QUESTION:
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Hello Ken:
I enjoy reading your newsletter and I know that we have spoken once or twice before and I was wondering if you can comment on these two issues.
Lets assume you sell a security system and the home is two floors and a basement and you include one monitored smoke detector which is placed in the second floor sleeping area. A fire breaks out in the basement and not detected timely by the second floor detector. Can the alarm company be held liable for selling fire protection that was limited and will the limitations of liability fail.
The second question is the same. Many companies offer packages that only contain 2 door sensors but the homeowner has 3 or 4. Those doors are left unprotected and the alarm company advises the homeowner that the motion sensor will serve to cover those other doors and does not protect them.
Although we have no obligation to follow UL guidelines, it is a reasonable standard that says all doors should be protected to achieve minimal protection. Can the company be held liable for failure to provide adequate protection.
Thanks
Brett Blessen
Security Solutions,Inc
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ANSWER:
Be very careful about how you describe your alarm system to the subscriber. Residential systems rarely have properly installed fire alarm systems, primarily because residential fire alarms are not permitted, inspected or approved by the AHJ, and residential subscribers don't want to pay for a real fire alarm system. By real fire alarm system I am referring to the minimum requirements set by NFPA for residential installations. You need to be careful to advise the subscriber that adding a smoke detector to an intrusion system doesn't make it a fire alarm. This must also be contained in the contract. You don't want to describe the system as Burglar and Fire alarm in the contract since that's not really what it is. You most likely installed an intrusion system and added a few fire device detectors.
Same analysis and caution goes for installing an intrusion system that does not cover all protected areas. There is probably no code requirements for the system but at the very least there is going to be "custom and practice" guidelines. If for example your subscriber doesn't want to pay to install intrusion protection in an upstairs then the contract should mention that deficiency. You should not rely on the catch all provision that you have "offered more and additional equipment and services that the subscriber has declined". You should also be using the Disclaimer Notice and you should hand write on that form the protection that your subscriber is not getting, especially if that protection would ordinarily be included in a properly designed and installed system.
My Standard Sales Contract contains a specific disclaimer regarding a fire alarm; I suggest you get that contract and use it.
If your subscriber suffers a loss, burglary or fire, and there is a deficiency in the system [especially if that deficiency is found to be the cause of no alarm signal or detection] you are going to be sued and it will be an uphill battle to enforce the protective provisions in the contract, including the limitation of liability clause. If the defense of that case is not handled properly [more on that in another article] you are going to face protracted litigation, E&O premium increases and possible non renewal of your E&O policy.
If you think any car dealer is going to sell you a new car with only half the breaks I don't think you'll find one. Think about that next time your subscriber wants to reduce the price by foregoing protection.