With the security services industry becoming saturated, providers are forced to diversify to remain competitive in their industry. But this diversity exposes service providers to greater risks.
Guards may offer parking enforcement. Private Investigators may handle process serving. But the extent of services provided may well extend beyond the typical. Alarm installers are now offering non-security related operations such as home automation, according to Colleen Bliss, senior underwriter for South Western Insurance Group, because the installation is similar enough but rather than security includes centralized control of lighting, dimmers and other electrical devices such as home theatre/entertainment systems and audio/video systems.
On the flip side, typical electricians may offer a portion of alarm installation to broaden their business in which case Failure to Perform coverage is now required.
Bliss says that South Western is trying to accommodate as many operations as it can under one policy, but it is crucial that all operations are communicated to the broker and the insurer to ensure acceptability.
“So for an electrician, other electrical work is typically fine. But we’ve had providers doing contracted construction work – and not just a little drilling – but putting in flooring and all kinds of renovations,” Bliss says.
“Standard markets may elect to exclude a portion of a company’s operations, in which case two policies would be required,” and brokers need to be aware of this.