If you are thinking about becoming a Certified Dealer for a security alarm system manufacturer or service provider (e.g., Honeywell or Alarm.com), there are several important things you should know that may affect your business and your own contracts with your customers. Continue reading
Ask the Attorney: My customer is questioning why there are limitations of liability and damages in my contract. How can I explain this, and can I change it?
First explain to the customer that the limitation of liability provision doesn’t protect you from all If an alleged failure of the alarm system is caused by the alarm company’s intentional, willful, or grossly negligent conduct, the limitation of liability will not apply.
The reason that you limit your liability is that the amount that an alarm customer pays for service is insufficient for the alarm company to insure the property protected. That is why the alarm company asks its customers to look to their own insurer should they suffer a loss. Insurance companies base their premiums on their assessment of the value of the property and the vulnerability of the premises. By contrast, alarm service fees are unrelated to the value of the property. Thus, an alarm company cannot undertake to provide an identical type of insurance coverage should the alarm fail to prevent a loss. The contract terms are designed to prevent that from happening. With any reputable alarm company, you will find similar contract language.
You can blame your insurer and attorney for the fact that you cannot negotiate the fact that your company’s liability is limited. You can, however, negotiate the amount of the limitation of damages—say from $500 to $1,000 (or even more). But don’t make it as high as your insurance policy limit.
You’ve been asking (and asking…) and I am finally delivering: customizable alarm contracts are now available online for immediate download.
Supporting documents also available: Schedule of Equipment & Services; Addendum/Change to Installation and Monitoring Agreement; Alarm Response Contact List; PERS Contact List & Data Sheet; Right to Cancel Handout
Don’t rest easy just because you have a contract with your customer. Whether your contract will be enforced by a court, or even applies at all if you are sued, depends entirely on what your contract says. Many alarm contracts I see, a staggering number actually, are riddled with errors that could make them useless. These contracts either simply don’t have the right provisions, or they say the wrong thing. This puts the business in jeopardy if a customer ever experiences a loss. Are you in that same boat? Here are some questions to ask your business. Continue reading