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Question

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Ken, 

    After training a new subscriber, I give her the alarm manual, city permit, certificate of installation and then went over your All-in-One contract (agreement as we call it) terms, only to be told she does not have the power to sign the contract and will send it off to corporate to get signed.  Here is my question.  What protection do we have if any with no signed contract?  Should we get something signed acknowledging receipt of the contract for review for added protection?  How do we protect ourselves if something happens prior to receiving the signed contract back? Thoughts?

Rich

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Answer

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    I use to have and ride horses.  I'd get a halter on the horse, tie it up and saddle it.  When I read your question I was reminded of the time that the horse I wanted to ride was in the corral and I walked out there holding the saddle.  I chased that horse for almost a half hour running around that corral with the saddle in my hands; a heavy western saddle.  Felt like a schmuck for trying to do things backwards.  

    Does that answer your question?  You have no protection because you have no agreement.  If something happens prior to getting the contract back you're not going to get the contract back.  Get the contract signed before you install it.

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Question

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Ken,

    I'm in the market for Insurance and don't know what I should be looking for?  I'm based out of New York and It's a one man operation for now. Also I would like the Insurance to cover some part time workers from time to time.  

Carlos

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Answer

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You can find reputable brokers in The Alarm Exchange listings.  Use one of them.  I got a call today from a frantic alarm company owner who after being in business for many years had his first subscriber fire loss.      Fire alarm didn't communicate; Fios recently installed by subscriber.  He wanted guidance and I instructed him that he had to notify his E&O carrier immediately even though he hadn't received a "claim" yet.      He told me he had Hartford.  My initial response was, good luck with that. You have a lot of choices when it comes to E&O carriers and you should do your homework before allowing even the experienced brokers to place you with their favorite.  Some of the questions you may want to ask is, are you aware of this carrier denying coverage, ever; are the claims representatives attorneys or experienced in the alarm industry; does the carrier use house counsel for most or all defense; will the carrier provide guidance before a lawsuit is started; has the carrier ever failed to resolve a claim or lawsuit that left the alarm company exposed beyond coverage limits?  Yes to any and pick a different company.  This alarm co has Hartford.  From my experience a poor choice.  Hopefully it will work out and we won't be hearing about it.

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Question

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Ken, 

    One of my customers called me today to inform me that a company named Proteck America called them today to say they have acquired my company and will need to reprogram the system. My client did not fall for this guy Rich's pitch but took his number down and said she would call him back when she had time to talk. She immediately notified me of what happened. My belief is not all clients are as sharp as this one and may fall for these possible illegal practices. So my question is, should we or can we being doing something to protect ourselves from these unscrupulous salesman? Some whom may be reading the forum.

    And if they do fall prey to this is my Kirschenbaum contract still binding and I should still expect to be paid.     As to the new contracts, does the subscriber have recourse not to pay the deceptive company. Thank you.

Paul

Diamond Protective Systems Inc

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Answer

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    A subscriber fraudulently induced to sign an alarm contract can have it nullified and can get out any time prior to ratification after the fraud is discovered.  As far as your contract goes, you can enforce it.

It's not easy when unsavory companies pursue your subscribers.  Good relations and good communication with your subscribers is a good shield against such practices, though companies with large subscriber base is obviously a bigger target.  Informing your subscriber of the improper practices is another way to ward off the improper competition.  Complaints to your consumer agencies may get some results and ultimately starting an action against the offending alarm company should get them to back off, cease and desist. 
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Question

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Ken,

    We are using your Standard Fire Alarm Sales, Monitoring and Inspection Service Agreement [the Fire All in One].  The customers attorney has asked we change section 13 and 14 to allow gross negligence and willful misconduct from these paragraphs.  We often has this request to allow gross negligence to be carved out.  I can’t find anything in previous e-mails you have sent.  What is your opinion and what is the liability for allowing this?  They are agreeing to $250.00 limitation of liability.

E-mail me a bill for this, or have your office call for credit card, we will pay you for your time.

Thanks

Don

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Answer

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    You can give away ice in the winter, and you can give up the alarm protective provision for gross negligence and willful misconduct - the contract won't protect you from that wrongdoing anyway [there might still be a jurisdiction or two where the contract provisions will provide protection from gross negligence, but I think it's a better decision to give in on that request, especially if you want the job].

    No charge for the advice.

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TO SUBMIT QUESTIONS OR COMMENTS REPLY TO THIS EMAIL OR EMAIL Ken@Kirschenbaumesq.com.  Most comments and questions get circulated.

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Speaking Engagements

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Sonitrol Verified Electronic Security.  Annual convention March 22, 2014 at The Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas.

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SentryNet's 19th Annual Dealer Conference.  April 22 - 24, 2014 at Harrah's in Tunica, MS.  register at http://www.sentrycon.us or call Peggy at 800-932-3304 for more information.   www.sentrynet.com

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Alabama Alarm Association.  AAA's Fall Meeting and Trade Show - October 21, 2014 from 3 to 5 PM at DoubleTree Hotel 808 South 20th Street Birmingham, AL 35205  contact Shelly  (205) 933-9000 for more info

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Electronic Security Summit for 2014.  October 22-24, 2014  at the landmark Broadmoor Hotel. Colorado Springs, CO.  For more information contact Alexander J. Quirin, CEO & Managing Partner, Advisory Summit Providers, LLC.,  (786) 999-9738    alex.quirin@aspsummits.com    www.aspsummits.com