Question:

I recently installed an environmental zone for a customer on a piece of equipment that can’t be without power for more than 15 minutes before major action needs to be taken. After I installed it, he called me and said he had a power failure and did not get a call from the central station for quite some time.

I called the central station to see what happened and they stated environmental zones are put at the bottom of the list, and during the hour of failure, they had 300 calls so my customer only got called after more than one hour had passed.

Am I liable for a case like this?

Answer:

There are a number of interesting issues raised in the question. One of my very first alarm defense cases comes to mind. An alarm company monitored lobster tanks in a wholesale lobster facility. Water circulation stopped and the lobsters died. I won that lawsuit based on the exculpatory and limitation of liability provisions. It was the alarm dealer — not the central station — that was sued.

[ASIDE: I know a water circulation alarm isn’t really an environmental alarm in the strictest sense, but it reminded me of this case. END OF ASIDE.]

The dealer is the one that sold the alarm, designed it and agreed to monitor it. The subscriber probably only knows of the dealer even if a central station contract was signed. Subscribers think of their dealer, not the central station, and that’s the way the dealers usually want it. In this case, the dealer knew about the importance and sensitivity of the environmental alarm system. It’s not described in the question but could be an area that must remain sterile, germ free, smoke free, oxygen level or other atmospheric combination maintained, who knows. Failure of the system and central station’s response time could have cost who knows how much money and perhaps lives as well. Where am I going with this? The dealer, I think, has the first and foremost obligation to let the central station know what is being monitored, how it’s to be monitored and what priority to give alarm signals. Here, it appears the dealer is surprised by the central’s policy on priority of response.

The dealer’s concern for liability is well founded, for two reasons. The dealer will find himself in the middle, squeezed by both the subscriber, or its insurance carrier, and the central station, or its insurance carrier. Why? Because the subscriber is going to look to the dealer with whom it has its contract. The central station is going to rely on its contract with the dealer, which is going to require the dealer to indemnify the central in the event the dealer’s subscriber sues the central.

If the dealer has a Standard Form Contract with the subscriber, then liability can be avoided. This, of course, doesn’t help with customer relations, but this alarm and the loss may have been during a time when “act of god” defenses — or excuses — may apply. As I write this article, I am just beginning to recover from Hurricane Sandy here on Long Island. Entire neighborhoods were wiped out and most of the area lost electric. Although I don’t know of any central stations in the affected area that went dark, alarm monitoring and police response was not possible. Neither you nor the central station will be liable for delayed alarm response when acts of god prevent effective monitoring.

It’s important for dealers to have effective communication with their subscribers and their central station. Certainly, a dealer needs to know the central station’s policy on monitoring priority and how signals are responded to. A dealer who specializes in environmental alarms needs a central station that prioritizes those signals. Central stations also have an obligation to understand the kind of alarms that are being monitored, and I think all reputable central stations do understand this and provide proper monitoring.

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