February 2000 Handshake I-dition
The I-dition (Internet Edition) of the Handshake does not always include all articles published in the printed edition
The President's Corner
Roy Pollack, CPP SET
Alone we can accomplish little, Together we can achieve a lot. – Helen Keller
After 18 months of negotiating, revising and meeting; the Palm Beach County Commission passed the proposed ordinance (which is going to take effect March 1st). But… they agreed to review the effectiveness within 6 months of its enactment. Alarm company leaders came together to fight for a common cause and goal, and spoke with a single unified message, depicting true teamwork and fellowship. Much to the chagrin of these people the changes were approved. Special recognition has to be given to these individuals that devoted so much time and energy to this project: Bernie Fox, ADT; Bill Zeller, Mellon Security; Robert Leone, Security Systems; Bill Gustafson, Brinks Home Security; and Bob Worthy, Secur-Technologies.
For those people that felt it was unimportant to get involved because this was a local issue, I received an email from Salt Lake City about the new ordinance and the provisions. Not only was the individual aware of the changes, but also aware that Palm Beach County has one of the best false alarm rates in the country. And because it is known that the alarm companies and the Sheriff’s office work together and have lowered the rates, other jurisdictions are looking at this ordinance and how it can work for them.
At the Annual Convention and Seminar in October the membership approved renewing the AAF’s affiliation with the NBFAA. After 3 months of negotiations with the leadership of that organization, the Board of Directors approved a much-revised contract than what was first submitted by the NBFAA. This new agreement, one that will become the standard for all CSA’s across the country, provides much more freedoms to the AAF and a better balance with regards to financial issues. It was a pleasure negotiating the changes with Brad Shipp, Executive Director of the NBFAA. Nearly every one of the changes we requested was approved, simply because they were reasonable and made sense for both parties.
The first FASA/BASA course will be held in March and a full training schedule will be published for each region. A number of regions have held their first meeting with integrated free CE training.
In Broward and Dade Counties, the turnout was exceptional! The AAF is updating its computer and badging systems to better serve the members.
Please bear with our staff as we continue to sort through boxes and boxes of files and records. We are also updating the membership list on the web site with our own search engine for consumers. This will make it easy for potential customers to find members in their home territory.
For up to date member information, check the AAF’s web page regularly: www.fla-alarms.org. Certain portions of the web page are now protected by passwords. If you are a paid member, please contact the office to receive your access code.
What would you like to see from the AAF? Contact any member of the Board , or Bob Neely at the AAF office. Give them your ideas, give them your complaints. We’re listening to what you have to say.
Do you have email? If not, you are not receiving a lot of the timely information that the office sends out on a regular basis. Send me a note at email@example.com and I’ll add you to the list.
From the Director's Chair…
As of January it is now official. The Alarm Association of Florida is a Chartered State Association of the National Burglar and Fire Alarm Association. There was a proposal to rejoin NBFAA and the membership voted to do so last October. At the request of the Board of Directors, our State President, Roy Pollack and our legal counsel were instructed to negotiate the contract for the best possible terms. This they did with great deliberation and a tremendous amount of hard work. We have a contract that may be proposed as a model for the remainder of those states still deliberating whether or not to join.
Why rejoin at this time? As with all important business decisions, this august body chose to deliberate and negotiate before making the decision, and at some cost in popularity. None the less they did so with all due respect and regard for the members and their interests.
The time is right today to pool our resources at the local and national level. We face much more difficult issues affecting alarm businesses every day than ever before in our history. Recently we have had no less than three different counties pass financially restrictive ordinances upon our members that have had more impact than King George's tea tax. The NBFAA stepped to the plate and contributed money and resources to the fight.
These ordinances are constitutionally flawed (just as the state attorney general has rendered concerning county registration) but will require months of legal battle through the courts before they are overturned. We cannot as businesses (or even as individual associations) withstand this kind of repeated and punitive onslaught. We must band together to fight these oppressive and illegal taxes.
Not all is bad news. NBFAA offers a series of member benefits which come to the table as cost savings to our alarm dealers in the way of insurance, software, debt collection, payroll services, communications and advertising, customized newsletters and discounts on deliveries and car rentals.
As we proceed into this next century we will need all the resources at the regional and national level we can muster to better make our way successfully. At this moment the NBFAA is one more powerful tool to turn the tide in this struggle. In paying your dues, please do not hesitate and respond quickly and affirmatively. It will benefit you in the short and long term.
Bob Neely Executive Director
Alarm Association of Florida, Inc.
Insurance With Assurance
Should alarm dealers ask their monitoring companies for a Certificate of Insurance?
Definitely! Most of the time, alarm dealers are the ones asked to provide proof of insurance, commonly called Certificates of Insurance. Those are issued on a regular basis at no charge. However, all too often, the alarm dealer - probably because he is so used to being the one to supply Certificates of Insurance to builders and subscribers - fails to ask for a Certificate of Insurance for himself from his primary independent subcontractor, his monitoring company.
