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more on workers comp for subcontractors / additional insured request / more on capital improvement - fire alarm
April 4, 2017
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TitleAll You Need To Know About Getting Top Dollar for your  Alarm Business -sale or financing
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more on workers comp for subcontractors from March 28, 2017 article 
    WC laws vary from state to state, and those state laws change somewhat frequently, so the alarm company should consult their broker on the WC requirements wherever they’re at.  
    Here in California, companies are exempt from the law requiring work comp ONLY if they have no employees, and contractor’s license holders can file an exception with the CSLB stating that they have no employees, and then that statement becomes part of their public record visible on the CSLB website, but there’s no such similar public record for ACO license holders. 
    The advice I give if an alarm company wants to hire a small subcontractor that truly is independent, then that sub definitely needs to carry its own liability insurance (and name the alarm company as Additional Insured), AND they should carry workers comp, BUT if they state they have no employees then the alarm company could make a business decision to exempt them from carrying workers comp, but the alarm company should keep a closer watch on the job and make sure they don’t see additional persons working with or for that sub since that would expose the alarm company to all those additional uninsured risks mentioned below.
    Regarding your question on March 28, 2017 on whether to cover a 1-man sub on your own workers comp:
I reviewed a related case study on a small business that was covered for liability, but turned down their broker’s offer for workers comp on their few employees because both the business and the employees believed they were really independent contractors, the business liked not paying any payroll taxes and the independent contractors agreed because they liked not having those taxes withheld from their checks.  Then one of those independent contractors got hurt while working for the business (hand laceration, $25k+ in medical bills) and decided to file a claim as a third party against the business’s liability insurance since he felt the injury was due to the business being negligent in maintaining a safe premises.   The liability carrier investigated and found that this “independent contractor” was actually a defacto employee due to not meeting the test of true independence (using the IRS’ 21-point standard) and was therefore entitled to workers comp, so the liability insurer declined the claim and invited the claimant to turn it into workers comp… which they didn’t have.  The injured “employee”, facing the burden of unpaid medical bills, then changed his tune and sued the business AND filed for unemployment with the state, which caused the state to investigate and fine the business thousands for failure to carry workers comp.
    Granted, this one was one of those “perfect storm” scenarios, but we see them in insurance publications pretty frequently now.  So the moral of the story is: carry workers comp, even if you pay for your labor under a mutually agreed-upon 1099 arrangement, because you never know how that sub’s position will change when they get hurt.
Larry St John, CIC
Eclipse Marketing & Insurance Services
707.469.6776 x102
    Be prudent.  If your one man subcontractor doesn't carry workers comp then cover him on your policy.  If you subcontractor has employees make sure all of them are on the subcontractor's WC policy.  Get named as an additional insured if possible.  
additional insured request
     I’m dealing with a prospective subscriber who informed me that their insurance agent said “ there is not really a way to add the contractor to your insurance policy as an additional insured”. 
    This is the second person to tell me that. Then I got a separate email from this person requesting that I add him and his wife to my policy as an additional insured during the time of work that we’ll be doing.
    I’m not sure how to respond.
    The Standard Form Agreements require the subscriber to obtain insurance and name the alarm company as an additional insured.  It can be done and it should be done.  The Standard Form Agreements also require the subscriber to indemnify the alarm company.  Sometimes subscribers leave in the indemnity and insist on taking out the additional insured provision.  This of course is a mistake because now the subscriber has an uninsured risk, the indemnity duty.  
    The insurance agent mentioned above was either lying, lazy or both.  
    Your subscriber's request that you name them as an additional insured is of course contrary to the terms of the Standard Form Agreement.  Though some subscribers do have the bargaining strength to demand and get indemnity and insurance coverage from you, a typical home owner subscriber would not have a contract worth that risk.  
more on capital improvement - fire alarm
    In regards to a fire alarm system, would that installation be considered a capital improvement. 
    A fire alarm could be considered a capital improvement, especially if the fire alarm monitors water flow devices installed within pipes.  However even the Commercial Fire All in One specifies that the fire alarm is to remain personalty; it's not to be considered an improvement to real property.  Most alarm components, fire or other systems, are removable.  They screw to the wall or ceiling and can be removed.  Wiring of course would be more difficult to remove but could be removed without damaging a building.  For the same reasons a security system is considered not to be a capital improvement the fire alarm is treated the same way.

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TitleAll You Need To Know About Getting Top Dollar for your  Alarm Business -sale or financing
When: April 11, 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 how to maximize the value of your alarm business and position yourself for sale or financing
Who should attend: Alarm company owners.
Presented by: Rory Russell, Acquisition Funding Services, 888 551 0476
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TitleAll You Need To Know About Alarm dealer program contracts - getting in and getting out
When: April 18, 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 honeypots/trappings of dealer program contracts and how difficult they are to get out of. 
Who should attend: Alarm company owners.
Presented by: James Babbitt, Esq. General Counsel, RMR Capital Group; 952 467 8610
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TitleAll You Need to know about Internet security and why is it relevant for the alarm industry 
When: April 25,  2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: Discussion of securing Internet devices.  Attacks by Mirai and other botnets and disruption to Internet services around the world made possible because of the millions of poorly secured cameras, DVRs and other installed network devices. 
Who should attend: Alarm company owners, general and technical managers
Presented by: Securifi, a leading router and smart home hub company, soon to be offering its own comprehensive Total Security Solution (Monitored Security + IoT Security + Parental Controls + Malware Blocking) to the alarm industry.  Rohit Somani    855 969 7328  
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
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