Benny's Liquor, Fireworks & Gunpowder Emporium went up in flames last night. Motion-detector alarms caught the fire and automatically notified the police, who found the fire and called the local fire chief, but by the time they arrived it was too late. Now his insurer claims he violated his Protective Safeguards Endorsement by installing burglary alarms instead of actual fire alarms. Benny doesn't recall anything about this, but apparently it's some paper he signed when he bought the policy.

Key Takeaways

[ 00:37 ] - Benny's shop burned down, and his insurer denied the claim due to a protective safeguards endorsement violation.

[ 01:05 ] - Benny had a motion detector burglar alarm instead of the required fire alarm and does not recall agreeing to the protective safeguards endorsement.

[ 06:09 ] - Protective safeguards endorsements require the insured to maintain the specific safeguards named in the policy schedule as a condition of insurance.

[ 06:59 ] - If the insured knows of any suspension or impairment in the safeguards, they must notify the insurer or risk losing coverage.

[ 08:29 ] - If a safeguard is shut off due to breakage or leakage, repairs must be completed within 48 hours for notification to the insurer not to be necessary.

[ 10:47 ] - Courts often follow the strict policy language; simply having a different type of alarm, even if it detected the fire, is not considered compliant.

[ 12:04 ] - The protective safeguards endorsement is often found in commercial property or farm coverage, and courts tend to enforce strict compliance.

[ 15:15 ] - Coverage can be denied even if the breach of the safeguard duty did not affect the outcome of the loss because compliance is a condition of the insurance.

[ 18:11 ] - Beth provides a summary of the key takeaways.

Your PLRB Resources

Coverage Question: Fire Loss Involving Protective Safeguards Endorsement - https://www.plrb.org/documents/fire-loss-involving-protective-safeguards-endorsement/

Law Review: New Hamilton Liquor Store, Inc. v. Amguard Ins. Co. - https://www.plrb.org/documents/new-hamilton-liquor-store-inc-v-amguard-ins-co-2020/

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The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.

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