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Licensing For DIY Nationwide Monitoring /Central Station Contract Protection Question - November 18, 2016


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LICENSING FOR DIY NATIONWIDE MONITORING
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Ken
    As part of our ongoing effort to make sure DIY companies are licensed I would like to verify the states that require licensure of some types.  If you could let me know what I am missing or don’t need it would be helpful.  We know that there are both state and local municipal licenses.  The local licenses I know about are Denver CO,  Phoenix AZ,  Louisville KY and Las Vegas NV
Morgan Hertel | VP of Technology and Innovation
Rapid Response Monitoring
mhertel@rrms.com
TEL:877.553.4531 
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RESPONSE
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    Dealers should know that one of the benefits of dealing with a professional central station is the assistance that central station provides.  Rapid Response is great example.
    If you're thinking about selling DIY products nationwide and entering into monitoring agreements with the subscribers you will need an alarm license in the states listed here: https://www.kirschenbaumesq.com/page/alarm-law-issues
    You may need local municipality licenses or registration as well.  Our Licensing Department can assist you getting licensed.  Contact Jennifer Kirschenbaum, Esq. at 516 747 6700 x 302.  You will also need a nationwide contract.  Contact our Contract Administrator Eileen Wagda at 516 747 6700 x 312 for that contract.
    You may want to sign on with one or more dealer programs that offer the DIY model.  You can find a few on The Alarm Exchange [see Dragonfly].  I expect others to list soon.
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CENTRAL STATION CONTRACT PROTECTION QUESTION
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Ken,
    We  provide monitoring service to other alarm dealers.  We have an opportunity to sign up a new wholesale dealer who has a few thousand accounts. We will be using your most recent Dealer Agreement. The Dealer does not believe, nor do we, it possible to have their existing customers sign your three party monitoring agreement.  All future monitoring customers will.
    My question; does your Dealer Agreement sufficiently protect us from potential liability created from monitoring the initial customers assuming the Dealer complies with all provisions of the Dealer Agreement?
name withheld
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RESPONSE
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    Every cs requires its dealers to sign a written contract.  Every one of these agreements contain an indemnity provision.  I point that out because when I describe the Standard Dealer Agreement [which this cs asks about] I don't want dealers to think it's something unique in that agreement.
    The Standard Dealer Agreement is however unique because it differs from other agreements used by central stations because of its transparency regarding terms of the deal.  There are lots of issues that a dealer may not consider when signing up with a cs.  This Dealer Agreement has a check list on the front of the agreement that makes these essential terms clear.  It's still up to you whether you agree to each provision.
    The Standard Dealer Agreement contains an indemnity provision that requires the dealer to indemnify the cs.  There is also an insurance procurement provision which requires the dealer to name the cs on its E&O insurance policy.  This is actually a protection for both dealer and cs.  Indemnity should be backed up with insurance; otherwise we don't know how deep the pocket is.  Smart dealers will limit the indemnity to the insurance coverage, something the cs should accept.
    So with indemnity backed by insurance in place the cs will be protected when it monitors the existing subscribers who don't have a direct contract with the cs.
    The dealer may have a proper contract with the subscribers - the Standard All in One Agreement, in which case the cs doesn't need a 3 Party Contract signed.  The Standard All in One agreements adequately protect, contractually, the dealer and the central station. So the cs should insist that the dealer use the Standard All in One Agreements.  
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