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insurance for monitoring / comment on additional provisions / sample contract objections / Invitation to present webinar February 27, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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insurance for monitoring / comment on additional provisions / sample contract objections / Invitation to present webinar February 27, 2017
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Note on Webinars.  Our All You Need To Know About webinar series has been well received and well attended.  Thanks to those who have presented and we're looking forward to the scheduled webinars.  If you would like to present a webinar please let me know asap so we can schedule.  Your topic?  Fill in the blank"  All you need to know about ______ [alarm industry issue of course].  
Don't miss the next webinar by alarm expert Jeff Zwirn. 
Title: All You Need To Know About Fire Alarm Systems and Taking Over Fire Alarm Systems
When: March 1, 2017 noon EST
Presented by: Jeff Zwirn JeffZwirn@alarmexpert.com
Register here:   https://attendee.gotowebinar.com/register/4756737271107996417
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insurance for monitoring
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Ken
   We are moving insurance carriers this year as we are planning to being to offer Fire alarm install / test and inspection services.  Oddly, the insurance company we have identified to cover us for this work will not insure monitoring work.
   We are struggling to find an insurance carrier that will cover only monitoring – would you be aware of any – or could you point me to a source that may know -- thanks
DP
Colorado
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Response
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   I am at a loss for words.  What insurance company insuring the alarm industry for general liability with errors and omissions insurance doesn't want to cover "monitoring".  What insurance broker are you using?  Certainly not one found on The Alarm Exchange under the insurance broker category.  And I am trying to understand your problem?  You are going to stick with the carrier that won't insure monitoring and look for another carrier that will insure only monitoring?        Here's a thought.  Get a new broker from The Alarm Exchange.  Or, go down the list on The Alarm Exchange, starting with SARRG and then Costanza, general agent for Zurich.  Another good choice is Philadelphia Insurance.  Scottsdale is OK.  I'd stay clear of Hartford and First Mercury.
      Do not base your decision on pricing only unless you have a high tolerance for aggravation [if you get a claim].  
      Any brokers out there that would like to comment are more than welcome.
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comment on additional provisions for your self help
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Ken,
   In response to "additional provisions"(article on Feb 6, 2017), I would be very concerned about publishing or making available a "book" of alternative clauses to be used by anyone other than a licensed attorney who understands the alarm industry and the body of legal decisions that forms the basis of the industry standard contract(s).
   Granted it sounds like an interesting idea, have the availability to swap phrases that are unacceptable to the end user for phrases that use different words while accomplishing the same goal. My concern would be that the contract could get amended from the essential five phrases to five of the same phrase (worded differently) and become a contract that contains essentially no protection for the alarm company what so ever.
    Alarm companies should be cautioned that changes from the standard contract should be reviewed by either a competent industry attorney or more so, their insurance company.
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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Response
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   Good advice.  For those who missed the question [and too lazy to check the previous email article] I was asked if I could assemble a bunch of provisions that could be used to swap in or out of the Standard Form Contracts.  
   I have to admit that some alarm owners are quite diligent, knowledgeable and capable to review and modify the contract terms.  You know what?  Sometimes I can fix my alarm system - find the lose contact or failing battery; sometimes I diagnosis my own illness and decide what meds I should take.  Well that doesn't make me an alarm tech or a doctor.  Some say I have enough trouble being a lawyer. [stole your thunder].  
   Sure there are changes and modifications you can make to the contract, but the ones that really count when the dung hits the fan are "fine tuned" and changes best left to a lawyer [and definitely not just any lawyer].  Alarm owners have more to do than mess with contracts - spend your time selling jobs and building your company.
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sample contract objections
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Ken    
   We gave the All in One Commercial Agreement to a potential customer.  The system to be installed is a card access system and is an outright purchase.  There is recurring through a cloud service provided by third party vendor.  The client has read the agreement and as you will see below has many comments/objections.  Some of which are minor that we can work through with them, but a few I need your help on if we can work with him. They are questions below.  I have set forth the paragraph heading, followed by the subscriber's comment / objection.
name withheld

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1.  Page 3, Para 21, Indemnity:

    I can’t indemnify alarm co against their own obligations under the contract.  This was the hard one for your guys, I think.  I just reread it.  This is just so overly broad, that it’s unworkable.  Any suggestions?   
 
