Everything You Need to Know About Your Alarm Monitoring Contract
Alarm monitoring contracts are signed between the service provider and the customer in order to outline all legally relevant details – everything from the company’s liability for false alarms to the subscriber’s obligations to pay prescribed charges. These contracts have substantial importance and relevance to both service providers as well as customers. For the customer, signing this document simply provides written evidence that they have entered into an agreement with the alarm monitoring company. More importantly, it provides legal protection about what to expect from their service provider. Which services are included? Which alarms fall under the service agreement? Furthermore, a well executed alarm contract also protects the service provider in having a written document to refer to when disputes arise. For example, by seeking advice from legal professionals, an alarm monitoring company will be able to create a framework for compensating their customer for false alarms.
There are a number of laws and regulations that govern the alarm monitoring industry. This is of significant relevance to the service provider as it defines the rules in which they must complete their tasks to ensure that the customer is satisfied. A good alarm monitoring contract will also inform the subscriber if there is , or is not, a provision in the law that requires the service provider to pay damages for false alarms. This information would assist in the dispute process if the wrong view was taken at the time of signing the alarm contract. Whereas these laws are relevant to both parties, sometimes the customer needs to be educated of the details of the obligations they are about to undertake.
The contract should also clarify the mutual obligations of an alarm company to respond to any alarm. Some alarm monitoring companies will charge for this service in addition to the monthly fee for monitoring and checking alarms. The monitoring company may also charge a certain amount for sending out a technician to the site of the alarm, as well as for the attendance of police or the fire department. In some places, law enforcement agencies will not respond to alarm calls unless specifically requested to do so by the monitoring company. Other local agencies will only respond to a call from a monitoring company in particular circumstances, or they will continue to respond at intervals even after the monitoring company has cancelled the alarms that are not responded to.
Key Features of Any Alarm Monitoring Contract
One of the essential documents that must be created by an alarm dealer after a contract is entered into is the alarm monitoring contract. This article will provide what should be included in a monitoring services contract so that the alarm dealer has a template to utilize for a number of years.
Like an installer agreement, an alarm monitoring contract should be as simple and straightforward as possible. Although alarm dealers may have a tendency to cut/paste/install/terminate/probationary clauses to other agreements, for a monitoring contract, cutting out clauses is, in our opinion, the worst thing that can be done. Long contracts tend to be counterproductive and many consumers fail to read long contracts. Plain language in an alarm contract is more effective than legalese.
The following are the key components to an alarm monitoring contract:
- (1) Services Provided: The monitoring contract should be clear as to the services that are being provided by the alarm dealer. We have found that alarm dealers have either narrowed down their alarm monitoring services or created three or four tiers of alarm monitoring services. The reason for the three or four tiers is the competition in the monitoring market where some alarm dealers offer a price and try to undercut competitors with their lower monitoring rates. The other reason for narrower contracts is that alarm dealers have segmented their monitoring services by creating interactive services, environmental services or video services.
- (2) Installation Services: The alarm monitoring contract should state that the alarm dealer is either the installer of the system or if a third party has been hired to be the alarm installer. If the alarm dealer will install the system and be responsible for the installation, then under no circumstances would the contractor be given to the alarm customer. Issues are then created if the alarm dealer no longer functions as a contractor.
- (3) Payment of Fees: The alarm monitoring contract should be very clear as to the fees associated with the monitoring services and how those fees should be paid. Some alarm dealers have switched to billing monthly via credit card, while others continue to bill biannually and allow payment by check.
- (4) Early Termination: The alarm monitoring contract will usually contain a termination right. In many cases the alarm dealer will be required to pay a termination penalty or give the customer credits for the equipment. It has been our experience that the right to terminate without an early termination penalty is typical during the one-year initial term of an alarm monitoring contract.
Legal Issues in Your Alarm Monitoring Contract
When crafting a contract template for alarm monitoring services, legal considerations must be prioritized. The existence of various laws and regulations at both the state and federal level means that alarm professionals must be prudent while drafting their contract forms, as those agreements are legal documents. There are many specific state laws governing this industry—such as the New York Uniform Commercial Code §2-A-304(3) and (4)—that regulate the particulars surrounding alarm monitoring services agreements. Users are urged to consult with their attorney to ensure that their alarm service contracts meets all state or provincial regulations. Federal laws are just as important, with anti-spam regulations being one example…
How to Tailor an Alarm Monitoring Contract Template
Firms can offer specific services or service packages to customers as a part of the contract and these details should be outlined into the contract template. An alarm monitoring agreement is much more than a form that needs a signature. It serves as a legal agreement and a record of the specific services the business offers to its clients.
