Personal Emergency Response Contracts are for medical alert alarm services.
As you can imagine, these contracts are somewhat different than the
security contracts for alarm services, such as burglary, fire, etc. For one
thing, these contracts are always with consumers. Secondly, these contracts
are almost always with elderly or seriously ill consumers. Thirdly, these
contracts may very well be governed by state laws or regulations that are
very different from other requirements that may affect alarm or security
contracts.
New York is one state that has different requirements for Personal
Emergency Response contracts. Perhaps the most obvious requirement is that
the typical 3 day cooling off period [or cancelation period] is increased
to 7 days.
Another requirement is that the subscriber be permitted to cancel the
contract without penalty if the subscriber enters a nursing home facility.
The subscriber would have to send notice of entering the facility and also
return the alarm device.
As I reviewed the standard Personal Emergency Response contract I offer
[www.alarmcontracts.com] I noticed that the contract is not terminated by
the subscriber's death. That apparently was missed by the legislature, at
least in New York. The general rule of law is that death of a party to a
contract does not terminate the contract unless the contract so provides.
The decedent's estate, if there is one, becomes liable for the contractual
obligation.
Nevertheless, I am amending the Personal Emergency Response contract to
provide that it terminates upon the death of a subscriber; alarm device
must be returned unless owned by the subscriber.
Providing personal emergency response - medical alert - does apparently
present additional considerations to the alarm company. I suppose this is
so mostly because of the description of the service - a promise to contact
emergency personnel once a signal that help is needed is received.
There is a concern that the subscriber does not understand that the alarm
company is not actually sending help, it is merely contacting designated
emergency response centers, like police, fire or other emergency services.
I don't really see why this type of response by the alarm company raises
such additional concerns, but it does, especially from the errors and
omissions insurance companies who don't like to, and often won't, write E&O
insurance if the alarm company writes a lot, sometimes any, medical alert
contracts.
Before offering personal emergency response services make sure you have a
proper contract for that service. You should have a separate contract for
this service. You should also make sure that your E&O carrier has not
excluded coverage for this type of service.
follow up - Personal Emergency Response
Ken,
Thank you for the information on the contracts for the PERS, more
specifically for sharing your perspective.
This is a very misunderstood exposure. In my 17 years insuring the
industry, I have insured companies that provide alarms systems, guard
services, monitoring, systems integration, medical alarms, home automation,
etc..
I have seen dealers that pay a ridiculous amount of money for their
insurance and their agents claim that it is due to the medical alarm
exposure.
There is an additional exposure and there should be an increase in
rate/premium, but most of the people that I speak with have been taken
advantage of. Adding this service should not make their premiums double or
triple.
Dealers need to know that there are carriers that insure this exposure and
it is affordable. I would urge anyone that offers medical alarms or is
interested in offering them to contact me for coverage review and to market
their insurance.
I will be forwarding this to the carriers that will not provide insurance
for this exposure and ask that they reconsider.
Kindest regards,
Alice Cornett Giacalone
Senior Vice President
Berrian Insurance Group
(v) 800-917-2542