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Looking at these factors, it is likely a court would find an alarm company has a duty to warn regarding alarm system use with VoIP:

Probability of Harm - the probability of harm is high. The problems with alarm transmission with VoIP are widely known in the industry. And, VoIP telephone service is becoming more and more popular—particularly because it is typically a lower cost option than traditional phone service.

Gravity of Resulting Injury - People get alarm systems to protect themselves and their property from serious events such as fire, burglary, and sometimes, as in the case I wrote about above, even deranged individuals intent on murder. If the alarm system does not transmit a signal, then obviously grave harm can occur.

Burden of Precautions - The burden is your time and money spent in getting a warning out to your customers.

This burden is relatively low compared with the probability of harm and the gravity of the injury.

You can fulfill this duty by providing your customers a written warning that contains the following information:

For new customers, the sales person should explain this information and have the customer sign the written warning at the time of sale. You should also consider adding a provision to the customer’s contract with this information.

For existing customers, the written warning could be mailed separately or inserted in the customer’s bill. You should also put this warning on your company’s website if you have one.

The time, effort, and money it takes to get this warning out to your customers will be well worth it if you are involved in a lawsuit, or even a potential lawsuit. And, on the upside, this could present additional opportunities for your company to sell cellular or radio back-up products and services.

Smartly, the installing alarm company in the case I wrote about above had provided the woman a notice when the alarm was sold, and had her sign it, warning that the alarm system may not work with VoIP and that should she switch phone service, she must notify the alarm company. Tragically, she did not heed the warning.

Copyright © 2009 Wendy M. Canaday, Flynn, Gaskins & Bennett, LLP

Wendy Canaday is an attorney who defends alarm companies and manufacturers nationwide in state and federal court. She can be reached at her law firm, Flynn, Gaskins & Bennett, LLP, at wcanaday@flynngaskins.com or 612-333-9519.

2009 Vol. 3

www.alarm.org

NBFAA Newsline

45

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