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Does your insurance policy have a warranty clause?

We all know there is a lot of fine print in insurance policies, Coverages, conditions & exclusions. An insurer (the underwriter) has the right to limit their risk by placing warranties on their policies that state is a warranty is breached the policy is void; meaning the insurer does not need to cover your loss.

It is also common that many business insurance policies have Warranties. Basically, a warranty is a promise by an insured (policy holder) to do or not to do something. Failure to comply to your warranty could VOID your coverage regardless of the cause of the loss and the coverages and exclusions in your policy.

You should check with your account manager to verify and review– warranties are conditions that directly affect your coverage.

There are many types of warranties

Alarm system warranty – If you have an alarm system and it is defective or not working, this may null and void a policy if there is a claim. It is the responsibility of the policy holder to notify the insurance company of any interruption, flaw or defect in your intrusion detection system. Failure to do so could render your coverage void. For example if you have an insurance policy providing coverage for burglary or theft of your business contents and you are robbed while the alarm system is off-line, the alarm system warranty will not cover the loss.

Tips to ensure your alarm system warranty is not triggered

  • Ensure you have a monitored alarm system. A monitoring company will advise you if the alarm is not functional or has errors.
  • Ensure you and all staff are aware of the repercussions of “forgetting” to set an alarm at the end of the business day.
  • Make sure you have the alarm system on a back up power system. Electrical interruptions are one of the main reasons an alarm system will go offline.
  • Include quarterly maintenance checks in your operational routines.

Sub-contractor warranty – If this warranty is contained in your policy, it is your requirement that you must receive written proof of insurance from any subcontractor that you hire prior before they commence work for you. You could be held responsible for the negligent acts of subcontractors. It is a best business practice to work with and hire only insured trades.

It is important to read your policy and understand your terms. We know that this can be a daunting task, so we are here to help you navigate the pages of wordings related to your coverage.

 

Protection beyond insurance is what we do. Ask us to help you.

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