*****************
A recent discussion among central station owners/operators revealed a difference of opinion regarding automatic timer tests for alarm panels - not just fire but all alarms. Panels [not the older ones] can be programmed to send a test signal to the central station. The test confirms that at least part of the alarm system is operating - i.e., communication.
The issues are:
does timer tests replace the subscriber's responsibility to test the system and request service?
does timer tests impose additional responsibility on the central station?
will receiving timer tests expose the central stations to additional liability?
do central stations have any direct duty to the subscriber?
should the central station have a contract with the subscriber?
Some of the comments appear below so you can get a flavor of the issues. Since only two participants emailed me directly requesting that I address certain issues, only they are identified. Before you get to their comments, here is my take on the issues presented.
My Standard Form Contracts provide for the subscriber to test the alarm system and request service when necessary. There is no sound reason to alleviate the obligation. As mentioned below, a test signal will confirm that the system is operable only at the time of the test, and in any event is not likely to be able to test the entire system.
Central stations receiving test signals would have a responsibility to act if the central believes the alarm system is not functioning properly. The only way out of that responsibility is if the central station's contract with the subscriber specifically provides that test signals are not intended to benefit the subscriber and that central station has no obligation and will not provide any response to the test signal. I don't see the benefit of the test signal with that type of disclaimer. Therefore, we should assume that the test signal, received or failure to receive, will trigger a required response from the central station?
A central station that thinks it's obligation ends with the dealer is kidding itself. The central station has an obvious connection to the subscriber and is going to be held accountable for its negligence in failing to perform the obligation owed to that subscriber.
As David Arvitt reminds us, central stations would be wise to have contracts with the subscribers. A contract with the dealer is not enough. Sometimes dealers prefer not the have the central station contract signed; they want to use their Monitoring Contract. The dealer is correct that the dealer must use its own Monitoring Contract; the central station's monitoring contract is not a substitute for the dealer's monitoring contract, it's an additional contract that is required by the central station. The central station is correct in requiring that contract, which is generally signed by the central station, dealer and subscriber [hence called the 3 party contract]. That 3 party contract can be eliminated only when the central station is very comfortable that the dealer is using a Monitoring Contract that contains all of the protective provisions that belong in an alarm contract, and those protective provisions extend to protect the central station. Then the central station needs to be sure that the dealer's monitoring contract is used for every subscriber and should not put a subscriber on line without receiving a copy of that contract.
Bart's comment is particularly interesting because he is the only Claims Administrator [for SARRG] in this industry who also owns an alarm company - it gives him a unique understanding, and more importantly, a stake, in this industry. Thanks for his continuous participation.
***** Here are some of the comments from central stations regarding tester signals:
*********
Ken,
I belong to a couple of industry specific chat lists and on February 4th, 2010 there was the following comment to which I take strong issue. It is about the test timer function available in panels for the last 25 plus years. The writer suggests that use of the test timer function, “…..in the panel as a way to satisfy the requirement made on subscribers to test their system monthly. You no doubt experienced the fact as did we; subscribers rarely were manually testing their system.”
I can't disagree more with this position based on being the Executive Claims Administrator of Security America Risk Retention Group (SARRG) and the president of a central station company, because in both positions we rely on those contract provisions to provide affordable insurance coverage for alarm dealers and affordable monitoring rates for independent alarm companies.
The reasons are the same for both sides of Bart Didden, (insurance executive / alarm monitoring company owner) - the burden of reporting failures is placed on the consumer because they have the ability to visually inspect the whole system, they have the ability to arm and disarm the system, they have the ability to arrange for a test with the central station and initiate a signal and verify that it went through correctly by speaking to the central station operator. If the user can't get a clear to arm indication on the keypad interface, we don't know that. A 24 hour / weekly or monthly test timer transmission only offers proof that the panel is powered, the panel logic is somewhat intact, that the phone line is in service and able to transport the dialing to the phone company and a transmission to the central station.
The limited amount of information contained in the test transmission offers no glimpse or substance about the health or performance of the system zones and devices, or even the battery in the panel. For example, how low is the battery?
To assume any other information of conjecture as fact, only undermines an effective defense of your company, your central station and defeats the protections specifically designed into your contracts. A test timer is just that, a signal that the panel knows that 24 or 168 hours or one month has elapsed since the last initiated signal.
Bart A. Didden
Executive Claims Manager – SARRG
President - USA Central Station Alarm Corp.
