Does anyone have information on a law suit that went against a New Jersey alarm contractor recently, where the court awarded the plantiff 4.5 million dollars. The NBFAA is going all out to raise money, from across the country, to file some sort of appeal. Kind of strange they would support a single company so aggressively, especially financially. Could it be that this contractor bought his insurance through the NBFAA insurance program?
All I know is what the NBFAA president had to say on their website:
A New Jersey trial court ruled that the llimitation of liability and indemnification clauses in alarm contracts are unenforceable under New Jersey law. I'm guessing this will get reversed on appeal, but that costs money. Appealing the case also gives a higher court the opportunity to declare this really is the law in New Jersey. So, it's four and a half million dollars worth of serious.
I spent a little time trying to get some info on this. I didn't find the NJ statute in question but I did find some interesting related stuff. It seems that in 2003 the USSC found that AT&T's limitation of liability clause violated California state law. I wonder how extensive is that decision's reach.
Here is one big reason more companies don't join...
Group: This is how the California Alarm Association (CAA), a state chapter of the National Burglar and Fire Alarm Association (NBFAA), deals swiftly with unlicensed alarm companies like Bay Alarm Company of Pacheco CA. Get out the large size Vaseline and whitewash they do.
2006 CAA publication "THE MIRROR". >
10-20-2000, did not have an ACO license until ACO license number 28 was issued to it over five years later on 12-28-2005 (see link #1 below). ACO license number 28 had been previously held by Balco Holdings Inc (previously named Bay Alarm Company) from 1979 until 12-28-2005 when it abandoned that name and license. That letter is incorporated herein. >
10-20-2000, and its representatives: > 1. Bay Alarm Company, not possessing the ACO and C10 licenses required to engage in the burglar alarm & fire alarm business, did not meet the minimum requirements set forth by the CAA Bylaws for regular membership until at least 6-28-2006. The requirements for regular membership in the CAA include that the regular member must be properly licensed for the burglar or fire alarm work it performs. Bay Alarm Company did not possess both required licenses until 6-28-2006. >
6-28-2006, that it then held the required fire alarm license, falsely advertising that it held license C10-261003. This created unfair competition in the marketplace to the detriment of all other regular members of the CAA within the areas in which Bay Alarm Company operated. This constitutes a violation of the CAA Code of Ethics #3. >
6-28-2006, without the required C10 fire alarm license. >
12-28-2005, without the required ACO burglar alarm license. >
6-28-2006, during which period it must have known such advertising was false, that Bay Alarm Company held the required C10 license, by advertising Bay Alarm Company then held license C10-261003. >
12-28-2005, that Bay Alarm Company held the ACO license required for regular membership. >
6-28-2006, that Bay Alarm Company held the C10 license required for regular membership. >
5 years, and its representatives, by concealing and failing to admit its unlicensed status, have brought great shame, discredit, and disgrace to the CAA, violations of the CAA Code of Ethics #1, #2 and #3. >
It said this case was a subrogation action, which means that the computer company had burglary insurance, filed a claim, and got paid...and now the greedy goddamn insurance company wants to pass off the loss to the alarm company or its insurance company. That insurance company made more in premiums in one year for that burglary insurance policy than the alarm company made in five years of providing a real, honest-to-God service -- and now they want to make the alarm company pay off when their customer gets robbed?? Fuck them!
When you are selling an alarm system for $25 to $50 a month, you can't also afford to provide five million bucks worth of burglary insurance. In fact, for those prices, you can't even afford to hire a lawyer to argue about whether you're at fault or not. That's why we have limitations of liability in our contracts: if one customer gets robbed and sues you, you will eat up many years of monitoring profits defending yourself, even if it eventually turns out you weren't at fault.
If you want to assume the risk of having to pay off if your alarm doesn't prevent a loss, then you will need to set your rates according to how much your customer has to lose. Nobody assumes a risk without getting paid for it. And you can be damn sure your insurance company will follow that rule, too: it will want to know how much it might lose if your alarm doesn't work, and set its premiums accordingly.
You think this is just a matter of putting in good systems, but it's not that simple. Many years ago, jewelry store insurance was prohibitively expensive for many people, and some jewelers did without insurance. These cheap bastards also bought cheap safes. They figured all they needed was an alarm. When they got robbed anyway, they sued their alarm companies rather than face the consequences of their own poor decisions. No doubt they also bitched about the high prices the alarm company was charging.