2.  Page 4, Para 22, Exculpatory Clause
    I get the point of this.  But alarm co can’t be non-liable for their own negligence.  I think I’d like to strike the second half of this paragraph starting with the word “regardless” on line 5 of the paragraph.
 
3.  Page 4, Para 23, Insurance
    If I own the equipment, why does alarm co require me to name it as an insured on my insurance policy?  I think you were OK striking this paragraph.

 
4.  Page 4, Para 26, Alarm co right to subcontract.
    Alarm co isn’t liable for their own subs’ negligence?  Surely that can’t be.  After all, I’m contracting you not your subs.  I recall this mainly applies to the third party vendor services.  I propose substituting that vendor or “Central Station” or similar wording in place of “third parties” in this paragraph.  That way you are out but I am still covered. The final full sentence of this paragraph is also just unworkable for me.  I’m trying to secure the building.  If at some point in the near future I decide to have central station monitoring, I cannot pay for that monitoring and have that party exempt from all liability.

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Response
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    These are the type of issues and provisions that you should not be re-drafting on your own.  Why?  These are the "protective" provisions.  I consider the protective provisions the most important provisions in the contract.  Not only will they come into play if you have a claim but these are the provisions that make your contracts acceptable to buyers; they create the value to your contract.
    Here is how I would respond to each of the 4 items above:
1.  Indemnity:  Subscriber indemnifying the alarm co is common.  It's important for a lot of reasons but it may be a provision I would give up if other provisions are maintained.
2.  Exculpatory Clause:  We are not striking the second part of this or any other paragraph.  This goes to the heart of the agreement.  There are ways to modify, but not decimate the provision.
3.  Insurance:  This is insurance procurement and there are good reasons to retain it in the contract.  But, if the subscriber leaves in Indemnity then I might agree to take out insurance procurement.  That may leave the subscriber indemnifying you without benefit of insurance coverage.  
4.  subcontract:  Your central station and third party vendors will insist on this.  Interestingly enough, you are not liable for your sub's negligence as matter of law.  You can be liable for negligently selecting that sub, but not for that sub's negligence.  Nevertheless we like the provision.
    The explanation why I would agree to modify a provision, or not, and how I'd modify it is well beyond the scope of this article and a lot more information than you need to properly own and operate your business.  This is stuff you need a lawyer to handle.  Know one?
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WEBINARS:  Sign up for any or all of the webinars that interest you.

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FREE Webinar Series "All You Need To Know About" alarm industry issues. 
Register for one or all.  Each presentation scheduled for half hour to hour.  Not recorded.

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Title: All You Need To Know About Fire Alarm Systems and Taking Over Fire Alarm Systems
When: March 1, 2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: General discussion about issues to consider when installing, servicing or inspecting fire alarm and when taking over an existing system
Who should attend: Alarm company owners, general managers, sales managers, technician managers
Presented by: Jeff Zwirn JeffZwirn@alarmexpert.com
Register here:   https://attendee.gotowebinar.com/register/4756737271107996417
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Title: All You Need To Know About Standard Fire Protection All in One Agreement Covering Installation, Inspection, Service of Sprinkler System, Portable Extinguishers, Kitchen Hood, Smoke Detectors, Fire Pump
When: March 2, 2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: General discussion about the Standard Fire Protection All in One provisions including scope of work, liability limitations, insurance issues, indemnity issues, how to handle subscribers who won't sign or want you to sign their agreement. 
Who should attend: Alarm company owners, general managers, sales managers, sales staff
Presented by: Ken Kirschenbaum, Esq.
Register here:   https://attendee.gotowebinar.com/register/658147149875346945
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Title: All You Need To Know About Alarm Licensing and Contracts for DIY 
When: March 9, 2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: General discussion about licensing in the alarm industry for DYI. Different types of licenses, where you need them and how you get them. How and when to use License Holders or Qualifiers for your business and how to become a license holder for a company. Risks involved in not being licensed. Contract you will need for nationwide DIY monitoring agreements.
Who should attend: Alarm company owners, general managers, compliance managers and license holders.
Presented by: Ken Kirschenbaum, Esq.
Register here:   https://attendee.gotowebinar.com/register/2585168820901654273

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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
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com
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