***********
Ken:
I would like to see you reply to this comment on SIA/Accent list serve. Notice in the first paragraph this central station makes reference to NO contract between subscriber and central station. I find that a lot of central stations do not require a subscriber contract, they are merely going on the pretense that the alarm company contract protects them. From my discussions with you, Alan Pepper and Less, I have always been told that to protect myself, a central station contract was imperative. Am I correct? If so, I think you might have something to say to this audience.
Thanks
**********
We are slowly getting our own accounts sending tests and are at almost 70%. Our few dealers have about a 50% ratio.
********
Years ago when manufactures did not, for the most part develop test timers for their panels and a timer was an add-on item, about all we say was daily timers on fire systems.
When the manufactures developed timers in the panels, we saw little implementation of the timer. Perhaps 5% usage on non fire systems!
When the timers were added by the manufactures we developed additional pricing for the levels beyond the daily test. As I stated earlier, the feature was rarely implemented.
We pushed the dealers with messages that hailed the implementation of the timer in the panel as a way to satisfy the requirement made on subscribers to test their system monthly. You no doubt experienced the fact as did we; subscribers rarely were manually testing their system.
Once I gave the monthly test away – dealers used the free service to induce the old established users to have a service call to implement the monthly test. With that action by us – the rate of auto testing systems jumped drastically. Even the weekly tests for which we charge jumped.
There is a retailer in our area who as coined the phrase in their ads “FREE, IS A VERY GOOD PRICE!” My move accomplished much – the monthly test was included in the basic monitoring price.
The implementation of the testing is not just a value added for the subscriber, the greatest true value is to the dealer who now has an indication that his customers system may be having a problem and can generate a service call.
**********
Once a central station, or in the case of third party – the central station notifies the dealer, what is the responsibility of that company and what liability can come of not doing anything on that failed timer test.
Is it simply there as a logging issue for the protection of the company to know the system is working, or are you extending a service which can then be a liability.
For example, not exactly on point, but Open Close on commercial. A customer says he was broken into. Open Close shows they never armed the system. Protection for the alarm company. However, since they weren't paying more for the service, it’s simply an alarm company feature. It can then be turned around and they ask why they weren't called when they didn't arm.
Why weren't they called when their system failed to test?
********
Years ago our station charged for periodic test (daily, weekly, and monthly). We charged the dealers $.25 per month for the monthly testing. At that time the dealers rarely programmed panels for any test except those required to have daily testing. We eliminated the charge for the monthly test and now about 75% of the account base has periodic testing. For the most part, those accounts not testing are the older panels that have not yet been changed out.
*******
We encourage our dealers to send at least a 30 day timer test on all accounts. For Commercial accounts and other regulated accounts we encourage them to follow proper protocol.
*******
I think that some of your answers need to come from an attorney.
First so that there is no confusion as to where we believe it fits in the scheme of thinks; I provide the following. We are third party / contract central station. There is no contract between us and the subscriber. The only contract is with the dealer which basically obligates us to perform actions consistent with the alarm processing specifications on each account as developed by the dealer and the subscriber. We can and do challenge the wisdom of some instructions – in some instances we might refuse to comply.
In the case of test signals and their failure to be received, we notify the appropriate dealer and expect them to get with their client to arrange correction of whatever the problem might be.
If the problem continues un addressed and uncorrected, we will do a formal notification by slow mail.
If the failure to test is on a fire system’s daily test and goes uncorrected or un addressed for an extended period (a second week) the local Fire Marshal is notified.
We believe that failed test and reports of system trouble or system supervisory reports should in most cases be reported only to the alarm dealer. We believe the alarm dealer is the one responsible to communicate to their customer, the ramifications of not correcting the reported problem. The dealer needs to initiate the communication with their client to schedule a service call. The central station should not call the subscriber, counting on the subscriber to call the dealer to schedule service.
********
You probably have experienced, as have we the failure of a test once only to find that it is received on the next scheduled period.
As for your reference to Open and Closing Service, we offer open/close – record only, open/close – scheduled, open/close –supervised, open/close – supervised + scheduled, and open/close – restricted. (if you need – I can define the features of each). Each level has a billing charge. Each level has a description of the service at that level.
When the hard copy paperwork is filled out by the dealer and subscriber – I would hope that the question comes up as to the level of open/close service desired.
My best answer to the question “Is it simply there as a logging issue for the protection of the company to know the system is working, or are you extending a service which can then be a liability?” -- Failure to follow up on the actions that we take or perform could become a liability for the dealer if not addressed.
I hope that I have addressed your concerns!
**********