KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** additional insured coverage v contractual limitation of liability August 27, 2026 ********************* additional insured coverage v contractual limitation of liability ********************* Ken, Shawn Iverson did a great write up in the August 17, 2926 article, but it does not fully clear up the confusion- Below is our additional insured endorsement. It specifically states in item 2 that if coverage provided to the additional insured is required by a contract or agreement, the insurance afforded to such additional insured will not be broader than that which we are required by the contract or agreement to provide for such additional insured. My question is this. With that language written into the endorsement, and with your contract specifically spelling out our limits of liability, wouldn't that mean the customer is effectively not getting any additional insured coverage? And if they are getting additional insured coverage, isn't it limited to the terms of your agreement, assuming that is the only agreement that has been signed by the customer? Also, does “your work” below mean monitoring too? **** ADDITIONAL INSURED – OWNERS, LESSEES OR CONTRACTORS – COMPLETED OPERATIONS This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Organization(s) Information required to complete this Schedule, if not shown above, will be shown in the Declarations. A. Section II – Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the SCHEDULE, but only with respect to liability for “bodily injury” or “property damage” caused, in whole or in part, by “your work” performed for that additional insured and included in the “products-completed operations hazard”. However: 1. The insurance afforded to such additional insured only applies to the extent permitted by law; and 2. If coverage provided to the additional insured is required by a contract or agreement, the insurance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured. Roman ************************ Response ************************ I think Roman's original question identifies a legitimate problem, but I would not answer it by saying that a $250 contractual limitation automatically means the customer's additional insured coverage is $250. The better answer is that the contractual limitation of liability and the additional insured coverage are separate concepts. The contract determines the alarm company's contractual liability to the customer. The insurance policy and endorsement determine what insurance coverage is available to the alarm company and to the additional insured. The "not broader than" language in the AI endorsement has to be read carefully. It can limit the scope of the additional insured coverage where the contract requires AI coverage, but I don't think we should automatically turn a contractual $250 limitation into a $250 insurance limit. And, as usual, there is one final caveat: the actual policy and the actual contract have to be read together. Insurance policies are not written to make the K&K contract meaningless, and the K&K contract is not written to rewrite the insurance policy. That's why I would want to see the exact Insurance Procurement provision in the contract, the exact Limitation of Liability provision, and the complete AI endorsement before I would tell an alarm company exactly what coverage its customer is getting. Of course E&O carries that routine issue Certificates of Insurance with additional insured status need to be very careful what the contract calls for. The E&O carries would be making a mistake thinking that the contract being referred to is the K&K Contract, because that contract will not require additional insured coverage. That means that the insured has signed another contract that requires the coverage, and I wonder how often alarm companies send their broker the actual contract requiring the coverage. E&O carries are not going to be happy insuring your customers for their losses; it's not what your carrier signed on for when it considered you for insurance coverage and requested a copy of your contract form before approving you for coverage. ******************* STANDARD FORMS Alarm / Security / Fire and related Agreements. click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** ALARM ARTICLES: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles updated daily ******************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our Email List / Email Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
