NBFAA launches insurance program

Security America culminates two years of efforts by association
Monday, December 1, 2003

SILVER SPRING, Md. - After more than two years of planning, the National Burglar & Fire Alarm Association has introduced a new risk retention group that will allow its members to take advantage of liability insurance at a reduced rate.

Security America Risk Retention Group is the collaborative effort of the NBFAA and Vermont-based Marsh Advantage America. Formalized and announced at the NBFAA fall conference in Washington, the company will offer insurance coverage in all 50 states to qualified NBFAA members.

The program, which the association said could become one of its biggest member benefits, is not NBFAA’s first foray into the insurance field. In 1986, the association established a program for its members that became a standard insurance company in 1987. It was discontinued in 1995 when the company handling the program declined to renew its policies.

At press time, Security America had signed on 17 member companies as clients and expected to sign on many more as word of the program spreads through the industry, said Dr. Rick Ostopowicz, communications manager for NBFAA.

Rising premiums, combined with an exodus of sorts in recent years by insurance carriers who were no longer interested in insuring alarm companies, were the driving factors behind the new offering.

One of the first companies to sign on was APS Corp., based in New Jersey. APS President Dan Jacquish, who is a past president of the NBFAA, said he looked at the Security America program after getting sticker shock from his prior insurance company.

“My renewal notice that I got from my previous carrier was about four and a half times what my premium was last year,” Jacquish said. “That was enough to get my attention.”

Even though Jacquish’s carrier was able to re-quote his premium at about $15,000, it was still a huge increase over the $4,000 he had been paying, he said. He ended up getting coverage from Security America for $11,000 for his 15-person company. The only snag he encountered was having to wait for Security America to notify New Jersey that it planned to write policies in the state.

In order to avoid lapses in coverage, Jacquish said he would recommend that NBFAA members look into their current policies and Security America well in advance of their renewal dates.

“The problem is that as with any kind of program, the insurance companies are smart enough not to send out renewal notices until it’s the 11th hour because they know nobody’s going to be able to turn it around fast enough,” he said. “What these people need to do is 30 or 60 days before their renewal period, they need to then be at least getting a quote.”

Unfortunately for some in the industry, in order to keep premiums low, not everyone qualifies for the program. Security America will analyze applicants based on a number of factors, including previous claim history, client base, type of installation and experience level of technicians.

“It’s going to be open to the better dealers who have taken people through training and those kinds of things because that lessens the likelihood of losses,” Jacquish said. “It’s not going to be something that’s available to everybody, but certainly anybody who wants to get the program should be able to meet the criteria, but some of that may take time to do.”