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Credit Card Changed - Do You Need New Contract / Comments On Contracts And Dennis Stern - January 16, 2017


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CREDIT CARD CHANGED - DO YOU NEED NEW CONTRACT
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Ken
    I have a customer that has had their CC compromised and cancelled it.  They have given us the new card information. Since it is different than the one on the contract is there a need to document the card change on the contract? Is there an addendum or form? Do I do nothing at all?
name withheld
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RESPONSE
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    You don't need a new contract but you do need a new credit card authorization, in writing.
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COMMENTS ON CONTRACTS AND DENNIS STERN FROM JANUARY 2, 2017 ARTICLE
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Ken
    It's always nice to hear from Dennis Stern [Jan 2, 2017] and generally his prospective is as strong as armor plating.    However this time I think he underplayed the severity of the issue of not having proper contracts for ALL work, not just fire. I agree that other than the Eli Lily burglary loss, a Burglary has the lowest risk without contributing factors. However if he looked at the defense costs that I showed, he should have realized that even a small one man shop, even as an LLC or other operating entity (other than his/her name or personal partnership) that does not do fire work still has extreme risk by operating with two items, the proper contract for the services being preformed and insurance. 
    The water sensor loss I described had no contract and would have bankrupted any burglar alarm company without insurance and 5 employees or less. Even a company with more than 5 employees would be damaged but might have the ability to survive by borrowing the 35K it took to settle. I have come to the opinion that water damage is second only to fire damage. I have settled a water damage claim for 50K when an employee thought the correct riser valve was closed with the assistance of the building superintendent. Why 50K? The building was vacant (tenant furnishings would have only made the amount worse) and a contract were by the end-user crossed out all of the protective provisions we would rely on. Increasing the limitation is a business discussion that must take place with the company management/ownership - the company accountant and of course the company attorney (who understands the contract and risks) or a professional industry attorney such as KK, Dennis Stern or a handful of recognized others. If you don't know one or want to call KK, turn to your local alarm association for a referral.
    ADDING TO JOEL KENT'S COMMENTARY OF JANUARY 2, 2017.
    I would love to know if the high number of false alarms generated are from DYI and / or the numerous free system providers. A lot of money has been poured into this industry from outside, anticipating a high ROI.
    Now more than ever, being driven by the bottom line. It's not the same industry it was even five years ago.  These companies allocate a fixed amount of time for a sale, install time not to exceed and don't bother us with service or billing problems.  I don't want to live in the past but, last year about 15 % of our business was generated by takeovers. Systems installed by other companies that simply didn't work as expected.  
    It is not that uncommon to find fire detection installed on ceilings that were never wired. I don't care what kind of contract you have, it won't be your get out of jail card, if someone dies.  In most cases the equipment encountered was the bottom of the line and even when installed by a licensed person, there were visible shortcuts contributing to operational problems.
    Keep up the good (bad) work guys........It only adds to my bottom line.
    Even closer to my world, Dennis touched on the "additional Named Insured". First and foremost your carrier should only issue these with the proper included language that Dennis touched on, but I don't completely agree when Dennis limited the reference to a particular "security services agreement dated______  and", I don't like that inclusion because while giving focus it also limits the broader potential of the statement when the claims manager wants that broad potential to apply the rest of the statement, which is that the additional insured endorsement "applies only to the Provider's acts while on the premises".
    I want to thank Dennis publicly in advance because two weeks ago he offered to buy me lunch, since we will live 20 minutes apart we regularly get together. Can't wait for this conversation to continue in person.
Bart A. Didden, Executive Claims Manager
Security America Risk Retention Group - SARRG
877-872-1266
bdidden@securityamericarrg.com 
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