Security Alarm Company Insurance Policy Information
Security Alarm Company Insurance. Security is important in the times we live in and protecting loved ones and property is a priority. It's for this reason, alarm companies exist. The job of a security company consists of installing, repairing and monitoring security alarm systems. Some of these systems include fire and burglar alarm systems.
Alarm service contractors design, install, maintain and repair security systems in residences and businesses to detect abnormal conditions, such as smoke or a break-in. When the system recognizes an adverse condition, the building owner, alarm company, police or fire department are alerted that action is needed.
The contractor designs a system to meet the customer's requirements, and then installs the wiring, control boxes and other necessary devices throughout the premises as contracted. The system installed may protect only the interior of the building or extend to the exterior.
The alarm system may include motion detectors, laser beams, ocular or fingerprint reading devices, and cameras. It may be monitored locally, through a central station monitoring service, the police department and/or the fire department. Systems range from the very simple to incredibly complex.
Operating a business of this nature presents lots of risks. With the level of risk involved, it's necessary to have security alarm company insurance. Having the right insurance comes down to knowing what you need to protect. In this article, we're going to take a look at the different commercial insurance policies and how you can find the best ones for your business.
Security alarm company insurance protects your installation and monitoring business from lawsuits with rates as low as $107/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked security and alarm company insurance questions:
- What Is Security Alarm Company Insurance?
- How Much Does Security Alarm Company Insurance Cost?
- Why Do Alarm Companies Need Insurance?
- What Type Of Insurance Do Alarm Companies Need?
- What Does Security Alarm Company Insurance Cover & Pay For?
What Is Security Alarm Company Insurance?
Security alarm company insurance is a type of insurance policy that is designed specifically for companies that install and maintain security alarm systems.
This type of insurance typically covers a wide range of risks and potential liabilities associated with the installation, maintenance, and operation of security alarms, including property damage, theft, liability for personal injury or property damage, and more. The insurance policy may also provide coverage for losses resulting from false alarms or other errors or malfunctions in the security system.
The coverage provided by security alarm company insurance is intended to protect the company from financial losses, legal liability, and other financial obligations that may arise from its operation.
How Much Does Security Alarm Company Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small security alarm companies ranges from $107 to $159 per month based on location, size, payroll, sales and experience.
Why Do Alarm Companies Need Insurance?
Alarm companies need insurance to protect themselves from financial losses due to unforeseen events, such as:
Liability claims: If a customer sues the company for damages or personal injury resulting from their services, the insurance policy will cover the legal expenses and settlement costs.
Property damage: If the company's equipment or building is damaged by fire, theft, or other hazards, the insurance policy will cover the repair or replacement costs.
Data breaches: If the company's database is hacked and sensitive customer information is stolen, the insurance policy will cover the cost of notifying affected customers and providing identity theft protection services.
Employee errors: If an employee makes a mistake that leads to financial losses for the company or its customers, the insurance policy will cover the resulting costs.
Having insurance coverage helps the company mitigate risks and secure its financial stability. It also shows the company's commitment to providing quality and responsible services to its customers.
What Type Of Insurance Do Alarm Companies Need?
The most important insurance you can have for your alarm company is liability insurance. As an alarm company, many businesses are relying on you to protect their business property from break-ins, fires and anything that puts their business in danger.
As an alarm company, you are responsible for responding to alarms and alerting authorities if something goes wrong. Usually, when installing or selling a security system, you might spend time on the property of your client which can bring about different risks.
When you take the time to discuss security alarm company insurance with an agent or get an insurance package, there are few things you want to ensure that it includes and we'll take a look at them below:
Commercial General Liability Insurance - This insurance helps to provide you with coverage when there are costly claims made against your business. If there's an instance where your business causes bodily injury or damages the property of a third party, then with this insurance you can cover the costs associated.
Commercial Umbrella Insurance - Also known as excess liability coverage allows for additional liability protection when the limits of your other liability policies have been reached. Having this policy is a good idea to protect you from massive claims.
Cyber Liability Insurance - With this type of coverage, you're protected if there's a breach of data involving your business. Cyber liability insurance covers public relations and investigations costs. Having this type of protection is vital especially if you store confidential customer information in a database.
Commercial Auto Insurance - If there are vehicles you use to operate your business, then you must have insurance for those vehicles. You can never predict what can happen on the road and this is why you need auto liability insurance to keep you covered. If an employee gets in an accident and causes bodily damage to a third party or damages their property, this insurance helps with some of the costs. If employees use their vehicles to do work for the business, then you can get non-owned auto liability insurance.
Workers Compensation - If you have employees most states mandate workers comp. workers compensation coverage helps with any costs associated with the injury of an employee on the job. If an employee is injured and taken to the hospital, their bills are covered with this type of coverage.
Property exposures at the contractor's premises are generally limited to an office and storage for supplies, tools and vehicles. Stock is usually minimal because each job requires special or unique devices that are ordered or purchased on an as-needed basis. Since the system components are mainly electronic in nature, they are susceptible to damage by fire, smoke and water.