From an insurance standpoint, the monitoring company is an independent contractor who has been subcontracted by the alarm dealer to provide monitoring services as a third party. That’s explicitly clear through the monitoring agreement that the dealer has with the subscriber. Even in the arrangement where the dealer has a sales and service agreement with the subscriber and the contract is directly with the monitoring company, the monitoring company is still the third party independent contractor providing subcontract monitoring services to that subscriber.
If that were the case, then why would an alarm dealer not request a Certificate of Insurance from the monitoring company?
We raise the question for several reasons. One, believe it or not, we have run across several instances where monitoring companies do not have Errors & Omissions Insurance. Two, a current updated Certificate of Insurance from your monitoring company every year assures you that if a claim, or potential claim, arises, you know not only that they have insurance, but also the name of the insurance carrier who would be responding to the claim.
The certificate should specifically state that there is “Errors & Omissions” coverage. Without that wording then you should contact the monitoring company to make sure it wasn’t an error on the part of the insurance agency. If not, then you should change monitoring companies immediately.
Another thing to look for is whether or not they have limits of liability of at least one million dollars per occurrence and two million dollars aggregate. That’s the same limit that most alarm dealers carry today so there’s no reason that the monitoring companies should have any less. In fact, they should probably be carrying substantially more.
Also take a look at the quality of the insurance company providing coverage. An “Admitted” company has to be licensed and have their rates and forms filed and approved by the insurance department in the state that they are doing business. That provides the insurance department with the clout and authority to oversee that particular “Admitted
company’s performance and, if necessary, to intercede in a claim dispute. A non-admitted excess and surplus lines company does not have to file their rates and forms with the insurance department in the state that they are doing business. And, the insurance department has no regulatory authority over them. You want to make sure that the insurance company is an Admitted “A” rated carrier.
In fact, next time you negotiate with a monitoring company to monitor your accounts, part of the negotiation process should include getting a proper certificate of insurance from them.
Then, with a proper Certificate of Insurance in hand from each of your monitoring companies showing they have E&O Coverage and adequate policy limits provided by an “A” rated, Admitted insurance company, you can rest assured that claims will be properly covered.
Rick Janis is a Certified Insurance Counselor. He is responsible for developing and managing a comprehensive insurance and bonding program for alarm dealers and monitoring companies through CIGNA Insurance Companies. He is CEU certified by NBFAA and gives CEU courses to the alarm industry on General Liability/Errors and Omissions and Worker’s Compensation. He can be reached at 800-474-0933 or by fax at 800-240-0631.
John Williams is a Licensed Insurance Consultant as well as Senior Vice President for S.H. Smith and Company. He may be reached at 800-356-0168.
Do you have an insurance question for Rick and John? Fax your question to 800-240-0631. You may also e-mail it to firstname.lastname@example.org.
AAF REGIONAL REPORTS
Norman Mugford, Regional Director
The January 11th meeting was called to order at 7:30 p.m. by Norman Mugford. The Pledge of Allegiance and prayer were dispensed with since the meeting was held in an open area restaurant. There were no minutes from the December meeting since it was an informal meeting.
The main topic of discussion was on training. The dates for the CE maintenance classes are as follows: February - Workers Compensation, March - Business Practices, April - Business Practices and May - Safety. These classes will be one hour each giving you a total of 4 credits towards your license renewal. BASA/FASA classes have been approved, but no dates and locations are set up as yet. We are in the process of putting together additional classes for the Alarm System Agent. More information will be forthcoming.
The question of dues for the NBFAA was brought up. The yearly dues are $125. At the present time, since the AAF joined as a Charter State, it is an all or nothing membership.
Meeting dates to remember: January 18 & 19 ECLB meeting in Tallahassee, March 15 & 16 ECLB meeting in Orlando and Feb 5 AAF Board meeting in Jacksonville.
Our sincere thanks are offered to Systems Depot and Silmar who donated door prizes. The prizes were awarded to Bob Newhoff, Jeff Budd, John Sheridan, Joe Hassan and Norm Mugford. The 50/50 drawing totaled $40, $20 went to Mike Harmon. With no further business at hand, a motion was made and seconded to adjourn the meeting at 8:45 p.m.
Mary Galloway, Regional Director
The January 12th meeting was called to order at 7: 15 p.m. with 22 people in attendance. The meeting location was discussed. Options included a hotel meeting room, Steak & Ale or a conference room some place like ADI. It was decided to keep the meeting at the Steak and Ale.
CE requirements were discussed. Each one-hour credit course will be duplicated so if you miss one you can make it up but you must complete 4 one hour sessions to receive the certificate and credit.
We are now a Charter Member of the NBFAA and Mary told us about the benefits and discounts available on such things as credit cards, rental cars etc.
Lauderdale Lakes is trying to pass a false alarm ordinance. Ron Walters gave all of the details. For instance, a false alarm with a tech on the job is a $50 fine, for a problem account with many false alarms - the installing company will receive a letter stating the problem needs repair, the company has to respond within 14 days or there is a $250 fine. This ordinance applies to burglar and fire alarms.
In reference to the Palm Beach County Ordinance, the Sheriff found 500 alarm companies doing business in Palm Beach County and only 250 had the proper licensing. Further details of the ordinance were discussed.
