Question and comment
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Ken,
Isn't this something that the alarm company should run by thier insurance
company? Sounds like the subscriber may be letting their insurance company off the hook.
I don't think we as a company would go along with that unless I had in writing
from my insurance company that they are in agreement. Also, what he said was
that the client would be 80% responsible, not alarm company. Who knows, maybe
their insurance company will go along with their 20%. It limits their
liability and in my experience whether the alarm company is at fault or not,
by the time this gets to settlement, there will be some percentage that the
insurance company will accept to settle since they are paying legal fees to
defend.
Robert Aiello, VP
High Rise Fire and Security
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Answer:
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You can't accept any percentage of liability because you open yourself up to unknown exposure. Also, it is not likely that your Errors and Omissions insurance policy covers contractual indemnity. That means that if you, by contract, agree to indemnify the subscriber you are on your own; no insurance coverage. So if you do agree to indemnify then make sure you get contractual indemnity coverage by special endorsement.
It is not likely that your insurance company is going to agree to be responsible for 20%, or any other percentage.
Sadly, your last comment is on the money. Some insurance companies are settling cases that they shouldn't and it's going to ultimately hurt the alarm industry. The name of the game is hire the cheapest attorneys you can find, no matter their experience or effectiveness, and instead of considering what might be better for the alarm industry in the long run, figure the cheapest way out of the case.
One of the better features of SARRG is that it is run by an alarm guy and has a defense philosophy much different [and much better for the alarm industry] then the other carriers. Perhaps I am out of touch with present day reality, but early in my law practice career I represented insurance carriers who knew the importance of protecting the alarm industry laws. I was assigned cases and given free rein to defend the case until the alarm company won, totally or for next to nothing. Not today, except for SARRG.
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Comments
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Ken---
More on CG--General Contractors “Vendor Packets” ----- the alarm dealers requirement to sign the CG agreements ( –not using alarm contracts---) which opens the door to the OCIP--Owners Contractors Insurance Program which leads to constructions defects, and NO E&O coverage for the Alarm Dealer. The CG Package also can require Performance Bonds which make the overall project more costly.
I recommend that the alarm dealer extends their Alarm GL E&O Insurance policy over all OCIP projects and not excluded any job. Next make sure your worker Comp. coverage also picks up all the payroll for OCIP jobs. Then have your Insurance Agent / Broker issues a certificate to the CG and not buy into the OICP Insurance Program. “You” are then covered and can provide Proof of Insurance to the CG ---meeting the Insurance requirements under the “Vendor Packets”.
Ken this has been a big Issue Nationwide---Coast to Coast--- I will be happy to provide Insurance guidelines on this subject to Insured or Broker on this issue.
Michael J Kelly
Michael J Kelly Insurance Agency
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Ken,
Your forum on Vendor Packages is something that is becoming more and more prevalent in recent years with legal indemnification covering all aspects. One of your esteemed colleagues specializing in construction law followed one iof your seminars in Long Island with a session on Vendor's leaning projects. Public and some private projects require the general contractor and the subcontractors to put up bid bond guaranteeing completion or if the contractor goes bankrupt to pay for a replacement to finish the job.
Vendors have a right to lean on the property for goods supplied in a lesser degree and labor in a higher degree.
You will need legal council on this.
When Vendor terms such as those presented in the forum are given to some astute contractors I know , they return the paperwork with a lien on the property which cannot be released until the supplier / Vendor is paid in full when the project is completed . Without a release of the lien , the property cannot be turned over by the general contractor to the owner.
General contractors will scream at preliminary liens and the answer is " Your terms and conditions of your contract are excessive but are intended to protect your interests, we intend to protect ours and will have the first lien filled on the property for resolution if there is a payment problem.. (The IRS and Banks take a higher priority in court.)
If you want the job badly enough have the "Notice of Lien" come in several days after you have signed their contract and been awarded the project as a surprise to the general..
Blair Ames
Montgomery-Ames
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Comment
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Ken
Rich R. just lost all bargaining power when he went ahead and took over the account when their previous company shut them off.
You also exposed your company to significant liability for the time that you provided service without a contract. We’ve had this exact situation happen several times before. The (potential) client is begging you to help them (and you want to because they have 9 locations). You’re response is this: “You are asking me to put at risk my company, its employees and their families. I can’t and I won’t.” The company then signs your contract or makes the decision to operate without alarm services. The latter might which place them in violation of their insurance requirements or place at risk a large, multi-million dollar facility. They’ll sign. Now, though, you’ve given them a lot of negotiation power and exposed your entire operation.
David Myers
Myers Protection Services
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Comment
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Ken,
I truly enjoy your e-mail forum, as it solidifies my confidence that we all have the same issues with our clients.
At least once weekly, I have to take time to explain to a client why our contract (purchased through your service) reads the way it does. Most times I succeed and they return the contract signed etc. Other times, I have to let a job pass because one of my local competitors doesn’t even ask for a signed contract. Their answer to me about this during an exchange was that “they provide superior service and see no need to lock their customers in”.
One item of particular concern to many clients seems to be the Limitation of Liability paragraph with a set limit of $500.00. Relative to yesterday and today’s topic, is it possible for you to post “Talking Points” for your contract paying clients? It would provide a way for “us” to talk about the contracts in a structured manner. Beyond that, I try to amass information through your forum, my insurance company (Alarm Insurance Agency Rick Janis) and some trade magazines.
Thank you for your time and the e-mail postings.
Regards,
David W. Wilson
Litchfield CT
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Response:
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Your broker, Rick Janis, knows his business - he should contribute to this forum - we would all learn a lot.
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