For those still not in the know, Mike Kelly is an insurance broker with expertise and specialty in alarm insurance.  He is a proponent of cyber liability insurance, which is not included in the typical alarm E&O policy.  Any questions, call Mike, he loves to talk about this insurance and why you need it, or attend his webinar on Sept 2.  Mike, thanks for contributing to this forum.

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 Friends & Colleagues;

 Update;   “Electronic Data” is NOT ( GL or Property)  “Tangible Property”;

Broker Beware: Why you should NOT rely on commercial general liability policy or traditional property policy to get coverage for security or privacy breaches.

    New Case  Filed July 23, 2010 Eyeblaster, Inc. Plaintiff – Appellant, V. Federal Insurance Company, Defendant ---- - Cites to the AOL v.. ST Paul Insurance  2003 case---“Data is NOT GL Tangible Property”

    A Computer user sued Eyeblaster, alleging that Eyeblaster injured his computer, software, and data after he visited as Eyeblaster website.  Eyeblaster tendered the defense of the lawsuit to Federal Insurance Company seeking coverage under a General Liability and Errors or Omissions Liability policy.  Federal Insurance denied that it had a duty to defend  Eyeblaster  , the district count entered a summary judgment in favor of Federal Insurance.    The district court relied on AOL v.St, Paula Mercury Insurance Company, 347 F.3d89(4th Cir. 2003) in which AOL software package had “altered the customers” existing  software, disrupted their network connections, caused them loss of stored data, and caused the operating systems to crash.  The Complaint would have had to make a claim for physical injury to the hardware in order to have coverage for “physical injury to tangible property” .  –Computer Data is not tangible property under a General Liability Policy.

    In another case Ward General Insurance Services v. Employers Fire Insurance, The court of appeals in 2003 held that  “Electronic Data” is not considered tangible property in the context of a PROPERTY POLICY. 

    Please save the date; Sept 2, 2010 at 3PM ET ---I will  have a Webinar on “The Cyber Risk—Fears and Myths” .   Hats off to the CSAA - the event sponsor------more info to follow.

Mike Kelly

www.ISPINSURANCE.NET

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Comment on run away signals

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Hey Ken:

    I'm writing to respond to Bob Gamble's response. 

    Bob, I can see how you would be upset by our action BUT, we informed the police department what the issue was and that their alarm was becoming a nuisance.  Perhaps I didn't clarify that we only did that on the one account that kept going off repeatedly and we were NOT able to get the dealer to service that alarm system.  We are VERY aware of dispatching the police department and try extremely hard to only call them when we need to.  In my example, the police department helped us which in turn helped THEM because they could stop by the residence and let them know the alarm system is malfunctioning and it needs to be repaired.  I DO NOT make it a practice of calling the police department for no reason.  My example worked just as intended, the police department made contact with the owner (owner had no idea the alarm was going off) and they were able to get the alarm repaired.

Regards,

Chris

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comment on residential fire

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Ken,

    The issue regarding household fire warning is simple, wireless smoke detectors rely on a single power source, a battery. If it goes dead, despite a trouble signal at the panel, the detector is inoperative. Essentially we're back to battery operated smoke detection and the issue of a single power source and changing batteries which research has shown to be problematic.

    On the other hand a wired low voltage household fire alarm system supplies both primary power and backup power to the detectors. A typical control panel contains a centrally located 3-5 yr rechargeable battery. If the primary source of power fails the system runs on batteries for a minimum of 24 hrs. If the secondary battery fails, a trouble is annunciated but the system runs on primary power indefinitely.

    Hardwired systems present a superior level of performance..

Here's what the code sections say.

    2006 IRC/NJ R313.1 Smoke detection and notification.

    All smoke alarms shall be listed in accordance with UL 217 and installed in accordance with the provisions of this code and the household fire warning equipment provisions of NFPA 72.

    Household fire alarm systems installed in accordance with NFPA 72 that include smoke alarms, or a combination of smoke detector and audible notification device INSTALLED AS REQUIRED BY THIS SECTION FOR SMOKE

ALARMS, SHALL BE PERMITTED. The household fire alarm system shall provide the same level of smoke detection and alarm as required by this section for smoke alarms in the event the fire alarm panel is removed or

the system is not connected to a central station.

    R313.3 Power source.

    In new construction, the required smoke alarms shall RECEIVE THEIR PRIMARY POWER FROM THE BUILDING WIRING when such wiring is served from a commercial source, AND WHEN PRIMARY POWER IS INTERRUPTED, SHALL RECEIVE POWER FROM A BATTERY. Wiring shall be permanent and without a disconnecting switch other than those required for overcurrent protection.

    2009 IRC/NJ R314.2 Smoke Detection Systems

    Household fire alarm systems installed in accordance with NFPA 72 that include smoke alarms, or a combination of smoke detector and audible notification device INSTALLED AS REQUIRED BY THIS SECTION FOR SMOKE ALARMS, shall be permitted.

    R314.4 Power source. SMOKE ALARMS SHALL RECEIVE THEIR PRIMARY POWER FROM THE BUILDING WIRING when such wiring is served from a commercial source, AND WHEN PRIMARY POWER IS INTERRUPTED, SHALL RECEIVE POWER FROM A BATTERY.

Hope that helps,

John Drucker, CET

Fire Protection Subcode Official

Fire/Building/Electrical Inspector

New Jersey

The opinion expressed herein does not represent that of any governmental agency.