Opinion ID: 852323
Heading Depth: 2
Heading Rank: 2

Heading: Exclusions for Alarm Monitoring Services

Text: Apart from the fact that Tri-Etch's error does not qualify as an occurrence, there is no coverage under Cincinnati's umbrella policy for another reason. The umbrella policy specifically excludes bodily injury arising out of any act, error or omission of the insured in rendering or failing to render telephone answering, alarm monitoring or similar services. The parties contested whether Tri-Etch had any obligation to note a failure to arm the system, or undertook to report any failure within any particular time. If there was any such obligation, we think a failure to note that the customer did not meet a scheduled arming of the system is at the core of alarm services, just as much as calling to report a break-in. The jury resolved this issue against Tri-Etch. The jury's verdict necessarily established that Tri-Etch's failure breached its contractual obligation to the store or fell below the standard of care of a reasonable alarm company. The judgment therefore was for liability squarely within the exclusions of the umbrella policy. [6] The plaintiffs argue that the failure to make a prompt call was not part of monitoring because the alarm was shut off. But failure to observe and report the lack of a scheduled arming of the system at midnight is the crux of the Estate's theory of liability. In view of the jury's verdict, failing to make a 12:30 a.m. call was the result of Tri-Etch's failure to monitor or observe its own internal procedures. The Estate also argues that this exclusion renders the umbrella policy illusory if it is read to exclude coverage for all alarm services. They reason that because Tri-Etch was in the security alarm business, the exclusion would have effectively excluded coverage of all operations. We do not agree. An alarm service, like any business, can incur liability from everyday activities that are not unique to the business. It is therefore reasonable to obtain general liability coverage to insure against slip and fall accidents and the like. As Judge Hamilton explained, A professional services exclusion in a general business liability policy cannot be read so broadly as to exclude liability for any act at all taken in the course of providing professional services. Such a broad reading would exclude coverage, for example, for an automobile accident caused by ... traveling from one professional meeting to another, or for negligent injury to a client visiting an ... office. Erie Ins. Group, 921 F.Supp. at 542-43. There may be gray areas or potential overlaps between professional services and general liability, for example if an installer of an alarm set fire to the customer's home. But if failure to report a missed arming of the system gives rise to liability it is surely liability for failing to render... alarm monitoring ... services.