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How Bad Publicity From Alarm Company Lawsuits Affects You

Negative publicity about a lawsuit involving one of your competitors in the alarm business not only hurts that company, but damages the electronic security industry’s reputation.

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I recently came across an article stating that a Palm Beach, Fla.-based jewelry store had filed a lawsuit against ADT, claiming fraud and breach of contract.

In the lawsuit, the plaintiff claims that it paid $1,200 for an alarm system and $300 a month for monitoring and service. When burglars broke into the store, the plaintiffs claim the alarm system “didn’t work” despite the intruders staying inside the store for hours. As a result, the jewelry store lost a million dollars in inventory.

For its part, ADT is standing by its contract terms.

Of course, everyone in the alarm business loves to hear a good lawsuit story about ADT — well, except ADT. After all, the firm is hit with lawsuits all the time. But should the alarm industry find that odd? Not at all, as ADT should expect a large proportion of losses and claims because it has a large number of subscribers.

Despite all your efforts and precautions, you need to remember that like ADT, you, too, are exposed. That said, you should expect a loss and lawsuit sooner or later.

However, when you hear about such lawsuits against ADT, have you ever wondered how the publicity of alarm failures and lawsuits affect your business? Let’s be honest, the negative exposure is not good for ADT, and it certainly isn’t positive for the alarm industry as a whole.

So, what does this mean for you? Many alarm companies have not faced any lawsuits nor have they experienced a subscriber claiming a loss because an alarm didn’t work. Still, that shouldn’t give you a reason to rest on your laurels and be lulled into a false sense of security, that your service, your central station, your technicians and your systems, and your luck, is a step above everyone else’s. Au contraire.

Despite all your efforts and precautions, you need to remember that like ADT, you, too, are exposed. That said, you should expect a loss and lawsuit sooner or later. Therefore, prepare yourself for the inevitable by having a proper contract in place and adequate insurance backing you up. It is imperative that you annually review your operational policies, contracts, relationship with vendors, central stations and insurance coverage. If not, you might soon find that your day of reckoning is coming.



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Article Topics
Business Management · Blogs · ADT · Lawsuits · Managing Your Business · All Topics

About the Author
Ken Kirschenbaum
Security Sales & Integration’s “Legal Briefing” columnist 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.
Contact Ken Kirschenbaum:
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