“When we talk about security-based businesses,” said Colleen Bliss, senior underwriter, security services program, South Western Insurance Group Limited, “we’re talking about alarm installers, security guards, private investigators, and alarm monitoring stations. It is businesses who are responsible for another business’ security.”
Because their responsibilities are very specific, their coverage needs are as well.
“The main coverage that this industry requires is what we call failure-to-perform coverage,” Bliss said. “In a typical commercial general liability policy, this coverage is either not included or else it remains silent, as we put it. This means it may or may not be included depending on the particulars of the claim that is reported.”
Security-based businesses are looking for failure-to-perform coverage in their policies.
“Most people in the industry recognize that they will require the failure-to-perform coverage,” Bliss said, “If they are associated with some professional organization, they will. Alarm installers, for example, will join CANASA (Canadian Security Association), and they will learn what coverage they need.”
Bliss went on to explain that South Western Insurance Group Limited has a completely different approach to these types of policies than some other companies.
“In our policies, our wording has been manuscripted specifically for this industry,” she said, “and it includes the failure-to-perform coverage up to the same limit that commercial general liability is providing.”
This emphasis on the needs of the industry is one of the keys to the strength of South Western Insurance Group Limited in this arena.
“We’ve been underwriting for the security industry for well over ten years,” Bliss said. “We know what we’re looking for. We know what we’re writing. That experience and knowledge is really important when you’re a broker placing your client’s business with a company.”
An example of a failure-to-perform claim will explain the concept further.
“An alarm installer, for example, may install an alarm that fails to recognize a fire,” Bliss said. “The company suffers damage. They may lose all their contents and all their stock. That’s a third-party suffering as a result of the insured’s alarm not working. In this case, coverage would apply to replace everything that’s lost. It’s a third-party coverage, essentially.”
Another particular area of commercial security coverage involves the vulnerability of key-based security.
“Our commercial liability coverage includes lost key coverage up to a limit of $50,000,” Bliss said. “There have been quite a few claims where a guard is on duty, working at a concierge desk, for example, at a condo. The guard is watching over the building and has access to keys to certain areas of the condos. Sometimes ,these keys go missing. When this is a master set of keys, it is very expensive to re-key and replace the keys. That would be a lot of out of pocket money to pay if the guards somehow misplaced their keys.”
South Western Insurance Group Limited is prepared to cover this and other needs of security-based businesses.