The alarm installation and security industry has experienced remarkable growth in recent years, as homeowners and businesses across the nation increasingly invest in protecting their properties. But with that growth comes a stark reality: greater responsibility — and greater liability. At Central Insurance Agency, we work with alarm and security companies every day to make sure they have the right coverage before a costly incident puts them at risk.
A Real-World Lesson: The Vanwell Electronics Case
Consider this sobering scenario: A hotel clerk working the front desk was in danger of being attacked. She pressed the panic button — her one lifeline in that moment — and nothing happened. No alarm, no response, no help.
The button had been broken for weeks. And according to court records, the alarm company responsible for the system — Vanwell Electronics — had known about the malfunction for approximately 16 weeks without fixing it.
The clerk was severely injured. Vanwell Electronics ultimately settled the lawsuit for $2.5 million. The monitoring company, Criticom Monitoring Services, was dismissed from the case — because it had no contractual obligation to repair panic buttons and never received a signal from the broken device. You can read more about the original case details at Kirschenbaum & Kirschenbaum attorneys at law resources.
Three Critical Lessons for Alarm & Security Companies
1. Your Contracts Define Your Liability
The Vanwell case hinged in part on what the company had committed to in its service agreement. The company “installed and maintained the hotel’s security system” — and that word maintenance proved critical. Review every contract carefully. Be deliberate about what obligations you agree to, and work with a legal professional familiar with the alarm industry to ensure your agreements are properly structured.
2. You Are in the Life-Safety Business
Unlike many industries, alarm and security companies deal directly with the protection of human lives and property. A broken panic button isn’t an inconvenience — it can be the difference between life and death. Conduct your business accordingly. Implement internal protocols to track outstanding repair requests, and never let a known life-safety defect go unaddressed.
3. Insurance Is Not Optional — It’s Essential
It appears Vanwell Electronics had insurance coverage — the $2.5 million settlement strongly suggests it. But not every alarm company is adequately covered. A lawsuit of this scale could bankrupt a business without proper protection. General liability alone is often not enough; alarm companies also need errors & omissions (E&O) coverage, completed operations coverage, and more.
How Central Insurance Agency Can Help
At Central Insurance Agency, we serve the entire United States. We specialize in crafting custom commercial insurance solutions for businesses in the alarm and security industry. We understand the unique exposures your business faces — from installation errors to monitoring failures to maintenance disputes.
Our commercial insurance programs for alarm companies can include:
- General Liability Insurance
- Errors & Omissions (E&O) / Professional Liability
- Commercial Auto Insurance
- Workers’ Compensation
- Umbrella / Excess Liability
The alarm industry is growing — make sure your insurance coverage is growing with it. Contact Central Insurance Agency today for a free consultation and let us build a protection plan tailored specifically for your business.