comments on water damage loss March 29, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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comments on water damage loss
March 29, 2017
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comments on water damage loss from March 10, 2017 article
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Ken,
    I get to wear two hats today In response to JC to his "water water damage loss" from March 10th, 2017.
    First my central station hat, JC is NOT reselling the central station service. The contract between the central station and JC is a subcontracting type of agreement. The agreement should say something to the effect that JC has selected the central station to provide the services. The alarm dealer is not an agent for the central station, rather JC is an agent for the subscriber or for JC himself. JC designs and structures the response protocols for the end-user and the central stations only ability to reject or override those protocols would be based on industry standards, local codes or AHJ directives. 
    The second hat is as a claims manager, there is an inescapable human element in the transaction of every signal and central stations work hard (or should) to minimize these errors but they occur in every profession where there is verbal communications. This is where the concept of gross negligence or willful or wanton comes into play. A properly crafted contract takes into account that humans will make innocent/unintentional errors from time to time. This is also why the contract creates the burden that the end-user is in the best position to contract for the proper amount of insurance to protect its interests. 
    JC sees the glass as half empty, most alarm companies do when they are faced with this dilemma. The larger picture is not to undermine the case law that protects the industry as a whole, but to work cooperatively to prove that there was no liability shift to the retail alarm contractor or subcontractor central station. This can be done with a skillful and knowledgeable industry attorney.
Bart A. Didden, Executive Claims Manager
Security America Risk Retention Group - SARRG
Security America Risk Purchasing Group LLC - SARPG
877-872-1266
bdidden@securityamericarrg.com
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Ken,
          JC made a valid comment about the length of time the water was running, and I got the impression he equated the amount of dollar loss to the run time of the water. 
          We have a hi rise commercial building that we service both the sprinkler alarm and sprinkler systems.  A couple years ago, late at night a tenant on an upper floor was doing a photo shoot, someone bumped a halogen lamp that fell over and ignited the back drop.  A few sprinklers fused and controlled or extinguished the fire.  FD responded and were on scene with in a few minutes, and shut off the sprinklers a few minutes later.  We replaced the sprinklers and restored the systems to normal operation.  Serve-Pro was called in and an army of clean up people arrived.  One of the first things they did was to cut and remove the lower portion of every wall that looked like it may have been wet to prevent mold.  The elevators were shut down because water went down the shafts.  The insurance company was on site that afternoon and said they were issuing an initial check for 1/4 of a million dollars to cover initial expenses and keep the work moving.  I heard the final loss was about 1 million dollars.  I don't think there would have been much more loss if the water ran for hours, it reached certain areas and ran down the stairs and elevator shafts to the basement floor drains. 
           An interesting out come was, when the first engine company arrived the connected to the Fire Department Connection and followed their SOP and boosted to 150 PSI.  This caused hole in the pipe where it passed through the foundation wall due to corrosion over the years.  NYC law states, that pipe must be pressure tested in the presence of an FDNY Inspector every five years, tested to 100 PSI.  See the problem.  I wrote to the FDNY and asked why we test to 100 when SOP is to pump to 150, we should be testing to at least 200, the answer, 100 PSI is law, 150 PSI is SOP.  To my knowledge, the law still states to test to 100.
Jeff
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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
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www.KirschenbaumEsq.com
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