March 30, 2022
Canadian security companies offer a range of personal, technical, and digital services to protect people and property. Based on deep security industry expertise, South Western Group provides tailored coverage across the board - from installers to manufacturers to security guards and private investigators. SWG provides specialized coverage for home monitoring systems as a submarket within the security industry.
Property crimes are one of the largest causes of crime, and the first four months of the year are historically the peak period for this type of crime. (1) Each year, Stats Canada reports around 1.5 million property crimes and 150,000 breaking and entering cases. While the rate of such crimes had increased from 2017 to 2019, police saw a significant decrease (-8%) in property crime reports in 2020. In particular, police-reported breaking and entering decreased by 16 percent, theft of $5,000 or less decreased by 20 percent, and robbery decreased by 18 percent. (1)
Now would be a good time for brokers to check in on their clients' home security coverage. Keep reading to find out more about the insurance needs of this market.
How Does A Home Monitoring System Work?
A home monitoring system or home security system is a set of physical electronics that work together to protect a home from physical harm. These features include:
● Security camera
● Motion sensor
● Entry sensor
● Glass break sensor
● Key fob
● Panic button
● Base station
● Yard sign and/or window stickers
● Smoke and carbon monoxide detectors
In addition to 24/7 professional monitoring, some systems also feature cellular backup, landline backup, or battery backup.
Alarm systems are very rarely connected directly to emergency dispatch centers, contrary to popular belief. Monitoring centers determine whether emergency services need to be dispatched based on alerts sent to the alarm company. A monitoring center usually calls the home number on file when it receives an alert. Upon answering, the center employee asks for a password or "safe word" to ensure the person is not under duress. As soon as the call is not answered or the safe word is not given, the monitoring center contacts the appropriate emergency services dispatch center for police, fire, or medical assistance. (2)
What are the Liability Risks for Security Companies that Offer Home Monitoring Services?
In addition to monitoring, emergency response, emergency reporting, and maintenance services, homeowners hire security companies. When robbers break into a home, the security company may be held liable under certain circumstances. Regardless of whether the security company is at fault, they will still have to pay legal fees as they defend themselves in court. A security company can be held responsible for the following:
● The security company does not identify potential problems or security exposures (e.g., blindspots where a burglar could enter undetected by the cameras) on its regular inspection of the security system.
● A lack of communication between the security company and the homeowner/key holder (e.g. not contacting the homeowner about service problems), which results in stolen property
● Installation, repair, or inspection of a home monitoring system results in an injury to a client, employee, or contractor
● A malfunctioning security device (e.g. a smoke detector that does not go off)
If a service fails, the legal consequences may be irreversible.
About SWG SECURE’s Specialized Coverage for Home Security Systems
SWG SECURE Security Services Insurance provides coverage not normally offered by traditional insurers. Businesses that provide security guard services, private investigators, alarm systems, and locksmiths as well as others requiring entry to private living quarters, need a unique type of protection.
Our program takes into account all factors relevant to your client’s situation, helping to avoid unpleasant surprises down the road. You can trust us to evaluate the complete risk picture, offering coverage for all potential exposures, including failure to perform, design errors and omissions, bodily injury, advertising liability, legal expenses, property damage, and a host of other circumstances.
You may have turned down this type of high-risk client in the past, but with South Western Group’s support, you can provide a wide range of coverage options at fair and competitive prices.
Commercial General Liability (Occurrence Form):
● Failure to Perform
● No General Aggregate Limit
● Contractors Errors & Omissions
● Personal Injury
● Bodily Injury and Property Damage – Broad Form
● Intentional Injury in Defense of Personal Property
● Fire Extinguishing Agent Release
● Products & Completed Operations
● Care, Custody and Control
● Legal Expense & Defense Cost Reimbursement – $25,000 Each Occurrence; $25,000 Annual Aggregate
● Advertising Liability
● Non-Owned Auto (including physical damage)
● Incidental Malpractice
● Contingent Employers Liability
● Employee Benefits Liability – Claims Made – $1,000,000 Limit
● Employees as Additional Insureds
● Tenants Legal Liability – $250,000 Sub-Limit
● Lost Key Cover – $50,000 Sub-limit
● Product Recall Extension – $25,000
● Medical Payments – $25,000 each person; $25,000 each accident
● Limited Pollution Liability Extension $1,000,000 Each Occurrence & Aggregate
● Blanket Additional Insured’s Clause
● Owners and Contractors Protective coverage
Other Coverages Available:
● Property Insurance
● Business Interruption - Profits/Gross Earnings/Extra Expense
● Crime Coverage – Employee Dishonesty – Form A
● Fidelity – third party feature
● Employee Benefits Liability
● Employers Liability
● Mechanical Breakdown
● Errors and Omissions – Claims Made - $250,000 Limit Each Occurrence; $250,000 Annual Aggregate (higher limits available)
We Also Cover:
● Alarm and Security Installers
● Monitoring Stations
● Portable and Fixed Fire Suppression Systems
● Private Investigators
● Security Guards
Visit the SWG product page for more information.
Content is current as of the date of broadcast and is subject to change without notice.