We look forward to opening your newsletter every morning. We use your contracts and find them to be an ideal product.
    I imagine many of your readers find themselves with concerns similar to mine or they have in the past. We all start out as a small business struggling to survive until the next job or flurry of monitoring payments. What used to be jobs of a few hundred or a couple thousand dollars in private homes has evolved into jobs worth tens of thousands and more in large buildings valued at tens of millions of dollars. While it was not one of my clients, the recent fire in Edgewater NJ, has caught the eye of everyone in the industry.
    This was a multi unit building with what was proven to be an in-effective sprinkler system which did not contain the fire. Over a thousand people left homeless and a 100 million dollar building a total loss. This may of not been my client but many of my clients are very similar multi unit buildings. Actually, I am quoting a new project for this same company which owns Edgewater right now. During a recent conversation with John Drucker, he mentioned how many contractors are being looked at very closely for construction violations at this location and this fire may be causing codes to change. Even though I have been in business almost 40 years and I have never experienced a claim or had a need to test the durability of the Ken Kirschenbaum contract, I am loosing sleep over this. With out regard to what the contract has in place to minimize our liability I fear that in such instance we will find our company involved in lawsuit from not only the property owner but also hundreds of put-out tenants. I lost more sleep when I came to knowledge that Mr Kirschenbaum does have warm fuzzy feelings for our insurance company (s). 
    Our policy renewal occurs in a few months and I have contacted SARRG to discuss their product. Unfortunately, I do not feel as if I am really finding good answers to my concerns there either. How much coverage do I really need? Some of our target clients demand certain amounts of coverage to do business but that it their requirement. How can I determine my requirement? I certainly am not insuring the building and to have a liability limit of 100 million to do business is beyond the scope of good business sense but what does make sense? I wonder if the maximum amount SARRG is able to write is enough. How much do I really need? Maybe the amount requested by our clients is even more than I really need or maybe it is not nearly enough. I understand how it is difficult for the insurance agent to sit on both sides of the fence but I feel that I am playing a guessing game here and I am entirely unable to make a proper decision. I fear whatever I do will have some excessive consequence. I will either pay more premium then I need to or someday I might learn the hard way that my insurance was less than adequate.   
    Please help me get some sleep.
Steven in New Jersey
    In response to SG's questions regarding SARRG I would like to add some information for him to consider, and feel free to post this or pass it onto Bart at that company. We used SARRG for a few years but had to change to another carrier. While the insurance met our needs the service did not.COI's took too long to get. We had to make several phone calls in order to receive responses on anything, and each time we needed quotes or updated insurance the lag time was unbelievably long. However, the biggest challenge (and the straw that broke the camels back) was their inability to get the COI to our State on time.
    Each year Washington State suspended our license because the staff at SARRG did not provide proof of renewed insurance to our State contractors department. This was unacceptable, and the last time it happened we cancelled the policy and went with someone else. We even tried to work with SARRG to get this done correctly, but each year, they messed it up and we were suspended until the COI was received by the State.  While they may save money in the short term, the risk to running my company unlicensed and/or scrambling about to get COI's (which delayed jobs and payments) was ust not worth the hassle.
   In speaking with Bart from SARRG I need to make a correction for clarification regarding my earlier email. Please thank Bart for calling me and talking about the issue. The challenges we had were specifically with Beecher Carlson which as Bart explained is not SARRG, but the underwriting company for SARRG.  It was that company that caused our challenges.  There were actually many issues with Beecher Carlson, too many to go into now, but as I mentioned to Bart, maybe we were the exception and not the rule.   If anyone else has issues with Beecher Carlson, Bart seemed truly interested to know because it reflects on his company and may perhaps be losing him business.
    Unfortunately in the alarm business it's going to be hard to carry all of the insurance that could potentially be needed.  The fire loss is one example, and a good one.  But don't think that because you don't do fire you aren't exposed to more liability than your insurance covers.  Best you can do is minimize your risk by

  • doing professional work
  • maintain a professional relationship with your customer
  • comply with code and AHJ requirements
  • comply with manufacturer requirements
  • comply with independent laboratory guidelines
  • use the Standard All in One Agreements
  • carry E&O alarm industry insurance

    Dealing with insurance companies can be as frustrating as dealing with most other service businesses.  So getting the information you need and the best price for premium or additional certificates for certificate holders or additional insureds may not be the best part of your day.  My recommendation for an E&O carrier is based much less on those issues than how that carry handles a claim.  As I recently mentioned, none of the frustrating issues included above are likely to disturb your sleep.  However, a lawsuit against you where you have to spend an inordinate amount of time or face damages exeeding your coverage will cause more than loss of sleep.  Probably be good for weight loss, or weight gain, depending on how you deal with stress.  If you have Sarrg then it's Bart who will have the stress, not you, for the most part.
    You pitch for SARRG pretty hard, yet the fact remains that they are rated lower by AM Best than is often required of managed contracts for commercial buildings. Last I looked, SA was B++ while the last big project we did required an A or better.  I believe this refers to the credit worthiness of the carrier.
Tom in Washington
    Pitch?  I am not on salary or commission and don't even get a thank you.  
    You are right that SARRG is not an admitted carrier and does not have a Best A rating, and if that is a requirement in any agreement you have with a subscriber [which means you are not using the Standard Form Agreements - your first mistake] that requires specific insurance then you'll need a different E&O carrier.  I've made it clear that the reason I support SARRG [and a few other carriers] is because of the way they handle claims and relate to their alarm company insureds.  That should be a paramount concern to you, but not the only one, and if you have certain insurance requirements you have to meet then be all means be sure to use a carrier who can satisfy the criteria.