There was a functioning Central Station Alarm in the 6455 store front as required by the Protective Safeguards Endorsement. The other three store fronts were vacant as the insured had evicted the tenants for nonpayment of rent. There were two fire losses that occurred on seperate dates, and two claims have been filed. The first is for a fire bomb that was thrown on the roof causing exterior damage and interior water damage to all units. The second is a separate fire set within two of the other three store fronts, which caused some additional fire damage. These three units did not and never had alarm systems.

The carrier wants to deny the claims stating that all of the insured addresses did not have alarm systems as required by the endorsement. The endorsement states,

We will not pay for loss or damage caused by or resulting from fire if, prior to the fire, you:

1. Knew of any suspension or impairment in any protective safeguard listed in the Schedule above and failed to notify us of the fact; or

2. Failed to maintain any protective safeguard listed in the Schedule above, and over which you had control, in complete working order.

There was no suspension of the only active alarm system, and the insured never would have had control of any other alarm in the other rental store fronts.

The policy is absent any specific langauge requiring all store fronts to be alarmed and, as a matter of fact, is ambigious regarding if the policy even requires that all stores be alarmed. The policy does mention maintaining a “protective safeguard…over which you have control.” This requirement was met with respect to the 6455 address.

Does the carrier have a valid basis for denial if the insured did not maintain the stated safeguard at all store fronts?

Michigan Subscriber

It really depends on what is stated in the schedule of the IL 04 15 endorsement. If the storefronts were listed separately and each had a separate protective safeguards symbol next to it, there would be little question that each required an alarm. If the schedule lists only the 6455 storefront or the range of addresses as one building with one protective safeguards symbol next to it, it would be reasonable to believe that only one alarm was required for the entire building. From what you describe, the latter is your insured's situation, in which case neither of the exclusions would apply.