Contract terminology makes all the difference. It’s what causes the judge to scrutinize the contract and often surprise one or both sides of a case with what the judge thinks the contract means. A recent inquiry regarding a word used in our Residential All in One and Commercial All in One standard form alarm contracts questioned the use of the word “insure” when used in the inspection provision.
That provision imposes on the alarm company the duty to “make an annual inspection of the security system. Inspection service includes testing of all components to insure proper working order.” The question is should the word be insure or ensure? What do you think?
The dictionary defines insure as: 1) to provide or obtain insurance on, or 2) to make certain, especially by taking necessary measures and precautions. So the second meaning may apply, though inspections don’t “make certain.”
The definition of ensure is: to make sure, certain, or safe; guarantee. I’m pretty certain you don’t intend to “make certain or guarantee” anything in your inspection. But the dictionary had further instruction that is helpful. Here’s what I found:
Ensure, insure, assure, and secure mean to make a thing or person sure. Ensure, insure, and assure are interchangeable in many contexts where they indicate the making certain or inevitable of an outcome. However, ensure may imply a virtual guarantee (e.g. The government has ensured the safety of the refugees.) Insure sometimes stresses the taking of necessary measures beforehand (e.g. Careful planning should insure the success of the party.). And assure distinctively implies the removal of doubt and suspense from a person’s mind (e.g. I assure you that no harm will be done.). Secure implies action taken to guard against attack or loss (e.g. They sent reinforcements to secure their position.).
Our standard form alarm contracts will continue to use “insure” since “ensure” implies virtual guarantee, “assure” implies removal of doubt, and “insure” stresses taking necessary measures. I suppose “secure” might work as well. But to insure the best protection, make sure you use a completion certificate after the inspection (and every installation and service call), which is the subscriber’s acknowledgement that the system was working and operational when you left.
Keeping with this verbiage theme, I was recently asked if it is possible for an alarm company to increase its liability by having the wrong wording on its yard signs and window decals. Is there anything in particular that should be avoided?
Creating expectations that aren’t realistic or even intended by using terminology like “absolute protection”; “total protection”; “guaranteed protection”; “24-hour protection”; or “round-the-clock protection” can, in fact, increase your liability exposure. I bet all of these are in use and you can probably send in a lot more that convey an even greater sense of (false) security. The problem, of course, is we know an alarm company cannot guarantee loss. And no alarm firm intends its system to prevent loss, but merely to detect and, at most, be used as a preventative measure without assurance of no loss. Your contract better make that very clear.
Now if the above terms are the name of the company that’s certainly better than if the words are used as a description of the services. I don’t think you need to run out and change your name because it uses words that would cross the line if used to describe the services. The law still recognizes the difference between puffery and representations and warranties.
Ken Kirschenbaum has been a recognized counsel to the alarm industry for 35 years and is principal of Kirschenbaum & Kirschenbaum, P.C.. His team of attorneys, which includes daughter Jennifer, specialize in transactional, defense litigation, regulatory compliance and collection matters.
The opinions expressed in this column are not necessarily those of SSI, and not intended as legal advice.