Protecting Your Business: The Role of a Burglar Alarm System Warranty in Insurance Coverage

By Jenny Holly Hansen | WBN News | May 6, 2025

When it comes to protecting your business, insurance is just one part of the safety net. The other part is how you manage risk—and that’s where security systems, especially burglar alarms, come into play. But here’s something many business owners don’t realize: if your insurance policy includes a burglar alarm system warranty, it can directly affect whether a claim is paid in full—or at all.

Let’s break down what this warranty means, and how it impacts your commercial coverage.

What Is a Burglar Alarm System Warranty?

In insurance terms, a "warranty" isn’t a manufacturer’s guarantee like you might expect. Instead, it's a condition of coverage—a contractual promise that you, as the policyholder, agree to uphold. If your business insurance policy includes a burglar alarm system warranty, that means you're required to have a functioning, professionally monitored burglar alarm system installed and activated at all required times.

Failing to meet that condition could result in your claim being denied, even if the loss is unrelated to the alarm system.

Why Insurers Use This Warranty

Insurers add this warranty because it reduces the risk of theft or vandalism, especially outside business hours. When your system is monitored, any unauthorized entry is quickly reported and addressed, minimizing potential losses. This added layer of protection often qualifies you for discounted premiums—but it comes with responsibility.

What Happens If the Warranty Is Breached?

Let’s say your business is broken into overnight. You submit a claim for stolen inventory and damaged property. But during the investigation, it’s discovered that:

• The alarm wasn’t armed.
• The monitoring contract had lapsed.
• The system hadn’t been maintained.

If your policy includes a burglar alarm system warranty, this could be considered a breach of warranty, and your claim could be partially or fully denied—even if the break-in was otherwise covered under your policy.

How to Stay Compliant

To ensure your insurance protection stays intact:

• Install a CSA/ULC-approved system from a professional security company.
• Sign a monitoring contract with 24/7 response.
• Test your alarm regularly and keep maintenance records.
• Make sure employees know the arming procedures.
• Notify your broker immediately if your system changes, malfunctions, or gets disconnected.

When Does This Warranty Apply?

Not every policy includes it, but it’s common in:

• High-value retail or inventory-heavy businesses.
• Locations with a history of break-ins.
• Businesses operating in high-risk urban zones.
• Policies written with reduced deductibles or increased theft coverage.

If your policy does include it, the wording may appear under a "Special Conditions" or "Security Warranties" section.

Final Thoughts

A burglar alarm system warranty isn't just legal fine print—it's a critical part of your business’s insurance strategy. When used correctly, it can protect your assets and reduce your premiums. But if overlooked, it can leave you exposed at the worst possible moment.

If you're unsure whether your current policy includes this warranty—or if you're thinking about upgrading your security system—talk to your broker. It’s always better to confirm now than fight for a denied claim later.

Let’s Keep Talking:

Jenny is a business insurance broker with Waypoint Insurance.

She is also a business development consultant with Impresario Partners, helping Canadian Business expand overseas.

She can be reached at 604-317-6755 or jholly-hansen@wbnn.news. Connect with Jenny on LinkedIn at https://www.linkedin.com/in/jenny-holly-hansen-365b691b/.  Connect with Jenny at BlueSky: https://bsky.app/profile/jennyhollyhansen.bsky.social

Let’s Meet Up:

Jenny Holly Hansen is a cohost with Chris Sturges of the Langley Impact Networking Group. You are welcome to join us on Thursday’s from 4pm to 6pm at: Sidebar Bar and Grill: 100b - 20018 83A Avenue, Langley, BC V2Y 3R4

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