Although there is lots of business for insurance brokers in the security services marketplace, you need a key formula that works for the benefit of the insured, as well as the knowledge to tackle a diverse market becoming oversaturated with providers like alarm installers. South West Group has been underwriting security services since 1998 and continues to expand as the needs of the insureds continue to diversify. The landscape has become somewhat easier to sell into because regulatory bodies are insisting on $2m liability limits with failure to perform coverage listed as standard, which makes the product far easier to sell. But education and experience runs deeper, and brokers need to know that if their client is an alarm installers entering people’s homes, the need to have crime coverage as well. Claims examples from South West Group show how claims can stack up, including significant expenses to defend if a client isn’t keeping their proper documentation. “One key element that brokers and clients don’t really understand,” says Colleen Bliss, senior underwriter for South Western Insurance Group, is that when clients apply for security services cover, the application is quite long. “But we need to find out what the exposures are. We ask the same questions every year but often things come up that they don’t think of as an exposure,” she says. “We also need contracts and a paper trail outlining who is responsible for what. Otherwise it’s very difficult to protect the insured. We really need to have contracts in place and need to have an idea of the scope of the work outlining what is and isn’t provided.” Example Installer was doing work for a condominium renovation. After insured left premises sprinkler head discharged causing water damage. No evidence that the sprinkler head was installed incorrectly, but insured contracted drywallers to complete the renovation. The drywallers may have accidentally knocked the sprinkler head. Drywallers were paid in cash & had no insurance. Sprinkler Installer was found responsible for 50% of loss settlement. Amount of Loss: $153,687 Claims Expenses: $12,479
