract properly.  Thus the contract will reduce or eliminate your exposure to paying out a loss.
    I notice you used the term "maintenance".  Dangerous word in the alarm , security and fire industry, in  my opinion.  Customarily alarm companies to not engage in maintenance, preventative or otherwise.  You should not be offering maintenance service unless you intend to provide it, and I doubt you do.  Servicing systems, repair service, is performed upon request, or after an inspection and approval by the subscriber.  If you want to offer maintenance then I suggest you have someone on site performing preventative maintenance on a regular basis; otherwise get the word maintenance out of your contract.  You won't find it in the Standard Form Agreements.  
    I am aware that NFPA calls for maintenance of fire alarms.  I think it means inspection and providing service at certain intervals.  That is not continuous maintenance.  Perhaps the fire experts will disagree, and they are welcome to chime in.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
516 747 6700