Risks Involved In The Security Business
Protecting others through the use of your security systems is a risky business. If you sell, install or monitor security alarm systems there's the responsibility of ensuring these systems function as intended. Keeping your clients protected is important, but you also need to make sure that your business is protected as well
Here are a few of the risks you face when operating a security company:
- Bodily injury or property damage during the installation of a security system
- Fire, storms, vandalism or burglary
- Employees committing theft or crime
- Data breach or other cyber accidents
These are just some of the risks you must protect your security company from. Insurance is necessary, but it's harder to get for this type of business. If you work with an experienced insurance agent you can work together to find the right security alarm company insurance for your business.
Alarm Service, Installation And Repair Risks & Exposures
Premises liability exposures at the contractor's office are generally limited due to lack of public access. Off-site exposures are extensive. The installation of alarm systems at job sites can be invasive and require work throughout a home or business, resulting in a high potential for property damage. The area of operation should be restricted by barriers and proper signage to protect the public from slips and falls over tools, power cords, building materials, and scrap.
If there is work at heights, falling tools or supplies may cause injury or property damage if dropped from ladders and scaffolding. Employees may use information gained by installing the alarm to return and cause bodily harm or property damage at the client's premises.
Completed operations exposures include faulty operating systems that could damage the client's premises, or failure of the system to operate correctly and result in bodily injury or property damage. Alarm contractors are held to a high degree of care because of the trust their customers necessarily place in their work. Any time security issues are involved and a fire or crime occurs, the exposure of the contractor who promises safe, secure premises from the installation and use of a product can result in significant products losses.
Severe exposures may be present in alarm system installations at medical facilities, prisons, large manufacturers and certain residences. The warranties or guarantees offered by the contractor must be reviewed carefully. Maintenance agreements, under which the contractor is obligated to maintain and keep the system operational, must be reviewed carefully.
Workers compensation exposures come from the cutting, welding, drilling, wiring, and other necessary processes during the alarm system installation. Injuries can occur from working with hand tools, slipping or falling, and back injuries such as hernias, strains and sprains from lifting. Consistently failing to enforce basic safety procedures, such as shutting off electrical power before installing wiring, may indicate a morale hazard. Employees must be carefully selected, trained and supervised.
Inland marine exposures include accounts receivable if the contractor offers credit to customers, computers, contractor's equipment and tools, goods in transit, installation floater, and valuable papers and records for customers' and suppliers' information, installation specifications, and maintenance contracts. Employee tool coverage may be necessary if employees provide their own specialized equipment.
Crime exposure is primarily from employee dishonesty. Background checks, including criminal history, should be performed on all employees providing services to customers or handling money. Employees who cannot be bonded and licensed are a significant hazard as they have ready access to customers' premises and property.
This exposure can quickly grow from a crime loss against the alarm contractor to a liability loss from the customer. All ordering, billing and disbursement should be handled as separate duties with reconciliations occurring regularly.
Commercial auto exposures are generally limited to transporting workers, equipment and supplies to and from job sites. MVRs must be run on a regular basis. Random drug and alcohol testing should be conducted. Vehicles must be well maintained with records kept in a central location.
What Does Security Alarm Company Insurance Cover & Pay For?
Alarm companies can be sued for a variety of reasons, including:
- Failure to monitor: If an alarm company fails to monitor a client's premises as promised, and a burglary or other criminal activity occurs, the client may sue the alarm company for negligence.
- False alarms: Alarm companies can be sued if they repeatedly send emergency responders to a client's property for false alarms, which can lead to fines, penalties, or legal action.
- Equipment failure: If an alarm company's equipment fails to function properly, and this failure results in harm to a client, the company may be sued for negligence.
- Breach of contract: If an alarm company breaches its contract with a client, such as by failing to provide the agreed-upon level of service, the client may sue the company for breach of contract.
- Invasion of privacy: If an alarm company engages in surveillance or other activities that violate a client's privacy rights, the client may sue the company for invasion of privacy.
Insurance can protect alarm companies in several ways:
Liability insurance: This type of insurance can cover the costs of defending against a lawsuit and paying any damages awarded to the plaintiff. For example, if an alarm company is sued for negligence after failing to monitor a client's premises, liability insurance can help pay for the cost of defending against the lawsuit and any damages awarded to the plaintiff.
Errors and omissions insurance: This type of insurance is designed to protect businesses that provide professional services, such as alarm monitoring. If an alarm company is sued for errors or omissions in its services, this insurance can help pay for the cost of defending against the lawsuit and any damages awarded to the plaintiff.
Cyber insurance: This type of insurance can protect alarm companies against cyber risks, such as hacking, data breaches, or other cyber attacks. If an alarm company is sued for a breach of privacy resulting from a cyber attack, cyber insurance can help pay for the cost of defending against the lawsuit and any damages awarded to the plaintiff.
Property insurance: This type of insurance can cover the cost of repairing or replacing the company's equipment if it is damaged or destroyed, protecting the company from losses resulting from equipment failure.
In summary, alarm companies can be sued for a variety of reasons, including failure to monitor, false alarms, equipment failure, breach of contract, and invasion of privacy. Insurance can protect alarm companies by providing coverage for the costs of defending against lawsuits and paying damages awarded to plaintiffs.
