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Joined: Jan 2003
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Maintenance or service contracts are somewhat of a controversial topic in the phone trade. There are those like myself who don't believe in them. Customers are better off paying for service when and if they need it judging by our observation that once installed, very little will go wrong. With a contract we believe that they will call for every little thing tying up our time and costing us money.
Then there are those who push contracts to all their customers. With every customer paying a monthly fee they do make money but they need a large customer base and additional employees.
I really don't know what you are talking about- How do you do your insurance audits on phone accounts if you don't have contracts in place, you do phone work without contracts, and without error and ommisions coverages?
Of course we have a contract with the customer for all installation work. Never heard of anyone in this trade with errors and omissions coverage. Normally such things are covered in the contract fine print.
-Hal I have no idea how your are insured, but the error and omissions, is not a fine print item, it's the basic of any libality policy for communications installation and service work, I never hears of anyone, in the business without it. Insurance for the communication business is nothing like any other insurance. It sounds like your not insured, for this type of work. Bottom line is none of the underwriters that write insurance for phone, or connuminications work, will insure you unless you are under contract with the account for maintance.
Last edited by LK; 10/09/07 12:48 AM.
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Joined: Jan 2005
Posts: 135
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Maintenance or service contracts are somewhat of a controversial topic in the phone trade. There are those like myself who don't believe in them. Customers are better off paying for service when and if they need it judging by our observation that once installed, very little will go wrong. With a contract we believe that they will call for every little thing tying up our time and costing us money.
Then there are those who push contracts to all their customers. With every customer paying a monthly fee they do make money but they need a large customer base and additional employees.
I really don't know what you are talking about- How do you do your insurance audits on phone accounts if you don't have contracts in place, you do phone work without contracts, and without error and ommisions coverages?
Of course we have a contract with the customer for all installation work. Never heard of anyone in this trade with errors and omissions coverage. Normally such things are covered in the contract fine print.
-Hal Hal, It depends on the nature of the facility, for example a small travel agency probably won't benefit from a maintenance agreement as they will almost never need service, but a large facility that has multiple repairs day in, day out may actually make out by having a maintenance agreement. Even an onsite tech can be justified so that the troubles get dealt with quickly. Sometimes later on or tomorrow is just not good enough, it needs to work NOW.
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Joined: Jul 2004
Posts: 9,931 Likes: 34
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M/As can be a huge cash cow for the maintainer. The trick is getting enough business to support your staff, parts etc and then being sure you are priced right. IBM used to be a "lease only" business, then the government made them sell their equipment in the 70s. It turned out they were making a lot more money in the M/A business than they did with the leases and they were not carrying all that rapidly depreciating inventory.
The business went away when things lasted longer without a call than their useful life. We installed a water cooled 3090 (old time mainframe) in Ft Myers that ran for 5 years and never had a call. That M/A was pure gravy.
Greg Fretwell
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Joined: Dec 2003
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have no idea how your are insured, but the error and omissions, is not a fine print item, it's the basic of any libality policy for communications installation and service work, I never hears of anyone, in the business without it.
Insurance for the communication business is nothing like any other insurance. It sounds like your not insured, for this type of work.
Bottom line is none of the underwriters that write insurance for phone, or connuminications work, will insure you unless you are under contract with the account for maintance.
I have NEVER heard of a telecom contractor having to carry E&O insurance and it rediculous to think that they would have to make every customer carry a maintenance/service contract just for that coverage.
Our contract that the customer signs clearly limits our liability. We are not liable for incidental or consequential damages which is what E&O would fall under. About all they could get us for is the actual cost of the work that we screwed up.
I think you are confusing us with a construction trade.
-Hal
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Joined: Jul 2004
Posts: 9,931 Likes: 34
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I guess you can either buy E&O insurance or buy a good enough lawyer to have an iron clad contract and the legal muscle to back it up. ... or just be too poor to sue 
Greg Fretwell
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Joined: Dec 2003
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Don't you think that if it was as big an issue as you make it everybody would have coverage and my insurance agent would recommend it?
Truth is insurance carriers aren't real happy to provide E&O coverage for piddly stuff like programming errors or service interruptions that a customer may make a big deal out of, especially if they know the vendor has E&O coverage and they stand to collect. Disputes like that happen all too frequently and are typical of what we can expect in this business. Far better to put it in your contract then tell them where to go.
-Hal
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Joined: Jul 2004
Posts: 9,931 Likes: 34
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Florida just started requiring E&O insurance for inspectors. Glad I am out of that mess.
Greg Fretwell
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Posts: 43
Joined: September 2013
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