It was a general consensus that having officials at the meetings would be beneficial to the group for feedback on both burglar and fire issues. In Miami Dade you are required to have your trucks lettered or a ticket will be issued to the driver. 3" letters stating the company name, address, phone number and license number are required.
AAF President Roy Pollack gave the group an overview of the Association, where we are and where we are going.
The 50/50 drawing of $25 was won by Martin Paikin of Ropac, a Doorguard access control was won by Mike McGrath, and a $25 tool was won by Ron Walters.
The meeting was adjourned at 9:30 p.m.
West Palm Beach
Joe Holfelner, Regional Director
The January 13th meeting was held at the Picadilly Cafeteria and was called to order at 7:00 p.m. Joe gave an update on the BASA/FASA classes.
New member, Dave Fertel from Sun Security was welcomed.
A discussion was held regarding letters being sent out from the Palm Beach Sheriff's office requesting alarm users to register their alarms with their alarm company's name listed. Many members brought up the fact that alarm users are listing their companies as the monitoring company even though they don't monitor that homeowner's alarm system anymore. It was recommended that all alarm companies get a current list of systems that are registered listing them as the monitoring company from the Sheriff's office. Once a list is obtained it can be edited for corrections and sent back to the Sheriff's office for corrections in their database.
At 7:30 p.m. a (1) credit hour CE class on "Workplace Safety" was given by Roy Pollack.
The 50/50 drawing of $20, $10, $5 and $2 was won by Roy Pollack, Bill Pringle, and Simon Plummer (twice).
Prior to the close of the meeting, roy Pollack gave an update on the financial status of the AAF and the meeting was adjourned.
Ron A. LaFontaine,
HOW YOUR COLLECTION
AGENCY CAN WORK FOR YOU
To run a successful business, you have to solve many puzzles. One of the hardest is how to collect money from customers who don't pay their bills.
Many businesses turn to collection agencies for help. Although most of these agencies provide assistance, results often don't meet expectations. That's because agencies have limitations, such as low recovery rates, substantial fees, and lengthy time periods between the recovery of funds and payments to creditors. Nationwide, collection agencies recover only 15 to 20 percent of delinquent accounts. They then keep 33 to 50 percent of the recovered money as the collection fee.
The low success rate is due to the fact that agencies are not given the accounts that are relatively easy to collect - about 90 to 120 days past due. Instead, clients hand over accounts that are more than 242 days - or eight months - past due, according to the American Collectors Association. Most clients think it's not cost effective to give accounts to outside agencies if there is any chance of recovering them in house. Only after clients have used their own collection skills, and failed, are agencies given the opportunity to collect these delinquent accounts.
Clients also expect collection agencies to try to collect bills with small balances (less than $500), but agencies can't afford to do this. Generally, agencies spend little time with lower-balance accounts and concentrate on the larger ones that will produce greater profit.
Advantages of Fixed-Fee Agencies
If these scenarios sound all too familiar, there is another option. Consider using a collection agency with a fixed-fee charge instead of a percentage fee. Normally, the fixed fee is a one-time charge of $20 or less per account, regardless of the size of the balance.
There are three main advantages to using a fixed-fee agency:
q Clients who give large-balance accounts to agencies in fixed-fee arrangements do so much earlier than when those arrangements are based on a percentage of what is collected. (These agencies do not keep large percentages of the recovered money, so clients can and do feel free to use them as soon as in-house procedures start to fail.) Since fixed-fee agencies receive accounts while they are still highly recoverable (90 to 120 days past due), recovery rates often can be double those of percentage arrangements.
q Since their profit margin is the same regardless of account size, fixed-fee agencies will make as much effort to collect smaller balances as they will larger ones.
q Because fixed-fee agencies receive no part of recovered money, the funds are sent directly to the clients, which increases cash flow.
Regardless of whether you decide on a fixed-fee or percentage fee collection agency, choose one that reports to at least one national credit bureau - or preferably all three (TRW, TransUnion, and Equifax).
The information in this article is provided by National Credit Systems, a fixed-fee collection agency and an ACA business affinity partner. For more information, contact Nancy Hano at 800 569-1901 ext. 1467.
CENTRAL FLORIDA REGION ADDS NEW AREA CODE
The new area code - 321 - will be serving customers previously served by 407 in the Central Florida Region. All of Orange, Osceola, Seminole and parts of Lake and Volusia Counties (excluding Debary) are affected. Existing Central Florida Region customers in the 407 area code will not have to change their area code but new customers assigned telephone numbers after January 1, 2000 will be assigned - 321.
Note: Brevard County customers' area code will change from 407 to 321; however, local 7-digit dialing will remain the same. The new area code will overlay the existing 407 area code in the Central Florida Region. Therefore, customers in the affected area dialing local numbers will have to change to dialing 10 digits - the area code and the number. You do not dial "1" or "0" before dialing locals calls only the 10 digits.
Local calling rates are not affected by the change. Special services using 3 digits like "911" or "411" will remain the same.
It will be necessary to leave the full 10-digit number (area code + 7digits) when leaving message for return calls.
OTHER NEW AREA CODES
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