Ken:

Could you touch on Indemnification? I recently had a long time customer ask us to indemnify them for a minor service call, and after reading their form, found that they wanted the indemnification to last “forever”.

If necessary, can both indemnification and additional insured (which you filled us in on last week) be limited to only during the construction phase of a job?

My concern is that we’ll agree to indemnify, or additional insure someone, and five years later, we’ll still be on the hook for these people, with the only service being provided to them is alarm monitoring for $ 50 a month.

Thanks again

Mike Miller

*****************

Answer:

You should be concerned about giving an indemnity to your subscriber.

Unless you have Contractual Indemnity Insurance or endorsement on your E&) policy you are not going to be covered for your indemnity. So check that first.

Assuming you have insurance then you need to make a business decision: do you have enough insurance to likely protect you? A multi million dollar unbrella should be sufficient for mos situations.

I want to post below several other comments on other issues that are of interest here.

**********************

Ken

I am currently being asked to sign an agreement with my largest customer's property management company that would not only cover them as an additional insured, but in the language they are refusing to change, the loss will not be limited to the amount of my insurance policy. They will have two million in coverage and then they can come after the company and potentially myself if the corporate veil is pierced. I have offered to get them more insurance that they would have to pay for, but their attorney is not willing to limit our exposure. I do not want to say no, but I feel I have no choice at this point. Any advice from anyone?

Tom

AT Systems

*******************

Again, you have to make a business decision whether you have enough coverage to take the chance. Some will say don't take any chance, but let's face it, you take a chance on every job. You need to read the indemnity provision very carefully and determine just what it covers before you can decide whether to sign it. Not every indemnity provision is the same.

****************

Ken,

Once again, thank you for all the information. It is my understanding that anyone is allowed to pay my bills without accepting liability for the bills. If this is true, then I do not understand why an alarm company would pick up any liability to a third party, just because they paid the fees for my original client. Am I wrong?

Tom Donaldson

A T Systems, Inc.

***********************

The point is that if you accept a check from a third party you are on notice that you are or could be providing service to someone without a contract.

Dear Ken,

Sorry, I'm a bit behind on my e-mail reading. I was just going over the comments on the UL listing and the comments that Joe Pfefer made. His comments were spot on as far as the equipment and the fact that the company doing a UL installation must be UL listed as an installing company as well, UNLESS the business owner contracts through a UL listed monitoring company.

At this point ONLY the MONITORING company can if they choose subcontract the installation of the job to a non-listed alarm installation company. I know of several instances where this is done. Either way, I totally agree with Joe, NFPA Is "THE CODE" and not following "THE CODE" is a sure way to get yourself and your company in trouble, as well as likely in jail somewhere. You can't afford to NOT know the code, and if the customer doesn't want to pay for a "proper system", they should re-look their financial situation. No customer is worth the value of MY BUSINESS to me, and that's what is at risk.

Dave Watkins