Ken,
In a couple of posts you have made comments about not repairing alarm systems that you do not have under a service contract. I would like to know exactly the law, interpretation, rules, etc around this.
We are a security company that is mostly in locks, cameras, access control and a small amount of alarm. We have made a niche in our area repairing home alarms that are not monitored, or the customer is having new windows put in and needs the contacts replaced. etc Since our state requires licensed electricians to do this (lol, and guess how many alarms companies use electricians) and installation/ repair permits, we have been able to come in and do this as electrical work.
We hear it quite often that ADT or other companies will only do the work if there is a monitoring contract. We also push for this, but as a last resort we will do the repair and charge a premium rate, leave our card and make the sale. What I am curious to know is whether or not there is a big liability with this and for what legal reasons. Legal reasons backed up with case law.
I see other alarm guys shake their head and say "dumb, dumb dumb" When I ask why, their only response is "get a contract" That's a statement, not a reason. Or they expound upon the virtues of RMR. (I think everyone here knows this by rote. No need to go into it, as I agree) My response is, "if they will never sign a contract I will charge the $1000, make a friend and hope for repeat business and referrals." (this happens a lot).
Now, if their is a law on alarms they could say. "Well, you never repair an alarm not under contract because federal law 1234.1 or case: Joe blow vs ABC alarm company" This I could understand. Is there something like this? And if so, shouldn't I be able to get around repairs or other systems faults by having the customer sign a one time service contract stating the repairs, possible future maintenance, suggested upgrades etc.
Seems a simple form contract or liability waiver added to the invoice would solve this.
As a final note, some of these non-monitored alarm repairs run into the thousands and are integrated into an access control job or much more. They can be very lucrative up front which compensates nicely for not getting a monitored account.
Leo Taylor
ESI Security
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Answer:
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Electricians are not use to getting contracts; it's not common in that industry. In the alarm industry contracts are used to "contract away liability for your own negligence". There is plenty of justification supporting public policy that permits the enforcement of this provision in an alarm contract. In a nut shell, it keep exposure not contemplated by the parties [alarm company and subscriber] consonant with the amount charged for the alarm services, and to maintain reasonable charges so that the services are available to the public at affordable rates, the contract provisions will be enforced. Additionally, claims against alarm companies generally exaggerate the parties' expectations of the alarm system; the contract terms better define those expectation. What do I mean by that?
When a claim is made against the alarm company it is generally because there was a loss and the alarm failed to prevent the loss. Alarms are not however installed to prevent a loss, they are installed as deterrents. Whether it's a sticker on a window, lawn sign, or full blown perimeter protection, there are still no guarantees that no loss will occur. The contract makes that crystal clear; all risk of loss is on the subscriber. Why is that fair?
It's fair because no matter what you charge for an installation, monitoring service or service to repair the alarm system, you can't be expected to assume liability for whatever the subscriber has on its premises or the persons within those premises. Those factors were not considered when you arrived at your price for your services. Insurance companies calculate risks, consider contents, limit risks by having policy limits, and then calculate a premium. That's not how alarm companies figure prices. Therefore, it would be unfair to expose alarm companies to what would be unlimited [and usually undisclosed] liability.
As for the "law" or "case". You can spend many hours reading leading cases all over the country against alarm companies on my web site at https://www.kirschenbaumesq.com/casesbystate.htm
A Service Slip is not the same as a Service Contract. [I do have a Service Slip but it's not on our order form - you have to call Eileen at 516 747 6700 ext 312 to order it] For one thing, it's generally signed after the work is completed, and therefore may not get signed at all.
The Standard Service Contract is designed to be used as a "per call" contract or as a recurring revenue contract. Since you say you understand the benefits of a recurring revenue contract I won't go into that here. You would use the contract's "per call" option, which means that your subscribers could call you for service, but they don't have to. They can call anyone they want. If they call you, and if you do any service calls, the one time Service Contract they signed with you will cover those calls and should protect you. You've "contracted away your liability for your own negligence" and will also have other protective provisions should the subscriber suffer a loss that the alarm was intended to deter.
I strongly suggest that you use a Service Contract.