Make Sure Your Protective Systems Are Operational, or You May Get Hosed

Many policies have an endorsement that is placed on the policy if you
claim that you have a protective safeguard i.e. alarm, fire sprinklers,
etc. The protective safeguard endorsement is way a company can deny your
claim.

For example, a company states on its application that it
has a fire suppressant sprinkler system. The owner benefits by having a
discount on his policy. Unfortunately, the system broke down and the
owner didn't have the time or money to make the repairs. The owner
never got around to telling the agent or the insurance company that the
system wasn't working.

A few months went by and a tenant left a
burning cigarette in a community trash can that started a fire. The
owner is relieved that he has insurance for the $150,000 in damages.
The insurance company finds that for a number of months the fire
suppressant sprinklers were out and to the owners dismay, deny the
claim.

The owner now must pay for the repairs and will get no payment for loss of rents.

Even if you don't own a building, this could apply to your office or even your home.
There is a similar endorsement that has to do with theft and burglary alarms.

Is
your alarm armed every time you leave your office or house? Are you
doing quarterly maintenance on your fire alarm systems? Are fire
extinguishers tested? Are batteries replaced?

The company is
giving a discount due to your protective safeguards, but if your system
isn't operational then your claim could be denied. Make sure to ask
your agent if you have this endorsement on your policy.

This is how the actual form on The Hartford policy reads.
"Exclusion

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

a. Knew of any suspension or impairment of any protective system so described in the property choice - schedule of premises and Coverages and failed to notify us of that fact; or

b. Failed to maintain any protective safeguard so described in the Property Choice - Schedule of Premises and Coverages, and over which you had control, in complete working order.