Reprinted from The Local Ringer
Official Publication of the
Southern California Security Association
© 2010 Glenn M. Gottlieb
All rights reserved.
contractors' state license law vs. alarm company act - whose contract?
Glenn M. Gottlieb
You are a security company bidding or working on a big job on
a new construction site. The general contractor comes to you
and says you need to sign “his” subcontract. What do you do?
One problem is that the contractor’s contract does not contain
a limitation of liability or third party indemnification clause, as
does the standard security alarm system agreement. In fact,
the standard general contractor’s contract usually has
provisions requiring the subcontractor to indemnify the
contractor for any problems arising out of the subcontractor’s work. This could potentially expose you to exactly the types of
liability alarm companies attempt to avoid.
From a licensing standpoint, the general contractor is licensed
to subcontract to anyone holding a “lesser” (specialty) license
under the Contractors’ State License Law (“CSLL”). However,
Section 7054 of the CSLL provides an exemption for “any
person who performs work in the installation, maintenance,
monitoring, selling, alteration, or servicing of alarm systems, as
defined in [the Alarm Company Act], and who holds an alarm
company operator’s license issued [under the Alarm Company
Act].” Since an ACO license is not governed by the CSLL, the
contractor cannot legally subcontract to an ACO. (Note this
does not apply to work on fire systems, which does require a
C-10 license under the CSLL, and can be subcontracted.)
Furthermore, general contractors and their employees are not
subject to the extensive background checks required of alarm
companies and their employees. Any felony, misdemeanor or
even serious traffic violation(s) may be cause to lose an ACO,
ACQ or ACE license. So by attempting to have you sign his
contract as a sub, the general is, in effect, “taking
responsibility” for the security system, and could be subjecting
himself to potential liability if anything went wrong with the
system, or to censure by the Contractors State License Board
for improperly contracting with a licensee with whom he is not licensed to contract.
The correct answer is for the general contractor to sign the
alarm company's contract either as the developer/owner of the
project, or as agent for the owner, for all work on the alarm
system. This includes any pre-wiring intended in the future to
be used for a security alarm system.
In practical terms, it may be easier to sign the general
contractor's contract also, to make him (and his insurance
carrier) “happy.” But you may want to inform him that by
signing your contract, it may also give him protection in case
any of the other tradesmen discloses any confidential
information about the design or layout of the security system.
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