More on having the right ins coverage / Comment on raising limitation of liability and your carrier’s position March 15, 2019

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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More on having the right ins coverage / Comment on raising limitation of liability and your carrier’s position 
March 15, 2019
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Notice:  I'll be at ISC West in April.  Call our Concierge Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304 to arrange a private meeting and consultation.  Meetings and consults will be No Charge during the ISC show.
I will also be scheduling meet and greet times at a few central station booths in the exhibition hall.  That schedule will be posted here soon.
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More on having the right insurance coverage
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Ken,
            This is in response to the jewelry store example.
            I’m glad you brought up consulting.  It is this very distinction of consulting vs installation that requires alarm contractors to carry PROFESSIONAL LIABILITY in addition to general liability insurance.  As there can be a “gray” area on where these two coverages line up, it is much simpler to carry them on a combined policy.  
            General liability is intended to cover you for claims of physical injury to people or damage to property arising from your daily operations – i.e: drilling through a waterline or putting a hole in the wall.  
            Professional liability covers negligence related to professional services (ie: consulting or design re alarm systems) – it is generally driven more by financial loss than physical loss.  
            In the example of the jewelry store – no injuries and (outside of the wall – which wasn’t caused by the alarm installer) no property damage – simply the financial loss of the jewelry. 
Best Regards, 
Crystal Jacobs, RPLU
usrisk@securityamericarrg.com
(866) 315-3838
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Response
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            You actually raise another interesting problem.  Idiot claims representatives that understand that loss of property, stolen in a burglary, does trigger an occurrence and damages for purposes of a claim, at least in an alarm company E&O insurance policy.  I have had to argue this issue more than a few times with claims representatives.  While I always managed to get the coverage, it was shocking that there was even an issue.  There was a burglar alarm system, failed, burglary and goods stolen.  Lawsuit brought.  Carrier representative sends a Denial Letter because there was no occurrence or property damage.  He thought there had to be something broken; stolen didn’t qualify.
            Make sure you have the right coverage and make sure you’re consulting with a broker who knows the alarm industry, not your friend.  Stick with The Alarm Exchange listings for insurance companies and brokers.
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Comment on raising limitation of liability and your carrier’s position
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 Ken,
             In my experience there’s no particular insurance carrier issuing liability policies to alarm companies that consistently contain a limiting endorsement that excludes coverage for jobs done without their standard contract present.  I’ve seen policies from the same insurers issued both with and without that exclusion, so it seems that it’s an endorsement that maybe an untrained underwriter or broker might allow to be present, rather than a specific insurer that’s trying to avoid coverage.
            When an alarm company brings us their policy to review, and it’s one of those rare occasions where we find they have that type of exclusionary endorsement, the first priority becomes helping them get it removed or replace the policy.  They just shouldn’t be stuck with that type of limitation of coverage.
Larry St John, CIC, CRM
Eclipse Marketing & Insurance Services
lstjohn@eclipseinsurance.com
707.469.6776 x102 
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Response
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            I agree; that exclusionary endorsement or provision is not common, though insurance carriers would be smart to insist on it.  It’s odd that you think it’s an untrained underwriter or broker who allowed that provision.  Actually it would be an astute underwriter.  The real problem is the broker.  Alarm companies think that brokers work for them.  That may not be the case.  While a broker is usually an agent of the alarm company, the broker’s customer, the broker works with insurance carriers closely.  Bringing customers that have claims reflects poorly on the broker.  Where I am going with this is, a broker may actually know the effect of the exclusionary endorsement and care more about his or her relationship with the carrier than with the customer alarm company.  Too cynical?  I’m not so sure.
            For obvious reasons no alarm company should accept a policy with an exclusionary endorsement, at least not when policies are available to the industry without such endorsement.
            Stick with brokers on The Alarm Exchange.  And, let me know if any of them disagree.
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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
516 747 6700
www.KirschenbaumEsq.com