Many factors go into whether a customer suffers a loss, and most of them are not within the alarm company's control. Why should an alarm company assume the risk, when its customer is cutting corners on physical security, insurance, and maybe even his alarm system? A customer might not even tell you about his million dollar stamp collection, leaving you to think you're just doing an average house job. Until he gets robbed, of course. Then, you sold him an inadequate system!
Yeah...I have been there...We had this jewelry store customer move locations
3 times in 6 years.
At our first encounter, we took over his antique Ademco 4140XM. He refused to upgrade, or add a backup radio, or phone line monitor, so he signed a waiver...all was good.
At our 2nd encounter, we removed his 4140XM and installed it in his new location. He again refused to upgrade, or add a backup radio, or phone line monitor, so he signed a waiver...all was good.
At our 3rd encounter, we removed his 4140XM and installed it in his next new location. He again refused to upgrade. But this time he cracked open his wallet, and paid $140 for a AlarmNet A backup radio. He still refused to install the phone line monitor, so he signed a waiver...all was good.
At our 4th encounter, we removed his 4140XM & AlarmNet A Radio, and installed it in his next new location. He again refused to upgrade. He now felt that $65 a month to monitor opening & closings with Radio backup was just too much for him to bear. So he had us remove the openings & closings to save money. He signed yet another waiver.
One day I get a call from my expartner, the store was broken into...I arrive at the scene and find his safes were peeled open, phone line cut, and all the alarm equipment was on the floor smashed to pieces.
Several months later, the monitoring station and our company get sued because the business owner only received 60 percent of his insurance claim...he let his policy expire...what a surprise...so he figured he could recover the other 40 percent from the alarm & monitoring company.
His lawyer said we were negligent and went on and on...after I faxed over all the waivers, and his service revisions his client signed over the years, complete with upgrade recomendations, I never heard from his attorney again. I did appear as a key witness for the monitoring station lawsuit, soon afterwards the monitoring station was released of any liability.
In my opinion, the insurance company was at fault from the very beginning. They should have required the store owner to have a UL Listed and inspected system installed and maintained at all times. But this is expensive on both sides. The business owner can't afford the monthly & UL inspection fees, and the insurance company is looking to save costs by taking shortcuts as usual.
A jewelry store with insurance and no UL system? The ones I installed (none in recent years) were always the most anal specs, other than a SCIF. Most of the time they had two separate systems. It was always a good way to wake up when fixing foil and you forgot the loop current was at 90 volts. Heck even the ground was supervised on a day zone. And those nasty Ademco 1401 capacitance alarms? Jacking up the safe and all. My back! I am glad I don't do jewelry stores anymore. Better knock on wood because you never know.
No doubt it is serious. My question is was this thrown out prior to the start of the case or was it thrown out because they proved negligence, in which case I can understand where limits of liability won't hold up. What I question more is that all our liability insurance policys (industry wide) are dependent on the verbage in our installation, service and monitoring agreements. They all require limits of liability language. It is not for us to delete. In this case, I am sure this companys insurance company, who would be licensed in NJ, is representing the defendent. Can they, the insurance company, be that inept that they wouldn't know the laws of their own state? That is why I am thinking there is more to this than simply that limits of liability are against state statute. If it were against state statute, across the board, I can't help it think it would have come up before this. Kirchenbaum, being so close to NJ, with him being in the alarm contract business, most likely would have been vocal about it. Maybe the cost of doing business in NJ just went up or the tides may get reversed, have the client name us as additionallly insured.
I agree that the 1401 was junk, but expensive junk at now nearly 500 bucks dealer cost. I never used the Potter units you mention, but I used those Honeywell units in SCIF centers. Those were the ones where you had to use a butt set and listen to beeps in order to set the sensitivity. I think those were Honeywell. A real pain. I am glad I only see those in my dreams.
Yes, Honeywell HSL...I was there when they were first introduced. They were a good idea, provided very high security, and worked really well when you got use to it. But the high cost of the telco switch boxes made it affordable only for the select few...
It was dropped in favor of Radionics panels, with derived channel, AlarmNet A, or Telguard backup. Much cheaper solutions than HSL, but even AlarmNet A has troubles in large cities. Derived channel made a noise that customers complained about, and Telguard units were expensive to buy...those were the early years.