KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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lost residential customer over residential fire alarm design - how it could have been handled to save the customer
April 10, 2026
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lost residential customer over residential fire alarm design - how it could have been handled to save the customer
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Ken,
We had a customer that has own a home and had our system in it for many years, which they rented out, and we then entered into an agreement to monitor it for the tenants. The tenants moved out, and the owner prepared to move in, and wanted the security system monitored but there were no phone lines, so she asked us to add a cell since her insurance company required a monitored system.
Easy, we created a monitoring agreement detailing the addition of a cellular radio, with a discounted price of $ 195.00, and a monitoring cost of $ 39 mo. The contract was signed 2/3, and we installed on 2/5. We invoiced on 2/10. On 3/3/26 customer informed us that her insurer 'Safeco' needed for her to have a Fire alarm before she could be insured. I explained that her system did not at this time have a Fire alarm.
I told her we needed to know what the insurer required before I could quote.
(Chubb for example has a specification when they do this) so we could make sure we were able to meet their requirements). Her agent emailed saying they don't have a 'specification', and that their underwriters told him, it was up to us to decide what to install, and then provide a written description of the system once completed, and they would be happy with that.
I explained to him in an email that they would have to create a specification to meet or we would not be comfortable providing a system, and copied that her also. She called and said that she needed the system and if we couldn't do it she would have to have another company do so. I said that I understood, and if she needed to change companies we would cooperate with her doing so. She then also stated she would want a refund for the cellular she had already purchased, even though we had already monitored it for 2 months.
If I had known about the Fire requirement at first, I would not have ever done the security until it was resolved. I also feel for her, because in CA and the Fires, many insurance companies are requiring the exact same thing. So I have decided to credit the monitoring (which she has not yet paid and just provide it for free)
I also have decided that I will refund her $ 195.00 for the cellular radio, and that it would be easier and less expensive to just let her keep the radio, than spend more money driving out to remove it. She has been a customer for a long time, and I just want to let it go.
It is easy to credit the invoices owed, and refund money paid, and cancel at the central station as per her request. My concerns and questions:
DO I need to remove the Radio to assure I have no warranty, or other liabilities going foward, or is it enough to just write her to let her know we are crediting, and refunding, cancelling, and leaving the radio (since would cost more to retrieve than it is worth.
OR -
Does the radio create a potential liability for me should it fail, or the new company not set it up correctly?
Would I still be responsible for warrantying it, even though she is refunded the cost of the radio and installation?
If I remove the radio, does it leave me with any responsibility for the operation of the system going forward.
SHOULD I have something she signs upon receipt of the refund to assure no future liability?
I want to be fair to her, but how do I do it clean? Didn't see a refund/liability release in your list of documents.
Thanks,
name withheld
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Response
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You are a Concierge Client and you should have availed yourself of the benefit of making a "quick call" to me for legal and perhaps practical advice. I think your situation could have been handled differently; you could have retained the customer.
You seem thrown by the addition of a residential fire alarm system. While it is true that fire alarm systems and monitoring does add another level of risk. you are protected if you use the Residential All in One and install a "proper system".
The customer asked for a fire alarm, for which the customer was apparently willing to pay for. I am not clear why you insisted on specifications from the customer's homeowner's insurance company, especially when they got back to you and advised they didn't have specifications and you were to use your own judgment.
I don't know if you are in a jurisdiction that requires residential fire alarms, requires application, plans and specifications, inspection and approval, like a commercial fire alarm. Chances are there is no such requirement. Codes for residential fire alarms generally apply to new construction and sometimes resales. The code requirement is, I believe [and the fire alarm experts should chime in here], start with NFPA 72 guidelines or standards, adopted by the state or local municipality. These guidelines, I believe, require smoke detectors [wired or battery] connected [or not] to the panel, in all bedrooms and perhaps other parts of the house. Sometimes heat detectors are used in parts of the house, like boiler room. It's your responsibility to know the residential building codes for fire [and other] alarm systems.
I think another issue that could have been handled differently is that you should have laid out the fire alarm specifications in your [updated] Residential All in One. That contract form does cover fire alarms and you would be indicating that the fire alarm system you are installing meets code requirements. That contract specifies the equipment and the pricing for installation and after-install services; anything else the customer or the customer's insurance carrier or the Fire Marshal decides is required or necessary must be added to the contract and paid for by the customer [unless you omitted code required equipment when you first designed the system - then it's your omission if you represented that the system would be to code]. You should have left it at that, in the lap of the customer. If it turned out the customer's carrier wanted more, and risk assessments performed by the carrier will often focus on fire, water flow [sometimes this is related to fire if there are sprinklers in the residence, as there are in some high priced homes], CO detection [likely included in NFPA specifications] or perhaps other environmental protective devices. You are not a mind reader and neither is your customer, but it's the customer who will be required to pay for the whims of the carrier or other AHJs.
With regard to your radio, unless you retained ownership, in which event it is yours and you can retrieve it, it belongs to the customer. You should have [and did because you use K&K Contracts] retain the right to disable the radio; you don't want signals continuing to be sent to your central station. The question is whether the radio is useful to the customer or another alarm company? If it is, and it's the customer's property, you just need to disable the signal, same for cellular device. There is no reason the alarm system cannot continue to operate for local signals, siren or bell, and you should not disable that. Under most situations any written communication between you and the customer will suffice to evince the finality of the relationship. Here you don't know of any loss that occurred while your system was active. It's doubtful a formal mutual release is necessary. However in view of how this was handled from the start you might be more comfortable executing a formal mutual release [drafted by a lawyer].
You followed best practices by using contracts for all your services, before they were performed. Next time in what clearly was a messy situation use your Concierge Program services for at least another take on the situation, if not sound legal advice.
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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
www.KirschenbaumEsq.com
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