Weekly Roundup – Limitation of Liability Clause and What You Need to Know

THE LIMITATION OF LIABILITY CLAUSE IN OUR INDUSTRY CONTRACTS IS SERIOUS STUFF. HERE
ARE FIVE THINGS TO CONSIDER BEFORE YIELDING TO A CUSTOMER’S REQUEST TO STRIKE OR
MODIFY THE LIMITATION OF LIABILITY CLAUSE:
1. Does your insurance policy prohibit you from striking or modifying it?
2. Will you be in breach of your Dealer Agreement with your monitoring station if
you strike or modify it?
3. Do you have enough insurance (including umbrella coverage) to cover a loss that
is not capped by a Limitation of Liability clause?
4. Is your business incorporated so only the assets of your business (and not your
personal assets) are at risk for any loss above your insurance limits and not otherwise
capped by a Limitation of Liability clause?
5. Whether the business opportunity is worth putting your entire business at risk
(yes – striking or modifying your Limitation of Liability clause can put your entire
business at risk).
MICHAEL J. REVNESS, ESQ. is the founder of AlarmLegal.com, and a founding partner at the law firm of KURTZ & REVNESS, P.C. Please contact me at michael.revness@kandrlaw.com or 610-688-2855 if I can be of assistance with the drafting security alarm contracts, purchase or sale of security alarm accounts or other related security industry legal services.
This article is for information purposes only and does not constitute, and should not be relied upon as, legal advice.