I punched in the code the owner gave me: 1-2-3-4. It didn’t work. The siren wailed. I tried again. Nothing. Five minutes later, the police arrived, guns drawn. It turned out the owner changed the code and forgot to tell me. The city issued a $500 “False Alarm” fine to the homeowner, and they want me to pay it.
Key Takeaways
- Fines and Penalties Exclusion: Insurance covers damages, not fines. Almost every policy excludes civil or criminal fines.
- Professional Liability (E&O): If the alarm went off because you inputted the wrong code (your error), E&O might cover the financial loss (the cost of the fine) as a liability to the client.
- Locksmith/Alarm Endorsement: Some policies bundle “Lost Key” and “Alarm Re-setting” costs.
- Documentation: If the owner gave you the wrong code, it’s their fault. You shouldn’t pay.
The “Why” (The Trap): Damages vs. Fines
The policy says: “We will pay those sums the insured becomes legally obligated to pay as damages…”
A ticket from the City Police is a fine, not damages. Therefore, standard GL denies it.
However, if the client pays the fine and then demands reimbursement from you, that reimbursement request is a “claim for financial loss.” This is a grey area where Professional Liability helps.
[IMAGE: Photo of a red “Notice of False Alarm Violation” ticket]
The Investigation: I Called Them
I asked, “Who pays the police ticket?”
1. PCI
- The Answer: Fines are excluded. However, if the police broke the door down entering, the door damage is covered.
2. Travelers (E&O)
- The Answer: If the client sues you for the financial loss caused by your negligence, E&O might respond. But for a $500 fine, the deductible (usually $500) makes it pointless to file.
3. Bonding
- The Answer: Irrelevant. Not theft.
Comparison Table
| Scenario | Insurance Coverage | Who Pays? |
| Police Fine ($200) | Excluded | You or Owner |
| Door Broken by Police | Property Damage (Yes) | Insurance |
| Lost Income (Client fires you) | No | You |
Step-by-Step Action Plan
- Verify the Code: Before the job starts, test the code while the owner is home (or on the phone).
- App Logs: Use an app like “Time To Pet.” It logs when you viewed the code. If the owner didn’t update the app, you have proof the error was theirs.
- Pay it Yourself: If it was your fat fingers, pay the $200. It’s cheaper than your premiums going up.
- Call the Station: Sometimes, as a business, you can call the precinct, explain the error, and get the fine waived as a “first offense.”
FAQ
What if the ADT system needs resetting?
If you broke the keypad? Property damage covers it. If it just needs a code reset? That’s a service call, likely out of pocket.
Did I commit a crime?
No. Accidental false alarms are civil infractions, not criminal.
Can I charge the client for the time dealing with police?
If it was their wrong code? Absolutely. Bill them for the extra hour.