Commercial Insurance And Business Industry Classification
- SIC CODE: 7382 Security Systems Services, 1731 Electrical Work
- NAICS CODE: 561621 Security Systems Services (except Locksmiths), 238210 Electrical Contactors and Other Wiring Installation Contractors
- Suggested Workers Compensation Code(s): 7605 Burglar and Fire Alarm Installation or Repair & Drivers
Description for 7382: Security Systems Services
Division I: Services | Major Group 73: Business Services | Industry Group 738: Miscellaneous Business Services
7382 Security Systems Services: Establishments primarily engaged in monitoring and maintaining security systems devices, such as burglar and fire alarms. Establishments of this industry may sell or lease and install the security systems which they monitor and maintain. Establishments primarily engaged in the sales and installation, or installation only, of such devices are classified in Construction, Industry 1731.
- Burglar alarm monitoring and maintenance
- Fire alarm monitoring and maintenance
- Security systems devices, burglar and fire alarm: monitoring and
Description for 1731: Electrical Work
Division C: Construction | Major Group 17: Construction Special Trade Contractors | Industry Group 173: Electrical Work
1731 Electrical Work: Special trade contractors primarily engaged in electrical work at the site. The construction of transmission lines is classified in Industry 1623, and electrical work carried on in repair shops is classified in Services, Industry Group 762. Establishments primarily engaged in monitoring of burglar and fire alarms with incidental installation are classified in Services, Industry 7382.
- Burglar alarm installation-contractors
- Cable splicing, electrical-contractors
- Cable television hookup-contractors
- Communications equipment installation-contractors
- Electrical repair at site of construction-contractors
- Electrical work-contractors
- Electronic control system installation-contractors
- Fire alarm installation-contractors
- Highway lighting and electrical signal construction-contractors
- Intercommunications equipment installation-contractors
- Sound equipment installation-contractors
- Telecommunications equipment installation-contractors
- Telephone and telephone equipment installation-contractors
Security Alarm Company Insurance - The Bottom Line
Protecting your business is important to its survival. Losing everything in your business to a lawsuit is possible. To get started with finding the right insurance for your business it is important that you take the time to speak with an insurance professional. When you do this, you can then find the right insurance for your business and keep your business protected for a long time.
Additional Resources For Contractors & Home Improvement Insurance
Learn about small business contractor's insurance, including what it covers, how much it costs - and how commercial insurance can help protect your contracting business from lawsuits.
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- Appliance Repair & Service
- Blacksmith & Metal Workers
- Boat Repair & Dry Docks
- Boiler Contractors
- Builders Risk
- Building Cleaning & Maintenance Services
- Cabinet Installer
- Cable And Satellite TV Installer
- Chimney Sweep
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- Contractor Liability
- Curtain Cleaners
- Deck Builders
- Door And Window Installers
- Dryer Vent Cleaning
- Drywall Contractor
- Electrical Contractors
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- Garage Door Installer And Repair
- General Contractors
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- Glazier Insurance
- Gutter Installation And Repair
- House Cleaning
- HVAC Contractor
- Insulation Contractor
- Janitorial Cleaning Services
- Lawn Care
- Lawn Irrigation Sprinkler System Installation
- Oil And Gas Well Drilling Contractors
- Paperhanging Contractors
- Plastering And Stucco Contractor
- Pressure Washing Contractors
- Propane And Fuel Dealers
- Rug, Upholstery & Carpet Cleaning
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- Security Alarm
- Septic Tank Cleaning
- Siding Contractor
- Sign Installation & Repair
- Solar Panel Installers
- Snow Plow
- Stone And Tile Installer
- Surety Bonds
- Swimming Pool Contractor
- Swimming Pool Service And Maintenance
- Tank Cleaners
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- Welding Contractor
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- Window Cleaning
- Specialty Contractors
The contracting industry is a field that involves a lot of risks, both for the contractor and for the clients they work for. This is why commercial insurance is so important for contractors. Insurance can protect contractors from a variety of potential losses, such as:
Liability: If a contractor causes damage to a client's property or if a client is injured while on a job site, the contractor could be held legally responsible. Liability insurance can cover legal fees and any settlements or judgments that may be awarded.
Property damage: Contractors often use a lot of expensive equipment and tools, and there is always a risk that this equipment could be damaged or stolen. Commercial property insurance can help cover the cost of replacing damaged or stolen equipment.
Business interruption: If a contractor is unable to work due to an unforeseen event, such as a natural disaster, insurance can help cover their lost income during this time.
Workers compensation: If a contractor or one of their employees is injured on the job, worker's comp can help cover medical expenses and lost wages.
Overall, commercial insurance is an important risk management tool for contractors. It can provide financial protection against a wide range of potential losses, helping contractors to stay in business and continue serving their clients.
Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Contractors' Equipment and Tools, General Liability, Employee Benefits Liability, Umbrella Liability, Automobile Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Accounts Receivable, Builders Risk, Computers, Goods in Transit, Installation Floater, Valuable Papers and Records, Cyber Liability, Employment-related Practicesand Stop Gap Liability.