Relevant Oak cover for this topic includes Fire and Security Contractors Insurance.
A tender asks for £5 million of public liability insurance, including failure to perform. Your certificate says £5 million. Can you tick the box?
The figure alone doesn’t answer the question. Efficacy insurance concerns your legal liability when a product or service fails to do its intended job. For an alarm installer, the key is whether the wording addresses the particular failure being alleged, the resulting loss and the amount the client requires. Here’s how to check before returning the tender.
A damaged cable and a silent alarm are different claims
Imagine your engineer drills through a customer’s cable while fitting a fire alarm. The customer wants the physical damage put right. You would ask your broker about public liability, including any restriction on damage to property you are working on.
Now suppose the installation is complete. A fire breaks out for reasons unrelated to your work. The customer alleges that the alarm gave no warning and that an earlier warning would have limited damage to their stock. Nobody is suggesting your engineer started the fire. The allegation is that the system failed to detect it and that this made the loss worse.
That second question is where efficacy matters. It still needs investigating: what was the system designed to do, what actually failed, and what damage does the customer say the failure caused? The whole value of the fire loss is not automatically the installer’s responsibility.
Find the clause behind the certificate
Ask your broker to show you the relevant clause, its entry in the schedule and any endorsement that changes it. An endorsement is an amendment to the main wording. Read the three together.
For example, clause 16 of this UK specialist security and fire protection policy wording addresses certain failures of contracted services or products where bodily injury or damage results. It directs the reader to the schedule for the applicable sublimit. That illustrates why the headline public liability figure can give the wrong impression. It is one policy example, not a statement of the terms Oak can obtain for your business.
For the £5 million tender, the useful question is: “What limit applies specifically if our installed fire alarm fails to warn the customer and they allege property damage?” If the schedule sets a lower limit for that event, do not confirm the higher figure. If the wording is unclear, seek written clarification before answering. Also check whether the limit applies to each claim or is shared across claims during the policy year.
Separate the losses in the customer’s demand
A customer may send one invoice covering several very different things. Separate them before asking what the policy might cover.
| What the customer wants | What to ask your broker |
|---|---|
| Compensation for stock damaged in the fire | Does the efficacy clause address alleged damage to someone else’s property resulting from this type of alarm failure? |
| A replacement for the faulty control panel and the labour to refit it | What does the wording say about your own product, defective work and the cost of putting it right? |
| Reimbursement for a day’s closure after a false alarm, with no injury or physical damage | Is there any cover for financial loss on its own? A clause requiring injury or damage does not establish cover for this demand. |
If the complaint is about detector placement rather than a faulty component, explain who chose the layout. An allegation about a design decision raises a professional indemnity question as well. Ask how the policies fit together for the design work you actually undertake.
Show who was responsible after handover
An alarm can sound inside a building without a signal reaching a monitoring centre. If the allegation concerns a missed remote alert, the installer, maintenance contractor and monitoring provider may each have agreed to do something different.
Take one representative job. Put the customer’s specification beside the handover record and maintenance agreement. Note who chose the equipment, who tested the signal path, who took over monitoring and whether anyone later altered the installation. If you subcontract monitoring but sell it to the customer under your own contract, say so. Simply describing the business as an “alarm installer” leaves out the part the broker needs to examine.
For a tender review, provide the exact insurance clause, a short description of your role and the relevant schedule and endorsements. For an actual complaint, follow your policy’s notification procedure promptly; keep test records and correspondence, and do not wait for the renewal discussion to raise it.
Ask Oak to review the requirement
If a client has asked for efficacy cover, tell Oak what system you work on, which duties you accept and what the tender asks you to evidence. Explore insurance for fire and security contractors or request a business insurance quote. A brief outline is enough for the initial enquiry; Oak can ask for documents separately.
Any quotation or cover depends on insurer acceptance and the policy terms, limits and exclusions. An enquiry does not put cover in place.
Editorial information
Author: Oak Insurance Brokers. First published 3 November 2026; last updated 3 November 2026.
Independent review has not been recorded for this guide.
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Important
This guide is general information, not legal, regulatory or personal insurance advice and not confirmation of cover. Always check current official guidance and the terms, conditions, limits and exclusions of any policy.