Comments on non-working cameras preclude insurance claim coverage July 8, 2025

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Comments on non-working cameras preclude insurance claim coverage
July 8,  2025

Comments on non-working cameras preclude insurance claim coverage from article on June 25, 2025

Ken
   Regarding insurance companies requiring a security system. In Richmond, Virginia, we have the oldest fire underwriting insurance company in the US, a mutual company. Their pricing is so good that no one leaves them once they have a policy. Within the last year, they have notified all policy holders that at renewal, they would be required to have a monitored fire alarm system for any home that they value replacement cost to be over $1 million. The system can be as simple as RF smoke detectors connected to an all in one control. Below that valued home, they will discount for having one. There is no requirement to have a security system. Their rationale is that if you have a burglary, they will have a loss. If you have a fire, they will have a total loss. Also, since fire alarms are not armed by the resident, they know that it will be active when needed. Our entire family and employees have been members for years and to say the last, their referrals, have been great. I understand that in Virginia, the Farm Bureau Insurance has started the same requirement. I am sure that it will spread through the industry.
Stan Corn,
Alarms, Inc

Response

   I am sure other carriers have similar requirements. It's up to the customer to know what's required, not you.

another comment
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Ken,
   Thank you for the information and all you do for our industry.
   We are licensed and certified for all aspects of fire alarm and sprinkler/standpipe systems and this article shows the importance of proper documentation among other things.
   Not knowing how a subscribers insurance policy may be written leaves a void in how to word an issue we may find.
   Let's say the policy states "building has a sprinkler and/or fire alarm system" which leaves a lot of leeway in complying with vs "building has sprinkler and/or fire alarm system and system is maintained and fully operational". Still many issues of interpretation, is the system designed for the particular hazard? "Fire alarm system", what is included, one pull station connected to a panel and a bell or horn is a fire alarm but probably not the intention of the policy. Many gray areas just in what the policy may require and then add how it will be interpreted.
   We have a subscriber since 2001, when we signed the original K&K agreement. The building's chief engineer said he wants every thing to do with the fire alarm, sprinkler/standpipe systems and fire extinguishers to be compliant and working. He also expected us at the building within 4 hours if there was a problem and to work through until the system(s) fully back to normal. Over the years the chief engineers have changed; I think we are on our fifth or sixth now. Along with changing the people, their views of what they expect have changed. The current chief engineer, now called the facility director, takes our reports which list problems, issues, deficiencies, etc. and does two thing: puts them in a book ready for inspection and forwards a list of the issues, problems, etc. to someone else and declares he has done his part. Example, their fire pump, a very critical component of the sprinkler and standpipe system, had a bad circuit breaker (problem resetting it) later to fail open (no power). Nothing was getting done to repair it; noted on our inspection forms for months with many other items, large print and highlighted, many emails sent and acknowledged. FDNY was also notified.
   They received word that the State was due to be there for inspection, all of a sudden the engineer wanted inspection reports without listing the issues and problems, he said, I can't show what you gave me to an Inspector, I said, fix the problems.
   Your article brings up the fact that an insurance claim "may" be denied if the terms of the policy are not met, which could be issues we have noted on reports.
   What language could we include on our reports to highlight the possibility the subscribers insurance could be in jeopardy if the issues are not corrected, maybe the statement may result in a faster resolution? In the past you cautioned about making something sound like a threat, so I ask, what verbiage can we add?
Thank you,
Jeff

Response

   You may be assuming more responsibility than you actually have, or at least have to. The more responsibility you undertake the more responsible you can become. The point of your Kirschenbaum Contracts TM is to limit your exposure, reduce your risk, and that is done by defining your responsibilities, as well as what you are not responsible for. If you have a contract but then go beyond the confines of the contract you risk exposure. In your case you are using the Fire All in One for the alarm system and the Fire Protection All in One for the sprinkler system.
   Regarding changing your reports, that's obviously something you should not do. But it's possible that your reports contain information or statements that are actually gratuitous and unnecessary.
   Use of the terms Fire Alarm System or Fire Sprinkler System are of course vague and could mean a lot of things. If the systems are to code then simply stating that fact is sufficient. If the systems are not to code then it would be best to specify what was inspected and what deficiencies are noted. If the system is described in detail on plans or in contracts then you can reference those other documents. Otherwise, if systems are not to code you probably should have a disclaimer on your report that you "make no representation that system inspected is to code and you are not specifying all components tested, but whatever is installed is either working or not." If whoever is reading the report isn't happy then tell them to get the system to code, and it's probably not your job to let them know why it's not to code, if that's what you believe, or cost to get it to code, unless they are engaging you for the job.
   You are also not required to read the customer's insurance policy, unless of course you have agreed to do that. You should provide a report in form required by a nationally recognized laboratory, such as NFPA, or at least custom and practice, or as required by the AHJ in your jurisdiction. But don't go beyond what is called for and required. You have to be mindful that you are not the AHJ, you are not charged with responsibility to ensure the regulatory authorities do their job properly or at all. You are in charge of, and responsible for, your job, and that responsibility is found in your contract, or should be.
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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