While contracts should be customized to fit the individual needs of the client, it’s not essential to create a unique contract for every single client. A contract template can be used for different clients by simply modifying areas that need to be changed. Having a standardized contract can also help save firms time on administration. If a company has a contract that has already been proven to work for them during a period of time, then it makes sense to use it for other customers. That’s not to say that every contract must have the same legally defined obligations. If services are added or the scope of services is broadened, those changes should be made to the contract template.
Adjust your contract template to ensure the following IMC USA Inc. recommended specifications are included: For specific clauses, businesses should refer to their legal adviser to ensure that any changes made to the contract template are permissible in the states in which they conduct business and complies with any contract laws in those jurisdictions.
Pitfalls to Watch Out For
There are several typical problems when creating an alarm monitoring contract.
- No Call List. Every alarm monitoring company must have a call list with at least 2 phone numbers for each type of alarm signal and have the list in their office. The names and phone numbers for the call list must be provided to law enforcement when requested. The contract should require the customer to provide an updated list to the alarm monitoring company AT LEAST ONCE A YEAR. The best practice is for the alarm monitoring company to make this a requirement for all accounts, then the customer cannot complain about why you treat all customers the same.
- Read Me the Terms. You should require the customer to read the contract terms and rates before they sign it. It is also recommended to have the customer initial that they understand the contract terms. Everything in this section was designed to protect your company if the customer claims, "I never agreed to pay that rate". If you do not follow these practices, you may have a hard time collecting.
- Required state forms. Most states require alarm system business to obtain the customers acknowledgment of state specific terms. In Texas, for example, there must be a copy of the False Alarm Reduction Fund brochure provided to the customer, and the customer must acknowledge receipt of it.
Heck, you want the customer to know about this because it helps with your false alarm fines .
- Incomplete bore requirements. Be sure to check your state requirements for alarm monitoring company bond amount and insurance requirements. Texas, for example, requires $500,000 in general liability, and a $10,000 bond. Be sure your contract has security alarm company requirements in it to avoid regulatory issues.
- Not requiring authorization signatures. Contractor should always have signed approval on any work orders, or authorizations.
- Unsupported exclusions of Liability. Again, be sure to check your state requirements. Some states do not permit an alarm monitoring company to limit liability to the amount paid by the customer within a period of one year. If your state allows this type of liability limitation, it should be properly drafted and promulgated by the state specifically for alarm monitoring contracts. There are many articles and cases about the enforceability of alarm monitoring contract limitation of liability terms. A good source, and good resource, is William Boehm’s, "Residential Security and Loss Prevention Workshop".
- Unreasonable limit of time to accept rates. One of the top defences to these types of cases is laches (that is a fancy word of saying, too long of a time has past for the lawsuit). As everyone knows, contact rates change like the wind. By limiting the acceptance of rates to 7 days or another unreasonable term is nothing less than forcing the customer to pay the terms you provided or else.
Leveraging Technology in Your Alarm Monitoring Contract
In the fast-moving world of security technology, the use of alarm monitoring services has greatly evolved. When an alarm is triggered, monitoring stations have the ability to determine the type of alarm that has been sent (burglary, fire, medical, etc.) and the priority of response through real-time information gathering and effective communication with the alarm user, whether it is a premises or a person. This enhanced monitoring technology provides the ability to dispatch a higher priority level response, as well as greater ability to cancel a false alarm at the premise. It is essential to reflect the changes to the alarm monitoring process within the alarm monitoring contract template.
Contract Review and Finalization
The review and finalization process is an important step in the creation of an effective alarm monitoring contract template. Once the draft is complete, a thorough review should be conducted by the legal team to ensure that all the necessary provisions are included and that the language is clear and unambiguous. This may involve multiple revisions and consultations with various departments within the organization, such as sales, operations, and customer service, to gather feedback and suggestions on how to improve the template.
Legal consultation is crucial at this stage to ensure that the contract template complies with all relevant laws and regulations and to identify potential legal risks that may not be apparent to other departments. In addition to legal review, it is also important to seek input from customers. This can be done through focus groups or surveys , as well as by soliciting feedback from customer service representatives who interact with clients on a daily basis. This feedback can inform revisions to the contract template to make it more user-friendly and client-focused.
Once all feedback has been incorporated, the final version of the alarm monitoring contract template should be reviewed and approved by the appropriate stakeholders within the organization. This may include senior management, the legal department, and department heads for sales, operations, and customer service. After review and approval, the final contract template can be implemented in the sales process and used to create individual contracts for each new customer.
Finally, it is important to regularly review and update the alarm monitoring contract template to reflect any changes in laws, regulations, or the organization’s business practices. This helps to ensure that the template remains relevant and effective over time and can be easily adapted to address any new challenges or issues that may arise.