You should not be in the alarm business without proper errors and omissions
insurance. The potential for litigation is far too risky and the cost of
defense, not to mention the possibility of losing the case, is enormous. Errors
and omissions insurance in the alarm business is not only affordable, it's
cheap. Be certain you are getting your insurance through an established program
that understands the alarm and security industry. If you have any doubt,
contact me immediately.
Once you have errors and omissions insurance you need to be sure that the
coverage is as broad as your services. Years ago most alarm companies provided
alarm service and that was it. Then some started with central vacuum. Then
lighting, audio -- video, home entertainment systems, home automation. No doubt
I have left out several other popular or entrepreneurial endeavors. The
question is, does your E&O carrier cover these other services?
More than likely the general liability part of your coverage will cover any
type of work you do unless specifically excluded. But the "professional"
liability or E&O coverage may be limited to the stated business activity, and
that may be defined as alarm or security related work and services. Mistakes
made in other areas may not be covered.
What should you do now? Contact your insurance broker and let them know what
services you provide to subscriber/customers and find out if your policy for
general liability and errors and omissions covers you for all of the
activities. If it doesn't then decide if you need coverage for those
activities, whether the carrier will broaden its coverage for those activities
and if the additional premium, if any, is worth the coverage.