January 21, 2011
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Question
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Hello Ken,
I am writing with a couple of questions and was hoping you could help me out. I purchased you contract recently and am in the process of making some changes in my company. My main concern is that over the last year there has been an increase in the amount of customers who are requesting copies of their alarm certificates for their insurance companies. I have informed them that I will no longer provide them with a certificate unless I first perform an inspection on the system. I am doing so due to the fact that some of these systems are several years old, I have found customers who have covered their motion sensors due to pets, among other issues. One of the other issues is that some customers have changed their phone service, going with VOIP and the systems are not testing accurately. There is a charge in place for this inspection and I am finding that several customers are not willing to pay this fee. I am wanting to know if I provide the alarm certificate, does that then make my company liable for any losses due to failures in the system even if they are customer induced. I am under the impression that when I provide this documentation that makes my company liable therefore I feel the inspections is necessary. Also I am being personally contacted by the customer's insurance companies, am I obligated to deal with the insurance companies? Or, is this the customer's responsibility to obtain the documents from my company then forward the information to their insurance companies themselves? Thank you so much for your time and assistance in this matter.
Thank you,
Louis
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Answer
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Depends on what the certificate states; and you are not obligated to deal with the insurance company. You can add to a certificate that you have not inspected the system but you know one was installed. Or, insist on your inspection - it's not bad idea. Make sure you have proper contracts in place - the inspection can expose you to liability that you don't otherwise have.
Inspections should be carefully defined. Unlike commercial fire alarm systems that require inspection, ordinarily alarm companies service intrusion systems on request but do not provide inspection. If you obligate yourself to an inspection then the scope needs to be defined and you definitely need a contract with protective provisions. The Fire All in One includes the inspection service.
Insurance certificates are between the home owner and the insurance carrier and often required either for coverage or discount. Your subscriber will ask you for it and you are not required to deal directly with the carrier. If you don't cooperate however you may lose your subscriber to another alarm company with different policies or standards.
Make sure you read the certificate that you are signing, and that you are comfortable with any statement that you are making in that certificate. Remember, it's your certificate - your certification of the facts set forth in the certificate.
You are not wrong to require the inspection first. Just make sure you CYA.
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follow up comments on New York's proposal to license central stations
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Ken,
Thanks for highlighting this issue [see email article dated January 19, 2011]. We are encouraging every company to read the proposed ordinance and make a determination if it makes sense for their business. I have spoken to many companies who have only heard of it and have not actually read the text. We think that it is important that the NYBFAA hear from as many interested parties as possible before this is approved and gets in the hands of a legislator. Once this goes outside of NYBFAA there is no assurance as to what the final ordinance and fee structure will be. This concerns us in a State that currently has a huge deficit.
Regards,
Russell R. MacDonnell
Rapid Response
********* Note: NYBFAA is supporting this new proposal. MBFAA has not offered any support.
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Ken
“We the people” need to stop looking to government for answers and solutions, because the government doesn’t have any answers. This proposal needs to go away and the author of it needs to be bound, flogged, and left outside for 3 days for public view and mocking.
Danny Dunson
Direct Alarm
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Thanks Ken,
Russ’ commentary and analysis is right on the money on all points. Please tell him we support his comments and thank him for thoughtful analysis.
Michael J. Joseph, Vice President, Operations
Sentrynet
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To all:
Let me figure out the increased cost of the proposed licensing requirement in New York that will be passed on to the Rapid Response Dealers based on the cost of a license in my state, which is $310's every two years. 1200 dealers divided by $310.00 equals $3.87 per dealer every two years or $1.94 a year. Hopefully they already have their insurance coverage handled. That shouldn't change whether you are licensed or not. If you are already following good sound business practices, I doubt the law will have you change anything so your cost shouldn't go up to meet the requirements. If your are using good business practices in the security industry, than you are probably overcharging the dealers anyways. I will pay that $1.94 increase in a heart beat to know that I am dealing with a company that is regulated and following the law. Stop whining. Get licensed. You are already doing it other states, so what is the big deal.
Portland Paul