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“Alarming” Things About Insurance

“Alarming” Things About Insurance

If you have property insurance (and you should) the application may have asked about your security measures. Do you have armed guards? Do you have a sprinkler system? Do you have a burglar alarm system? In some cases your security measures may earn you a discount on your policy premium. However, they probably also include something else: a Protective Safeguards endorsement. What is that, and could it be a problem? Protective Safeguards Endorsement The Protective Safeguards endorsement will look something like this: The premises and building numbers will correspond with the location(s) scheduled on the declarations page of the policy, and each one will have one or more symbols listed next to it, each starting with “P-”. P-1 is an Automatic Sprinkler System P-2 is an Automatic Fire Alarm P-3 is a Security Service that makes hourly rounds P-4 is a Service Contract with a privately owned fire department P-5 is an Automatic Commercial Cooking Exhaust and Extinguishing System P-9 is any other protective system shown and described in the schedule Why List Protective Systems? If you list a protective system on your application, you will most likely receive a discount on your coverage. However, the insurance company will require that the protective system be in complete working order at the time of a loss, otherwise they will not pay on the claim. The endorsement itself includes a provision adding an exclusion to the policy that says if the policyholder knows that the protective system was not working prior to the loss, then there is no coverage. If the protective system fails because it was not properly maintained, there...