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More on industry contracts - indemnity from January 15, 2014 article

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Ken,

    Interesting example and answer but not nearly complete. You discuss services, but what about products?  Every installer/purchaser accepts the manufacturer warranty, limitation of liability and incredibly broad disclaimer just by purchasing the product.

    Now to be fair, this standardized method is not limited to products for alarm companies, rather I can't think of a product that does not have such provisions that are some sort of variation all for the same desired result.  

Bart Didden

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Response

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    Manufacturers sell their products subject to Limited Warranties which do their best to limit liability and repair exposure.  Most states and as well federal laws address manufacturer's warranties and provide certain rights and remedies dispite written warranties.

    Dealers have choices when selecting vendors and those that provide services and equipment to alarm dealers.  You are the consumer and you can go elsewhere if you are not satisfied or comfortable with demands of these vendors.  Just today I had to address a non negotiable demand by Alarm.com that its "terms" be added to dealer's contracts with subscribers.  I am going to devote a separate article on those demands.  All I have to ask at this point is, can't dealers find another vendor besides Alarm.com, one that may be more cooperative when it comes to contracts and what might be appropriate for the dealer and even Alarm.com. I haven't had the same issues with alarmnet from Honeywell or connect 24.  

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subcontractors

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Ken

    I  am using 2 subcontractors on a job and want to protect myself in case they get hurt, etc. and I want to make it clear that they are not employees. Do you  have an agreement that covers this? Im in NJ and use all your  contracts.

Thanks

JP

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Response

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    You can use our Standard Subcontract form.  Although that agreement will state that your relationship is independent contractor, that will not work if it's not the reality of the relationship.  We can call an apple an orange in the contract but it's not likely to end up tasting like an orange.  You specifically mention the worker getting "hurt" and then "etc".  The "etc" can include unemployment insurance; prevailing wages; benefits you offer your "real" employees; withholding tax contributions; probably a few things I missed.  

    What really defines if you have a subcontractor is your control over this subcontractor, and lots of other factors I have addressed many times.  One rule of thumb, though perhaps overly prudent, should be to require every subcontractor to carry and produce its own workers compensation and disability insurance policy, yes, even if it's a one man operation who may not be required to carry that insurance.  If you require the sub to carry the insurance you will not get stuck with added premium if you get audited on your policies.

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more on indemnity

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Ken

    Some of us here at Security America have a different view on the comment you circulated about the indemnity provision.  Alice said, "sole negligence as this will void the contractual liability on many industry policies".

    We don't necessarily agree with the exact way she wrote that.  The insurance contract and the contract with the indemnification are separate contracts.  Nothing written in the indemnification can "void" an insurance policy.  Instead, the way we would comment on this issue is that "the insurance company's policy likely contains contractual liability coverage that only applies when liability exists in tort.      Sole negligence on part of the subscriber may not create tort liability on the part of the insured contractor, so no contractual liability coverage would be triggered.

Bart A. Didden, Executive Claims Manager

Security America Risk Retention Group - SARRG

877-872-1266

bdidden@securityamericarrg.com

www.securityamericarrg.com

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Response

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    Huh?  I think this is what you both are trying to say.  It's not likely that any contract an alarm dealer enters into will "void" the dealer's insurance policy.  Rather, a dealer may enter into contracts that raise liability exposure that is not covered by the dealer's insurnace policy, leaving the dealer on its own to perform on the contract it entered into, such as to provide indemnity.  Also, though most general liability policies will cover contractual indemnity, the policy will not cover the sole negligence of the indemnitee.  So if your cental station is found to be solely negilgent, your agreement to indemnify them will not be covered by your insurance carrier.  Be careful what contracts you agree to and sign, and be careful how you select your insurance.  SARRG is a good choice because it's owned by the alarm industry and they understand what you do, how you do it and what you have to agree to getting it done.

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TO SUBMIT QUESTIONS OR COMMENTS REPLY TO THIS EMAIL OR EMAIL Ken@Kirschenbaumesq.com.  Most comments and questions get circulated.

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WEBINARS

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Topic:  Integrating Quick Books with alarm company management software and credit card processing for RMR.  You will learn how to inexpensively automate and streamline your alarm business management using sofrware designed to work with Quick Books.  Hands on tutorial will demonstate how easy and useful this software can be.

 

When:  February 13, 2014 at 12 noon to 1 PM EST.

Register here:  https://attendee.gotowebinar.com/register/3856781481977174786

 

Moderator:  Ken Kirschenbaum

Panelists:  Mitch Reitman www.sicc.us;   Scott Taylor www.FI-Soft.com; Thomas Aronica  www.skybankfinancial.com

Who are the panelists:

    Scott Taylor, with Fi-Soft and manages the firms product development and partner relations activities..  Fi-Soft specializes in QuickBooks accounting software, training, and integrated solutions.  As a founding member of the Intuit Reseller Channel, Fi-Soft supports all versions of QuickBooks software and carries the highest level certifications from Intuit.  

    Mitch Reitman is a tax expert specializing in the alarm industry.  Besides accounting and tax work, he is an active and effective business consultant and alarm business broker.

    Thomas Aronica with SkyFinancial has a focus on credit card processing for the alarm industry including RMR processing, and integrates and works with Fi-Soft's Quick Books. 

Who should attend:  alarm company owners, office managers and those involved in alarm company nabagment, accounting and accounting records.  

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