Alarm Failure Liability Only $2,000?

I am currently in the final stages of signing a contract for the monitoring of our site, reading through the contract, in the event of it been the monitroing stations fault not picking up on the alarm the maxium they will pay is $2,000. This seams very low. Is this the standard amount in the US that a monitoing station would pay out for a customers loss?


I’ve never heard of a monitoring station who is willing to pay out for unanswered alarms. There’s a lot that goes in to monitoring a security system and there’s a lot that can go wrong before those signals get to the monitoring station. It would be hard to prove that the monitoring station received an alarm signal and failed to act on it. That being said, make sure you choose a monitoring station who’s capable of monitoring high security facilities while you may not have a high security building. It’s good to know the same people who are monitoring high security are monitoring your system as well.
Here are a few questions I send out to our customers to ask our competing alarm companies before choosing a monitoring provider.

• Do you have the availability of at least three (3) interconnected and redundant monitoring stations monitoring your system?

• Does the connection of those stations allow for signal traffic load balancing, redistributing resources during spikes in activity?
• Can customers view their account activity and event history online?
• Is your station partnered with leading technology innovators such as Verizon® and Avaya®?
• Is each station individually UL listed, and does it comply with Factory Mutual and NFPA standards?
• Is each station backed up by uninterruptible power supplies and generators?
• Does each station have technical support that is available 24/7/365?
• Can communications with your station be accomplished using cellular internet communication paths, and standard phone lines?
• Does your station offer support services and enhanced reporting capabilities?
• Does your station provide research, using digital voice recordings, alarm event activity and phone call detail, to ensure quality service for your customers?
• Do employees undergo extensive background checks?
• Do employees undergo intensive training and certification?
• Do your employees have continuous mentoring throughout their careers?
• Do the technicians who service your system personally review signals sent to the station?

IMO, not worth all that research. Just go with a medium/large one. All of them are the same, they are going to hire bottom of barrel so they don't have to pay much...its just like a fast food restaurant...max is maybe $12/hr if lucky. They will hire anyone who applies. Turn over is relatively high.

The pay out is something you would probably never get anyways because you would have to prove that it was their fault. They know all the ins and outs, and will easily shut you down on any claim with the advanced knowledge of the systems they have. And...they really don't care- they have thousands of monitoring clients because it is such a oversaturated industry.

Actually, the $2,000 limitation of liability is quite generous - I have seen them as low as $250.

The point that most of these alarm monitoring companies make is that they are not an insurance company and that they can't afford to take on massive amounts of liability for the relatively small amount of monitoring fees being paid monthly.

Several times one of my corporate clients have had this type of monitoring contract reviewed by their legal department prior to signing. In every case, the attorney went through the contract and marked up sections that he or she thought were unacceptable and required changing. And in every case the monitoring company came back and said no, they were not willing to make changes to their standard contract, and wouldn't budge one iota. It just wasn't worth it to them.

As all monitoring companies had basically the same attitude, these clients were left in a "take it or leave it" situation, and ended up signing a standard agreement unmodified.

Michael is right on, we don’t budge either. We do offer the opportunity for more liability on our part by signing a supplemental agreement with a higher monthly fee, it’s made clear that it is not insurance coverage.

In the old days when I had an alarm company a major celebrity had their attorney review the agreement. The "limits of liability" clause was a major issue and unacceptable. I also offered the option of additional insurance as a preventative measure to a legal battle. For $39.00 per month he wanted me to have liability for about 10 million in artwork and such. We finally settled on a 30 day termination ability so he could "show a win". People actually cancel their loss insurance after buying an alarm! Insurance premium $10,000.00 per year, alarm monitoring $600.00. Such a great deal.

"People actually cancel their loss insurance after buying an alarm! Insurance premium $10,000.00 per year, alarm monitoring $600.00. Such a great deal."

Is that the famous undisclosed 3 sarcasm or? Do people literally cancel loss insurance after getting an alarm?

I wish it was sarcasm. After a break in for whatever reason we were told that they no longer had insurance assuming the alarm company would be liable. Usually very small businesses.

Mr. Silva is closer to being right than wrong. 2k in some markets is quite generous. It really is not all that difficult to prove who dropped the ball given today's technology. Signal paths and date/time stamps are what they are. Integrator 2 has good points that we examined when we selected our Centrals to partner with. We do that work so our customers don't have to. Most don't know what to ask (although three redundant stations will eliminate some excellent partners; two is enough IMHO, respectfully). As for hiring the bottom of the barrel, I suppose I am fortunate. Those relative few I work with are not that way at all. They are highly trained and take their responsibilities very seriously. I find on the whole they are very good at what they do, but you have to be specific in your instructions and request. Customers need to be realistic in their expectations. More often than not, they put no money down, consciously agree to purchase a system that offers the bare minimum in detection and protection, pay the bare minimum for monitoring, but their expectations change dramatically when something goes wrong. At the end of the day, whether it is security, cars, homes or whatever else, you do get what you pay for.

A reputable company that offers quality products and services is being built to last beyond its founder; there are some that build its customer base around re-occurring revenue. The latter is being built to be sold.

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