KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Indiana Court Enforces Ins policy - denies fire loss coverage; Powerful Sales Tool for Alarm and Fire Protection Dealers
July 30, 2026
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Indiana Court Enforces Ins policy - denies fire loss coverage; Powerful Sales Tool for Alarm and Fire Protection Dealers
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Building owner loses coverage and case against fire insurance carrier because of failure to provide notice that sprinkler system was out of repair, which notice was required by the policy within 48 hours of the system becoming inoperable. The Indiana Court of Appeals has issued a significant decision that every alarm company, fire alarm dealer, sprinkler contractor, and integrated systems provider should use as a sales tool. In Garvin Street Warehouse, LLC v. Bridgeway Insurance Company, et al., 2026 WL 2036318 (Ind. Ct. App. July 15, 2026), the court upheld an insurer's denial of coverage after a warehouse owner failed to comply with a Protective Safeguards Endorsement ("PSE") contained in its property insurance policy requiring maintaining a fire protection system and notifying the carrier within 48 hours that it was out of service. Here the insured property owner did not notify the carrier until the fire loss, though as you will see below, it was relatively short time from the system failure, fire and notice. The court spend most of its decision addressing whether the failure to give timely notice of a loss should be equated with failure to comply with unambiguous contractual provisions in the insurance contract requiring notice; in the former though there is a presumption of prejudice if there is a late notice, in the latter case there is no need for the carrier to plead or prove prejudice. The court treated the notice provision as a “condition precedent” to coverage, though the majority decision doesn’t use that term, the concurring opinion does.
The lesson is simple: If your customer's insurance policy requires alarm or protective systems, those systems must be installed, maintained, monitored, and kept operational. Failure to do so can result in a complete denial of insurance coverage after a loss.
Here the warehouse owner maintained property insurance covering its facility. As is common with commercial property policies, the insurance policy contained a Protective Safeguards Endorsement requiring the insured to maintain an automatic sprinkler system.
A maintenance contractor discovered that one of the twenty risers in Garvin's warehouse sprinkler system was frozen and broken. On December 27, 2022, the contractor met with a sprinkler services company, which was unable to complete the repairs at that time. The repairs were rescheduled for January 2, 2023. On December 31, 2022, the warehouse caught fire and was destroyed.
The insurance policy endorsement required the insured to notify the insurance carrier if the impairment was not corrected within 48 hours. The insured never gave that notice. Before repairs were completed, the building caught fire and was destroyed. The insured submitted a claim. The insurers denied coverage.
The owner argued that the insurers should not be permitted to deny coverage unless they could prove that they were actually prejudiced by the failure to receive notice of the sprinkler impairment. The court held that the Protective Safeguards Endorsement was clear and enforceable. The policy stated that the insurer would not pay for fire damage if the insured knew of an impairment to the sprinkler system and failed to notify the insurer. Perhaps the most important language in the opinion is the court's conclusion that Protective Safeguards Endorsements are conditions of coverage and that prejudice is simply not part of the analysis.
Why this case should matter to alarm, security, fire protection and low voltage integrators:
Many alarm dealers still encounter customers who view alarm systems, fire alarm systems, sprinkler supervision, monitoring, inspection programs, testing contracts, and service agreements as optional expenses. This case demonstrates why they are not optional. Commercial property insurance policies frequently contain requirements relating to:
Automatic sprinkler systems
Central station fire alarm monitoring
Burglar alarm systems
Water flow supervision
Fire pumps
Watch services
Other protective safeguards
Insurers often offer coverage and set premiums based on the assumption that these systems are in place and functioning. The Indiana court specifically noted that protective safeguards endorsements are commonly used because insurers provide coverage and premium structures based upon the existence and maintenance of those protections. When those protections disappear, the insurer's risk changes dramatically. This can be used as a valuable sales tool. Of course, you need to have the appropriate contract to offer your customer, and that will almost always be the K&K All in One, whether for residential, commercial security or commercial fire. The All in One will cover installation, repair service and monitoring, one or more of which may be required by law or insurance coverage. Alarm companies should not hesitate to discuss this issue with customers. The conversation is not fearmongering. It is risk management. A commercial customer who refuses recommended monitoring, inspection, testing, service, maintenance, repair, or system upgrades should understand the potential consequences, and you should be insisting that the customer sign the Disclaimer Notice where you specify the issues.
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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
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