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Additional insured issue
September 1,  2023
 Additional insured issue
          I was asked by one of our business owners about the level of additional exposure that we have if we are not able to be named as an additional insured. Would you please give me your understanding/advice?
Thank You,
          The Standard Form Agreements bring [at least] three things to the table:
  *  provide the best contractual protection against lawsuits by subscribers
  *  provides the best provisions to enforce the contract for collection against the subscriber
  *  creates the most value, equity, for your business because the K&K contracts are recognized [by alarm dealers, central stations and E&O insurance carriers] as the gold standard in the industry
          The K&K contracts are carefully written and most if not all provisions are important.  The “additional insured” provision is one of several of the “protective” provisions.  The protective provisions serve to shift the risk of liability to the subscriber.  Requiring the subscriber to name you as an additional insured will help accomplish that shift.  First, it provides a layer of insurance coverage in the event you’re sued.  Your own policy might be exhausted by the claim so an additional layer of coverage may be important.  Perhaps more important is the legal principle that an insurer cannot sue its own insured to reimburse it for the insured event.  Because the Standard Form Agreement also has a waiver of subrogation provision the additional insured provision is not as essential as other provisions.  Therefore, though deleting the additional insured provision will increase your potential liability if all other provisions in the contract are intact it’s an acceptable risk, in my opinion, though you may not want to assume any more risk.

           Whether your subscriber's insurance carrier is going to refuse to name you as an additional insured is another matter; I haven't heard that and I'd like to hear from the insurance brokers whether this is an issue, new or otherwise.  
           Subscribers [who read the contract] often challenge the additional insured provision [technically this is called an "insurance procurement" clause].  More often the provision is simply ignored by subscribers and alarm companies alike.  I don't think many alarm companies actually follow up once the contract is signed and insist or even ask for the Additional Insured Endorsement.  Later it might come up if there is a claim or if the alarm company wants to declare the subscriber in breach for having failed to procure the insurance.
          I haven't heard that a subscriber's carrier would not name the alarm company.  Of course if the subscriber asks its insurance broker the broker will say it's not a good idea and might even claim the carrier won't do it, but I am not convinced that's the case. 

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301