April 14, 2021
Canada’s security industry offers a variety of personal, technical, and digital services to protect people and property. South Western Group provides tailored coverage based on deep expertise in the security industry - covering everything from installers, to manufacturers, to security guards, to private investigators.
Home monitoring systems are a submarket within the security industry for which SWG offers specialized coverage. Stats Canada reports more than 1.5 million incidents of property crime and more than 150,000 cases of breaking and entering every year, and the rate of such crimes has risen over the last three years. (1) The increasing case for effective home security gives brokers an opportunity to ensure security companies are adequately covered with the right insurance policy. Read on to learn more about this market and its insurance needs.
What Is A Home Monitoring System?
A home monitoring or home security system is a group of physical electronics working together to protect a home from physical threats or danger. Often it will consist of the following components:
● 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
Some systems also come with services like 24/7 professional monitoring; and cellular, landline, or battery backup in case of a power outage.
Contrary to popular belief, alarm systems are rarely connected directly to emergency dispatch centers. Instead, an alert goes to the alarm company’s monitoring center, which determines whether emergency services need to be called. When a monitoring center receives an alert, they typically place a call to the home number on file. If that call is answered, the center employee asks for a password or “safe word” to confirm that the person is not under duress. If the call is not answered or the safe word is not given, the monitoring center would then contact the appropriate emergency services dispatch center, whether for police, fire, or medical assistance. (2)
What Liability Risks Exist for Security Companies Offering Home Monitoring Systems?
Security companies are hired by homeowners for their monitoring, emergency response, emergency reporting, and maintenance services. Should robbers break and enter a home, the security company could be held liable under certain circumstances. Even if the security company is not at fault, a lawsuit would still cost them legal fees as they defend themselves in court. Following are some reasons a security company might be held liable:
● Upon routine inspection of the security system, the security company fails to identify problems or potential security exposures (e.g. a blindspot where a burglar could break in undetected by cameras)
● Miscommunication or lack of communication between the security company and the homeowner/key holders (e.g. failure to get in touch with the homeowner about service problems or failures), which leads to stolen property
● A client, employee, or contractor is injured while installing, fixing, or inspecting part of the home monitoring system
● Security equipment malfunctions (e.g. smoke detector failing to go off)
In the event of a service failure, the legal consequences could 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:
● 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.