Earlier this year our Dear Jac pages (C-Store, May 29) featured a story about a retailer who'd been told there was a fault on the line to his Redcare alarm system.

He waited in his shop until the middle of the night for BT to come and fix the problem. He got to 3.30am and gave up. But unbeknown to him, there were thieves on the roof and they'd cut the alarm and were waiting for him to leave. As soon as he left they broke in. The retailer put in a claim to his insurance company for the loss and damage, but it was rejected.

"The problem was that the man in the story had notification that his line was faulty and he left the premises unattended," comments Ian Hughes, affinity development manager at Bluefin insurance.

"There will be a requirement to have an alarm as a condition of your insurance and every insurance contract I know of will clearly state that, so you can't leave your premises unattended. It's written into every policy, whether it's a factory, shop, restaurant or hotel. Whenever a business is left unoccupied, the alarm should be set in full in accordance with its instructions and as agreed with your insurer.

"If thieves cut the alarm and break in, the situation is different as it's been tampered with as part of the theft but in the Dear Jac story the retailer knew there was a problem."

The small print

It's bad luck for the retailer involved, but it shows that you really do need to read the small print of your insurance policy.

Stuart Knowles, group project manager at Convenience Store Insurance, adds: "It's always very difficult commenting on other brokers'/insurers' schemes as they all differ, but there are a few points worth considering. There will be a clause in the insurance policy stating that the alarm must be 'functioning'. 

Had the retailer let his broker know that the alarm was not functioning and that BT were on their way to repair it, it is possible they could have let the insurer know and put in place amended cover. A good broker will mediate on behalf of the policy- holder to resolve problems such as this. This saves the retailer the time and stress of handling it themselves."

According to Hughes, there are three types of alarm available. "There's the basic audible bells-only alarm and normally the police will not respond to these. It is the keyholder's responsibility to attend the premises then notify the police.

"Then there are digicom alarms, but these are really on their way out because insurance companies require higher grades of alarm. With a digicom, if it goes off, police respond as and when they are available.

"Then, thirdly, there's the most common alarm Redcare. This isn't actually an alarm, but a communications system which goes to a central monitoring station. Redcare has dual verification which means two sets of trigger points have to be set off before the alarm activates and goes through to the monitoring station. They then check the CCTV and listen for noises. With Redcare, in theory, the police response is immediate, which is why insurance companies like it," explains Hughes.

"A lot of people say their alarm is linked to the police station, but unless they are a gold bullion dealer or a large money-handing house that's highly unlikely."

False alarms

Of course, the police don't like responding to false alarms. Says Hughes: "Remember that if the police are called out for two false alarms they will downgrade you for a minimum of three months."

There is a fourth type of alarm now available - IP or internet protocol which uses broadband over the internet. Says Hughes: "In the longterm this will eventually replace Redcare as it's more secure and gives out more information. For example, with Redcare, it will say the alarm has been tripped in 'zone one'. With IP it narrows it right down. It's so much more sophisticated so it can say there's a fire in the stockroom, or fridge three has broken down."

For most businesses he reckons Redcare is currently the best. "If you were a florist where you left no stock or cash on your premises overnight you could probably get away with a lesser alarm, but in a convenience store with cigarettes, wines and spirits you need Redcare. In insurance we call these items 'target stock' because they are what the thieves are after particularly the cigarettes, which are light and easy to sell on."

Knowles agrees that Redcare is recognised as being one of the best systems. "But they do vary in the level of response police give them based on the callout history, and some insurers will require a higher level of response for certain high risk types of stock.

"Some insurers will class a digital communicator alarm in the same bracket as a Redcare; others won't. The best advice is to ask your insurer/broker for guidance."

Hughes says that when considering a new client, insurance companies will look at your postcode, you store's physical security, your records of claim, the size of the store and its stock levels.

Knowles adds that if the risk to be insured is very large then the insurer may survey the premises prior to offering cover. "But in most cases the rule of 'utmost good faith' applies where the policy-holder is required to give honest and accurate information. Failure to do so could result in a subsequent claim being repudiated."

There is a common misconception that "I've got an alarm so I'm covered" but there's much more to it than that.

Says Knowles: "The alarm must be recognised by the insurer as being appropriate for the business and the stock levels. And it needs to be maintained and installed by a National Security Inspectorate- approved company.

"A good insurer/broker will be able to give you impartial advice on insurer-approved systems. In many cases insurers/brokers have access to discounts for policy-holders wanting to install or upgrade an alarm system."


Retailers are also required to service and maintain your alarm. Maintenance depends on the type of alarm. "We have seen some people try to cut corners," says Hughes. "They'll cancel the contract with their alarm company for the maintenance, but then that means the warranty is invalid and so is their insurance."

So it seems there's more to an alarm than a ringing bell. Get it right and comply with insurers' stipulations and you're covered get it wrong and it could be costly.