You may have an alarm system installed at your business – but what do you know about the system? Do you only trust the company whom you have contracted to provide adequate security or do you also consider what your business insurer has to say on the matter?
The alarm system needs a bit more attention than we might sometimes like to admit. There are a wide range of systems in the market. Unfortunately many of these are either not working, sometimes not switched on and often there might be no response from the private security company where an alarm is supposed to be raised!
I decided to ask Business Outsurance and Fidelity Security a few questions and enquire about the required safety standards:
These questions might be important for both business and home owners:
Insurance companies have a list of “approved “repairers for vehicle damage – are there also “approved” private security companies to install alarm systems and provide response?
The approval relates to the alarm specs rather than to the security provider itself. The requirements are set out in the SAIDSA bylaw 25 (SA Intruder Detection Services Association) and the alarms we request/endorse must adhere to these standards.
Are there industry approved security companies and do insurers take note of any such registration by industry bodies?
There may be security companies that are insurer approved and each company would devise its own panel. The SAIDSA link is crucial.
Security companies must be PSIRA registered (Private Security Industry Regulatory Authority) by law, and some insurers prefer companies that are SAIDSA (South African Intruder Detection Services Association) compliant, which means that their control rooms, armed response, technical and sales teams comply to industry standards
How does the insurer ensure that the alarm system is effective and more specifically that it would be installed/ maintained by a company qualified to do so?
As mentioned, the issue for us is the installation method stipulated in Bylaw 25. The SAIDSA guidelines are industry best practise
Are there different “risk/ safety” ratings for the following security: armed guard, alarm system installed, alarm system plus armed response… are these measured rated / graded and how would such a rating look like from least safe to safest?
Guards are graded by PSIRA and grading is a tiering for guards from Grade D to Grade A.
Unarmed guards are generally Grade D or C, Site seniors may be Grade C or B.
Armed response officers are Grade C with a PSIRA armed response course and firearm competency
The guidelines for best practise for alarms systems configuration and installation standards are SAIDSA by-laws.
Customers should have alarms systems recommended and installed by PSIRA registered personnel working for a PSIRA registered security business, and installed to SAIDSA bylaws.
Alarm monitoring and armed response must be supplied by a PSIRA registered security business, and the armed response, control room, technical and sales should all be to SAIDSA standards
How can the business or home owner ensure that he saves on the insurance premium in line with such safety level ratings – will he be assisted by the insurer with advice on which measures are best and which will enable him to find the best premium?
We offer a premium discount when a linked alarm is installed over and above our security requirements. In certain cases, the linked alarm is mandatory and there is no further discount offered.
See above Use PSIRA registered companies that have PSIRA registered personnel, who comply with SIDSA operational standards
Can an insurer insist on acquiring information from the security company about an alarm system – and whether this was activated etc…would such right to obtain information need to be included in the terms and conditions of the insurance policy?
Insurers do insist on alarm logs from time to time. If the policy states that an alarm system is at the property, it may require verification that the alarm system was armed at the time of the intrusion in order to validate the claim.
An insurer may ask for this information to determine whether an alarm system was operational at the time of loss and also prior to that if the policy requires for an alarm system to be a security requirement or alert to minimize losses. This request for information should always be material and would generally be obtained when there is a loss. This would also form part of the requirements, within the policy, to supply all information that is necessary to validate such a loss.
Most Insurers will accept, in good faith, that an insured has provided them with the correct information upfront when a policy is quoted for and accepted. Changes to the insured risk may take place during the life cycle of the policy, and it is the insured’s responsibility to inform the Insurer of such changes as they could affect the cover.
Advice to Business Owners
We would like to advise business owners to be pro-active in protecting their business. The following steps would point you in the right direction:
- Take your time in selecting the private security company – don’t decide only based on sales talk.
- Ask about accreditation, number of cars and guards able to respond etc.
- Talk to friends and other clients about their experience with the security provider.
- More important – ask your insurer whether the security company is reputable – they might have several clients with such a security company and have a significant amount of feedback.
- Once you have decided on the security company, continue the discussion with the business insurer on the terms and conditions.
- What does your policy require about the alarm system – is it only a “stand alone” alarm making noise or is a “linked alarm” required.
- Compare pricing and don’t be afraid to ask what the premium difference would be should you install a more advanced system.
- Most important – if an alarm is required it may not be a decoration – it MUST be armed at the close of business – failure to do so may result in your claim being rejected!