Would I be okay omitting the provision requiring the subscriber to name the alarm company as additional insured from your agreement? Customer has an issue with naming us as additional insured. Here is the provision:
INSURANCE: The Subscriber shall maintain a policy of public liability, property damage, burglary and theft insurance under which ALARM CO and the Subscriber are named as insured, and under which the insurer agrees to indemnify and hold ALARM CO harmless from and against all costs, expenses, including attorneys’ fees and liability arising out of or based upon any and all claims, injuries and damages arising under this Agreement, including, but not limited to, those claims, injuries and damages contributed to by ALARM CO’s negligent performance to any degree or its failure to perform any obligation. [Kirschebaum Contracts TM, Copyright]
Will Fleenor
Fleenor Security Systems
Johnson City, TN 
    This is one of the more common objections, fueled I think by brokers who try to discourage their customers from adding additional insureds to the policy, or laziness or ignorance.  The short answer is that if the subscriber leaves the other protective provisions as is then you can omit this one.  That's one of the reasons for several protective provisions and separating them in the agreement.  Often you see alarm agreements drafted by others who have one comprehensive protective provision.  Not only does that obscure the provisions but once the subscriber decides to challenge the provisions more than likely the entire paragraph will be challenged.
    If the subscriber adds you as an additional insured then its insurance company will not be able to sue you in subrogation because a carrier can't sue its own insured.  If the additional insured ends up being primary it may cover you ahead of your own policy, and otherwise it will kick in after that coverage.  Either way, you get benefit of both coverage.  That can be important if the claim is big enough.
    So , yes, it's an important provision, but you do have back up, such as the waiver of subrogation provision and a bunch of other protective provisions.
    In reply to Joel Kent’s discussion on guard response….
    Guard response is a GREAT solution because the responding guard is the best possible eyes-on witness to a crime in progress.  Police should and do respond to panic, duress, and hold up alarms, and in reality that is just a small fraction on the excessive “false positives” generated by intrusion alarms.  Where guard response exists, police love that system, because it not only eliminates huge amounts of worthless calls, but if a guard reports an intrusion having occurred/in process, responding officers will be far more prepared for a possible encounter with an offender, rather than just a casual response to an electronic signal that is typically bogus. 
    If the alarm company has well maintained alarms, with trained users, then the calls actually requiring a guard response are manageable.  Covering the geography you describe is feasible with a limited number of guards due to the proper use of an intrusion alarm by the client.  And, the hard costs are noticeably lower in many parts of the country (including ours). 
    I have found many alarm dealers are afraid to embrace guard response because it exposes the elephant in the room -- that old fashioned intrusion alarms without true verification prior to dispatch are almost a waste of money.  And ECV is NOT a substitute for true verification – but that is a topic for another post! 
    Guard response is a great service and has obvious advantages.  Getting the subscriber to pay for it is another issue.  Making sure your contract covers that service is another issue.  Finally, properly trained guards who understand their limitations is most important.  They are not private police and shouldn't be risking their lives or performing police functions.  They aren't paid enough for that service [neither are the cops when it's a real situation] and the subscriber also hasn't agreed to pay for a private police or mercenary force.
    Whether guard response is going to become obsolete and be replaced by video and audio services remains another interesting speculation.