Alarm Company Organized as Limited Liability Company

The Alarm Company Act requires an alarm company operator (ACO) organized as a limited liability company (LLC) to obtain a general liability insurance policy with a minimum general aggregate liability limit of one million dollars ($1,000,000) for initial licensure, and to have the required insurance in effect at the time of license renewal and for the continued maintenance of the license. If the ACO LLC has more than five managing members, the insurance coverage requirement increases by $100,000 for each additional member, up to a maximum required amount of $5 million. (Business and Professions Code Section 7599.34)

To demonstrate compliance with the insurance requirement, a Certificate of Liability Insurance is to be provided to the Bureau:

  • At the time of initial licensure;
  • When the policy expires and is renewed;
  • When a policy expires and a new policy is secured; or
  • Upon the Bureau’s request.

The Certificate of Liability should be submitted to the Bureau by the insurer or the insurer’s agent or broker electronically to AlarmCompanies@dca.ca.gov or by mail to P.O. Box 989002, West Sacramento, CA 95798.

The Certificate of Liability Insurance must satisfy ALL the following requirements:

  1. Specify the alarm company name (name should align with name associated with BSIS license).
  2. Specify the ACO license number. (NOTE: Given that an ACO applicant does not yet have a license number, this information is not required with the Certificate submitted at the time of application.)
  3. Specify the insurance policy number, and start and end dates of the policy period.
  4. Reflect that the policy covers a minimum general aggregate liability limit of one million dollars ($1,000,000).
  5. Reflect that the policy covers ONLY the ACO company applicant/licensee. No other insured is permitted on the policy since doing so can potentially dilute the policy’s aggregate limit coverage.
  6. Indicate “Bureau of Security and Investigative Services, P.O. Box 989002, West Sacramento, CA 95798” in the Certificate Holder section for the purposes of the Bureau being notified of a change in policy status.
  7. Reflect that the General Liability Insurance policy does NOT contain a retention provision.
  8. Reflect the General Liability Insurance policy provides “occur” or “occurrence” coverage. “Claims made” coverage is not permitted because it does not cover an incident that occurred during the policy term if the claim is filed after the policy term.
  9. Must be signed by the authorized agent who brokered the policy or an employee of the policy insurer.

IMPORTANT NOTICE:

Effective January 1, 2019, an ACO licensee organized as an LLC must report to the Bureau, no later than March 1 of each year, the date and amount of any claims paid during the prior calendar year from any general liability insurance policy it maintained pursuant to Business and Professions Code Section 7599.34. The claim information is to be reported on a form developed by the Bureau. The new form will be available in December 2018

Questions regarding the liability insurance requirements for alarm company licenses may be submitted to the Bureau by email at AlarmCompanies@dca.ca.gov or call 800-952-5210 or 916-322-4000. Due to high call volumes, the Bureau suggests contact by email.

Revised October 2018