This Major Risk Exposure for Alarm Contractors May Surprise You

Security Alarm Services is a fast-growing $27 billion industry that encompasses alarm, fire and surveillance equipment contractors who serve residences and businesses across the United States.

Professional contractors who deliver alarm monitoring, sales and service (fire, burglar, access control, closed circuit television) and installation provide 24/7 security and peace of mind to their clients.  However, in the day-to-day effort of delivering this service, they themselves are exposed to a variety of risks, including worker injuries, property damage, lawsuits, errors or omissions and negligence.

In reality, the most significant risk to alarm contractors might be surprising.  The fact is, driver safety is the biggest risk exposure for employees of the nearly 65,000 alarm contractors operating across the U.S., which represents more than 200,000 employees.  Each day, thousands of these professionals take to our nation’s roads and highways to serve their customers.  Aside from the daily road and highway hazards that these drivers routinely face, the greatest—and 100% preventable—threat to their safety is using handheld mobile devices while operating a contractor-owned vehicle.

Distracted Driving Rates Continue to Climb

The recent data on distracted driving is sobering:

  • At any time in a given day, an estimated 418,000 drivers are actively using their mobile phones or devices while driving.
  • Every day, 9 people are killed and more than 1,000 are injured in crashes involving distracted drivers.
  • According to the National Safety Council, mobile devices are a contributing factor in 6 million accidents per year. This represents 64% of the total number of road accidents in the U.S.
  • The odds of an accident occurring for any reason skyrocket by 23 times when texting and driving.

Mobile Devices are Becoming an Essential Part of the Job

More and more, using a mobile device is a vital part of the job for alarm contractors, whether it means communicating with clients, navigating via the phone’s GPS to find a location or address, or sending information to colleagues.

This is especially true for younger employees; in a recent survey, 37% of respondents aged 18 to 34 said they felt a high degree of pressure to respond to work-related messages while driving, compared to 25% of the national average among all age groups.

The Costs (and other Ramifications) Can Be Staggering

In statistics from the National Highway Traffic Safety Administration, on average, on-the-job vehicle accidents cost businesses more than $24,500 per crash, $128,000 per injury, and $3.8 million per fatality.  Additionally, according to U.S. Bureau of Labor Statistics data, 40% of all workplace fatalities in 2016—the most recent year for which statistics are available—involved transportation incidents.

Alarm contractors can be subject to increased liability and damages when a distracted driver is involved in a crash, while acting in the course and scope of employment—particularly when operating in a state with a “hands-free” law.  These can range from catastrophic property and personal injury and loss of life, to legal settlements and fines, increased insurance premiums and workers’ comp claims.

Add to this the negative publicity, damage to reputations, disrupted operations and resulting lost customers, and what was just a momentary lapse in driver judgement now becomes a major threat to the company’s operations—or at worst, its very survival.

Alarm Contractors Can be Liable

There have been a growing number of lawsuits relating to business and contractor responsibility regarding employee use of mobile devices.  In once instance, an employee of a major paper company was using a company-issued mobile device when he rear-ended another driver, which resulted in serious injuries that eventually required the other driver’s arm to be amputated.  The company paid $5.2 million to settle the case.

There are a few legal doctrines under which the court may find alarm companies liable for their employees' actions with regard to distracted driving.

These include vicarious liability (performing actions that fall within the scope of their job duties or responsibilities; e.g., an employee crashes into a stopped vehicle while using a mobile device to conduct work business); negligent hiring, supervision and retention (improper hiring, training and supervision resulting in an employee’s actions causing an accident) and negligent entrustment (the company allowed an employee to use a vehicle with the knowledge that it was likely he/she may engage in distracted driving).

What Can be Done to Protect Contractors?

A study by software provider Aegis Mobility found that more than 85% of employers have taken some steps to enforce distracted driving policies.  But despite these efforts, only 32% of these companies responded that they are “very confident” their current methods are effective.  Given this challenging environment, what can leaders and fleet managers do to address this serious issue?

  1. Written policies addressing mobile devices are essential—but are not a guarantee of legal protection.  Policies should be based on state regulations, be clearly and consistently communicated, and ideally part of an overall risk management strategy.  While a policy does not fully prevent the company from being held responsible, it does show some consideration and responsibility on behalf of the organization, which may lessen damages.

  2. Policies that are too strict can be problematic.  If the policy is unrealistic, or if all employees are breaking a strict or zero-tolerance policy and management is aware, this can create a serious issue.  Plus, it can undermine adherence to other policies and procedures; that is, if employees know they can ignore one policy, they may come to believe that it is OK to ignore others as well.

  3. Stress the importance of the policies as an important part of the company's culture.  All employees need to be aware that these policies are there for a reason and are non-negotiable.

  4. Policy enforcement is vital.  If the company has a distracted driving policy but has never taken any steps to enforce it, this creates a substantial exposure risk when an incident occurs.

  5. Provide driver training and continual monitoring.  Provide defensive driving and other safety courses and refreshers.  Also, ensure that all employees self-report all DUIs, major incidents, etc.

  6. Run MVRs pre-hire and annually.  Some states have programs that will automatically notify employers of certain activity on a MVR (motor vehicle record).  The EPN (Employer Pull Notice) Program through the California Highway Patrol is one example.


All Risks Alarm Insurance addresses contractor exposure to risk, including General Liability, Professional Liability, Crime, Property Damage, Commercial Auto and more.  We offer competitive insurance rates through an A.M. Best “A+” XV carrier partner.  Contact us today to learn more about our coverage solutions.


Legal Disclaimer: Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.