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no permit, no police response - is alarm co liable
September 11, 2017
no permit, no police response - is alarm co liable
    I have a liability question regarding customer alarm permits. 
    Consider the following hypothetical scenario; customer lives in a jurisdiction that requires them to obtain a permit to own/operate an alarm system. They are unaware of the requirement and the alarm company doesn’t tell them about the requirement so the customer does not obtain the permit. Bad guy breaks in and vandalizes the home. The alarm company attempts to dispatch on an alarm but law enforcement refuses due to no permit. Would the alarm company be liable for any damages if they did not notify the customer that there was a permit requirement in their local jurisdiction?
Chris Hesher, Response Center Manager
Federal Protection Inc
    This is a great question, and tough one to answer.  I'm hedging because I'm not sure.  Many jurisdictions require permits and many require the "contractor" [that would be you, the alarm company installing the system - but not usually the central station] to "obtain" the permit or at least notify the end user that a permit is required.  The Standard Form Residential All in One provides that the alarm company will obtain all permits if required by law, at subscriber's expense. Failure to get the permit or notify the subscriber that a permit is required is a breach of the contract.  
    There are many protective provisions in the Residential All in One to insulate the alarm company from liability.  But, and here is why I am hedging, if the loss is serious enough, horrendous, heinous, tragic, perhaps personal injury, evidence of torture, death, not just loss of the TVs and jewelry, that would be a challenging case.  Yes, the contract should be enforced, but hard facts make for bad law.  
    The scenario needs more facts.
  • does the law requiring permits impose penalties on the contractor for non-compliance
  • did the contractor neglect just this subscriber or does the contractor routine ignore the permit law
    This might be a good time to consider the central station you use.  The central station should know about permit requirements in the jurisdiction.  Why?  Because when they call in alarms the operators are probably asked for the permit number.  Isn't that what the cops claim helps expedite the response, tying in the permit with the alarm location and site information?  Because if it's really just a revenue raising issue with no purpose related to response, then shame on that municipality.  So lets stick with the high road and imagine that the permit serves a legitimate purpose.
    So now you have the alarm installer ignoring the permit law, the central station ignoring it and of course the subscriber, who the courts will excuse because the law requires the alarm company contractor to let the subscriber know about the permit, and maybe get it for the subscriber. 
    If the loss is purely economic, and the failure to get the permit limited to that subscriber, I'm relatively comfortable that the Residential All in One will hold up to protect the alarm installer and the central station.  But, I'd recommend being careful regarding permits.  Keep in mind that the failure to get a permit is not likely to be a single event.  By that I mean that the signal ignored by the police is not likely to be the very first signal for that location.  You will have test signals and who knows how many false alarms before the big event.  If the central station and installer were warned by the police on prior calls then that makes it worse for contract enforcement.  If you're lucky enough for it to be the very first alarm, well then the contract has plenty of protection in it and should be enforced.
    Obviously the same logic applies to fire alarms.  But take a place like NYC where you are required to get a "terminal number" from the NYC FD.  It's the central station that should know about the terminal number and if doesn't have one for the location then why is it monitoring that account? I suspect there are lots of commercial fire alarms being monitored in NYC that don't have terminal numbers because the systems were not installed pursuant to filed plans or being monitored by the very few central stations that are NYC FD certified to monitor fire alarms in NYC [that certainly applies to residential alarm systems, which the NYC FD official does not recognize]. 
    Bottom line.  It's both the installer and central station's obligation to know if permits are required.  Both should ensure that subscribers are advised of permit requirements and if the law requires it, the installer needs to obtain the permits.  Central stations, I recommend you reject an account if a required permit is not obtained, and that you toss an installer that routine ignores the permit law [because who knows what else that installer is ignoring]. 
    OK, I won't end a such a negative note.  The Standard Form Agreements specifically cover breach of contract, failure to perform and negligent performance, and exculpate and alternatively limits liability; it shifts allocation of risk by insurance requirements to the subscriber and it calls for indemnity.  So, theoretically, you should be protected contractually.  You should also be covered by your E&O carrier.  Even so, get the permits and do everything else you're supposed to do.


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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
516 747 6700