Alarm Installation: Protecting Myself with Efficacy (Insurance) Cover

Alarminsure provides specialist insurance for security installers and contractors. Protecting businesses with cover for the installation and maintenance of alarms, CCTV systems, emergency lighting, security doors, locks, and safes.

With over 30 years of experience providing insurance for security installers, we’re more than familiar with what your policy needs to include. That’s why we were one of the first to offer efficacy insurance, which is included as standard with our specialist security insurance.

Our specialist security insurance policy covers you for the work that you do, so you can carry on with the peace of mind that your insurance is always there, should you need it.

What happens if something goes wrong and an alarm you’ve fitted doesn’t work as intended?

What is efficacy insurance cover?

Efficacy Cover protects the policyholder against legal liability for injury or damage to third parties caused by a product or service failing to perform as intended. You might also see it described as inefficacy cover or failure to perform. It is an important cover for contractors involved in performance-critical activities like installing alarm and security systems or fire suppression systems.

When your product or service fails to perform as intended, it can result in harm to your customers, their property, or even third parties. In such cases, you may be held liable, potentially facing costly claims. As a business offering specialised products or services, protecting your reputation is paramount. Efficacy cover offers an additional layer of protection for both you and your customers.

Facing a claim without adequate insurance can be financially damaging and harmful to your reputation.

Is efficacy cover included in my business insurance cover?

Many standard ‘off-the-shelf’ public liability insurance policies exclude efficacy cover. This means that if you supply, install or fit safety-critical alarms or security measures like smoke detectors that fail to perform correctly, and you don’t have efficacy insurance then you’re not covered. We offer efficacy insurance, which is included as standard with our specialist security insurance.

Buying an ‘off-the-shelf’ insurance policy may look like it’s saving you money, but if it doesn’t cover you for the job you do, then it could cost you much more in the long run.

In some cases, insurers may opt to “remain silent” on efficacy cover, in these situations it is advisable to talk to your broker or insurer and ask for clarity to avoid any confusion or misunderstanding should a claim arise.

What are the common causes of efficacy claims?

A 2018 report by the Local Government Association highlighted just how important efficacy cover is. They identified that in 20% of residential fires, the mains-powered smoke alarm failed to perform.

It’s important to remember that several factors could contribute to this including product fault, incorrect installation or poor maintenance. However, without efficacy cover, the installer or supplier is at risk from claims relating to any loss of property or life arising from the incident.

What are the benefits of efficacy insurance cover?

The benefits of efficacy insurance include:

Financial compensation for loss of income or damages incurred because of product or service failure. This can help mitigate the financial risks associated with such failures.

Customer confidence, knowing they have protection if the product or service does not perform as advertised. It demonstrates that the company has taken steps to ensure the efficacy of its products and is willing to assume financial responsibility in case of any issues.

Improved customer trust, as customers are more likely to trust and continue to use products and services from companies that have efficacy insurance in place.

Reduced risk for manufacturers, who can avoid the financial and reputational costs associated with product or service failures.

Enhanced reputation for companies, as they can demonstrate their commitment to providing high-quality products and services.

Efficacy insurance cover provides financial protection and liability coverage, mitigating the risks associated with the failure of a product or service to perform as expected. It enhances customer confidence, aids in risk management, and offers peace of mind to businesses and consumers alike.

Who needs efficacy cover?

Efficacy insurance is required by businesses involved in the manufacture, service, supply or installation of performance-critical parts or products. Efficacy cover operates where the product or service can cause loss or damage even if there is no fault with the product itself, and as such efficacy insurance is providing a partial guarantee that the product will perform as intended. Providing peace of mind for you and your customers.

How do you buy efficacy cover?

Alarminsure are a specialist insurance broker, specialising in security installers and electrical contractors, with experience and expertise in managing efficacy exposure for our clients. Our policy offers efficacy insurance, included as standard with our specialist security insurance.

Summary

Alarminsure are a specialist insurance provider for security installers and contractors, in this article we have highlighted the importance of efficacy insurance cover, demonstrating how efficacy cover protects you against liability for injury or damage caused by a product or service failing to perform as intended.

The key areas to remember are the benefits of efficacy insurance, such as financial compensation, customer confidence, improved trust, reduced risk, and enhanced reputation. Alarminsure offers efficacy insurance as part of its specialist security insurance policy, catering to the specific needs of security installers.

If you are a security installer or contractor involved in performance or safety-critical activities, consider the importance of efficacy insurance cover. We’d love to help you get the right cover for your business. The best way to get a quote is to give us a call on 0800 071 0999 or email us at info@alarminsure.com and one of the team will help you.