Commercial Integrator + Security Sales March 2024 - 46

LEGAL BRIEFING by Ken Kirschenbaum
Central Stations and Dealer Agreements
IF YOU ARE AN ALARM DEALER, then the central
station you choose certainly represents one of the most
important decisions you'll have to make.
It's a marriage of sorts, and your central station becomes
(one hopes) a reliable " partner, " assisting you in more ways
than simply adequately monitoring your accounts.
Most good central stations treat their dealers like family,
maintain frequent contact, off er advice, and develop programs
to enhance dealer operations and monitoring experiences.
Some central stations off er conventions; others off er seminars
and webinars; perhaps they facilitate or host manufacturer
presentations. Some central stations
assist with billing or other dealer
operational issues.
At the very least, I think central
stations can be useful by insisting
that dealers engage in best practices,
including using proper contracts and
carrying proper E&O coverage.
getting consideration to come to a new central station, then it
may be appropriate to commit to exclusivity or an extended
term. However, most of the items in the Rider are going to
apply, and you may consider - you should consider! - some
absolutely essential.
Your approach is to get the Rider and then, aſt er making
sure the items pertain to you, present the Rider to the central
station.
You can tell them, " Do not change or modify your Dealer
Agreement. " What you want is for the Rider to be attached or
added, which supersedes the Dealer Agreement.
Of course, the Rider can be modiEvery
Dealer
Agreement is going
How to Protect Yourself
Every reputable central station requires
their dealers to sign a Dealer
Agreement. These agreements are
sometimes a K&K Dealer Agreement,
in which case I think you will at least
be able to read and understand it.
Other central stations have Dealer
Agreements draſt ed in-house or by their attorneys; frequently,
these Dealer Agreements are less readable.
However, one fact remains: Every Dealer Agreement is going
to be written for the primary benefi t and protection of the
central station - not the dealer. While the relationship starts
all warm and fuzzy, like a new marriage, rest assured that the
Dealer Agreement is more like a Prenuptial Agreement. And
you're the one getting the short end of the stick.
I get calls regularly to review the central station Dealer
Agreement for new alarm companies and those seeking a new
central station relationship. I've boiled the important, essential
issues down to 12 or so points and address them in a Rider to
the agreement.
You should, as you surmised, start with this Rider. The
Rider will open your eyes to what I assure you is addressed in
the Dealer Agreement, even if you haven't noticed it or didn't
understand it.
Some items might not apply to you. For example, if you're
to be written for the
primary benefi t and
protection of the
central station - not
the dealer.
fi ed to suit your deal with the central
station. But, if you use the Rider, you
will be going into the contractual relationship
with the central station with
eyes wide open.
Why You Need a Rider
At least one item in the Rider is, in
my opinion, a deal breaker - especially
if your central station engages
remote work-from-home operators.
Why? Because the presumption (a
pretty fair and reasonable one) is
that work-from-home operators
increase risk.
How does that impact you and the
Dealer Agreement? Every central station requires the dealer
to indemnify the central station. (This is just like the dealer
requires the subscriber to indemnify it, unless you change
that provision in your contract or, worse, don't have it in your
contract at all.)
Indemnity might be a reasonably calculated risk you can
take because you carry E&O coverage. (Stop reading now if you
don't and exit the alarm business altogether!) But you must
insist that the Dealer Agreement be modifi ed by limiting your
indemnity to your E&O coverage. Again, that is particularly
appropriate and important if your central station uses workfrom-home
operators.
One fi nal thought: If you really have found a central station
that doesn't use or require you to sign a Dealer Agreement, run
- don't walk. You are dealing with a stupid and irresponsible
central station. It isn't doing itself or you a favor by working on
a handshake. If it can't follow best practices for itself, it sure
isn't going to be helping you with your best practices. SSI
KEN KIRSCHENBAUM, an SSI Industry Hall of Famer, has been a recognized counsel to the alarm industry for 45 years and is principal
of Kirschenbaum & Kirschenbaum, P.C. He can be reached at ken@kirschenbaumesq.com. The opinions expressed in this column are not
necessarily those of SSI, and not intended as legal advice.
46 Commercial Integrator+Security Sales & Integration | March 2024

Commercial Integrator + Security Sales March 2024

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