Whether you are relatively new to the alarm industry or have been in the business for a generation (or more), you can’t help but notice that the industry seems to be changing at a rapid pace these days.
An explosion of new technology in and around the industry means new products and new ways of providing service to our customers, which means new avenues for generating RMR and new risks that you need to be aware of. Here are some of the newest trends in alarm monitoring and their implications for alarm providers.
Mobile, digital and the “Internet of Things.” Technological advances – especially in communications – has led to a move away from traditional monitoring over telephone lines to monitoring that takes advantage of digital, wireless and cellular communications to provide better, more reliable and more convenient monitoring to your customers. In addition, the “Internet of Things” – the concept that common household objects (among other things) are increasingly connected (or able to be connected) to the Internet and to transmit and receive more and different data. This means a dramatic increase in the sophistication of the products and services we can offer, including video, access control, home automation and energy management and remote control of systems from computers and mobile devices, for example.
Data, privacy and cyber-security. Big data is big news. The headlines are full of reports of big-name companies (Target, Neiman Marcus, Hilton and eBay to name a few) suffering data breaches that impact tens of millions of customers’ personal or financial information. But data, privacy and cyber-security are not only the concern of
Fortune 500 companies. Even security providers that provide more traditional alarm monitoring services likely collect keep and use both personal and financial information from their customers. And the more sophisticated – and Internet-connected – the products and services you offer, the more data you likely have access to. Services that have a cloud-based component have their own benefits, challenges and risks as well. (For more information on cyber-security, read our
blog post here).
What does this all mean?
The influx of new technology, products and services means that many of the ways in which alarm providers have done business in the past may no longer be effective and may leave you open to greater risks and liabilities. Two specific areas in which new technology may impact your business are your contracts and your insurance needs.
New contracts. Your contracts with your customers are the single most important factor in safeguarding your RMR, protecting your company, and ensuring that you receive the best value for your accounts when you are ready to sell. Your agreement should not only cover the products and services you are offering, it should have updated provisions to provide you the most protection from legal and financial liabilities. Read more about the importance of valid and enforceable subscriber agreements in our
blog post. In addition, your contract with your central station must also adequately reflect the services you are offering to your customers and the monitoring services that you have contracted for.
New insurance needs. One of the most important ways that you can protect your company is through an appropriate risk management program that includes the right amount – and type – of insurance coverage. While most commercial general liability policies cover basic business risks, they don’t provide complete coverage for all of the risks you face in today’s sophisticated monitoring market. You might need additional forms of insurance, such as cyber-security coverage (generally excluded from commercial general liability coverage), incidental or insured contracts coverage, professional liability coverage, for example. Consult with an insurance professional that works in the alarm industry to determine the right type and amount of insurance you need. You can learn more about making sure you have the right insurance coverage for your business in our webinar
Security Business Risk – Are You Liable?
The rapid pace of change in technology has significantly impacted the alarm industry. It’s not your father’s alarm industry anymore! (With thanks to industry lawyer Eric Pritchard).
Read more of his thoughts on legal trends in monitoring.
