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what does your subscriber's lawyer think about the indemnity clause
November 2, 2017
what does your subscriber's lawyer think about the indemnity clause
    Certainly one of the most challenged provisions in the Standard Form All in One Agreements is the indemnity clause.  It requires the subscriber to indemnify the alarm company, even when the alarm company is negligent or has breached the contract.  You are all familiar with the indemnity clause, and think favorably about it when it's the subscriber being asked to provide the indemnity.  You're not quite as sure when it's you being asked to provide the indemnity to the central station or other vendors.  
    Suffice it to say that the indemnity provision is well entrenced in the alarm industry with the allocation of risk moving up the line from subscriber to alarm dealer to central station.  Recently a lawyer shared his analysis with his client.  Here 's how the industry standard indemnity clause is viewed by the subscriber:
     "I think these indemnification/insurance/limitation of liability clauses to be unconscionable.             The way the agreement is worded in terms of indemnification and insurance, it is backward from how it is applied in the real world.  In the usual course of events, it is the owner that is indemnified by the vendor/contractor for the latter’s acts, and the owner is named as the additional insured on the vendor/ contractor’s insurance for acts committed by the vendor/contractor that expose the owner to liability and not for the owner’s separate acts.  Here it is topsy turvy with the agreement written the other way around to protect the vendor/contractor from liability for its own acts either under your policy or by you personally.  Moreover, a vendor/contractor should be standing behind its work and not seek to hide behind a limitation of liability that is abysmally short of realistic exposure that the vendor/contractor might cause."
    Sage advise when it's given to the subscriber.  But maybe the alarm industry is a "topsy turvy" world.  Maybe it has to be so that alarm companies avoid lawsuits every time a subscriber suffers a loss, whether the alarm worked or didn't work; whether the alarm system was DIY, basic, rudimentry, or sophisticated enough to be in a sci-fi movie about the future.  
    It's one thing for an alarm dealer to be responsible for damage it causes while working on the premises, and another to basically guarantee that no loss will occur if an alarm system is installed.  
    You are going to be challenged on the indemnity clause.  Be prepared to discuss the issue in an intelligent way so that you end up retaining it in your contract with as little modification as possible.
    When in doubt or unable to win over the subscriber or its attorney to your point of view, then contact me for assistance.


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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
516 747 6700