SWG SECURE: Offering Specialized Coverage for Home Monitoring Systems

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

Siren

Keypad

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.

Coverage Highlights:

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.


Sources:

1. https://www150.statcan.gc.ca/n1/pub/85-002-x/2020001/article/00010-eng.htm

2. https://www.security.org/home-security-systems/what-is-a-home-security-system/