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Old Monitoring Center terminates service / Insurance procurement clause question
December 5,  2019
Old Monitoring Center terminates service
            I recently moved my account base of around 240 accounts from one Monitoring Center to another.  Around 70 of the accounts are Telguard Radios which were being billed to me (as a Telguard Dealer) through the Monitoring Center.  Although the accounts had all been reporting to the new Monitoring Center, Telguard had not transferred billing responsibility to the new Monitoring Center.
            Without notice of any kind the old Monitoring Center began taking the Telguard units, which included commercial fire systems, out of service.
            Is that even legal?   What right does the old Monitoring Center have to deactivate cellular radios without any kind of notification to me simply because they had received a bill from Telguard?  It was obvious the Telguard accounts were not reporting to the old Monitoring Center.
            Thank you for your time.
Name withheld
            Your relationship with the old Monitoring Center, and in fact any monitoring center, is complicated.  The complexity depends on the Dealer Agreement you signed with the Monitoring Center.  The Dealer Agreement defines the rights and obligations of both the dealer [that’s you] and the central station.  
            Every Dealer Agreement has one provision in common:  it requires the dealer to pay the central station for its monitoring services.  But what happens when the dealer fails to make payment is addressed differently in Dealer Agreements.  You need to read the fine print.  Some Monitoring Centers are permitted to contact and deal with the subscribers directly; others are not permitted to communicate with the subscribers even if the dealer defaults in payment and monitoring is to be or is terminated.
            Though not as certain as the payment requirement, it’s probably that the Dealer Agreement permits the Monitoring Center to terminate monitoring services if it’s not getting paid. 
            In your situation the old Monitoring Center was being billed for accounts it no longer had.  I think you should have planned better.  The Monitoring Center could have picked up the phone and given you a heads-up, but it’s not likely that it had to and in view of your departure, not something it was inclined to do.  Maybe Telguard should have realized the accounts had been transferred to a new Monitoring Center and should not have been terminated.  Hopefully there was no loss as a result of termination of the monitoring.
             Monitoring Centers who really want to be transparent with their dealers use the Kirschenbaum Contract ™ Dealer Agreement © .  This Standard Form Dealer Agreement is fully protective of the Monitoring Center, but clearly sets forth the various terms that are important to dealers.  Even if presented with this Dealer Agreement dealers would be wise to engage K&K to review and add our customary Rider to the Dealer Agreement.  What's the phrase, "an ounce of prevention is worth a pound of worry"; something like that.  The Rider to the Dealer Agreement is $500 and worth it.  The Rider is not on the Alarm Contract order form, you have to send me the Monitoring Center's agreement and request review and the Rider.​
Insurance procurement clause question
            I am writing regarding the contract - Central Office Monitoring Contract 
            We currently have a new client that would like to know exactly what bullet #16 means, the INSURANCE part, he’s wondering how it would affect his insurance policy and why does he have to have us. as his insured, and in what ways it falls back on him for having to add us in to the insurance.
    Please, let me know what I could relay to client.
 Thank you for your time.
   So, how do you convince a customer to name you as an additional insured. We get asked about it all the time. We don't really have a good explanation. 


            Subscribers sometimes question the insurance procurement clause because they think their insurer will not agree to name the alarm company as an additional insured, or they think it will be too costly or they are concerned with their loss run or some other nonsense.
            I don’t really want alarm company personnel explaining the contract provisions to the subscriber.  You and your staff are not lawyers and any conversation about what a contract term means can leave you open to claims that you misrepresented the contract or intentionally fraudulently induced the customer to sign the contract.
            As repugnant as the insurance procurement clause is to some subscribers it is crystal clear in its meaning and requirements.  The subscriber is to obtain and carry insurance for losses that may arise if the alarm detection devices don’t work and the subscriber is to name the alarm company as an additional insured.  What does that mean to the average subscriber?  It means they have to call their insurance agent to get the coverage they need.  They probably already have the coverage for themselves so now they need to add the alarm company on the policy as additional insured.  
            This serves two purposes for the alarm company.  It provides additional insurance coverage [primary and non-contributory if you have the 2020 updated tAll in One Agreements] and it serves to preclude the subscriber’s carrier from enforcing any subrogation rights it may have emanating from the subscriber.  The additional insured serves an important purpose for the subscriber who has also agreed to indemnify the alarm company.  The insurance will cover the indemnity.
            But in the end the best explanation is a shrug of the shoulders and “I am not sure, our lawyer and insurance company requires this contract and everyone else in the industry uses it and has the same terms”.  

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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