Welcome to today's webinar hosted by Inland Marine Underwriters Association. I'm Lillian Colton, and I'm pleased to introduce today's webinar, Understanding Alarm Science from a Risk, Control, and Underwriting Perspective. I'd like to thank our presenter, Jeffrey Zwern, for preparing this presentation on alarms, as well as my colleagues, Eileen and Ali Mamriali, for coordinating the presentation with our presenter today. We have over 40 attendees, and we look forward to learning together today. Before we get started, we just have a couple of quick housekeeping items to review. To help reduce strain on your local network, we suggest that you close all unnecessary browsers and internet-reliant programs. You'll find your attendee control panel on your screen, and it'll minimize by default. At any point, you can click on the orange arrow icon and simply right-click that arrow and uncheck the auto-hide option to restore your control panel. Due to our time schedule today, we're going to reserve questions for the end of the webinar today. However, at any time throughout the webinar, you may use the Q&A box to type your questions, and we'll share your question with Jeffrey at the end of the webinar today. Or during the Q&A segment at the end of the webinar, you can open up your mic and ask your question directly to Mr. Zwern. We'll also offer a $25 Amazon gift card at the end of today's session for the most engaged attendee with the best question. So without further delay, I'd like to introduce today's presenter, Jeffrey Zwern. He is the president of IDS Research and Development Incorporated, and he has over 45 years of unparalleled and specialized education, skill, knowledge, training, experience, and peer-reviewed credentials in the alarm and security industry. Jeffrey will share a bit more about himself during his presentation. Let's give a virtual round of applause to Jeffrey Zwern. Welcome. Hi, Lillian. Thanks so much, and thanks, everyone, for coming today. I hope that you'll learn something, and of course, any questions, please feel free to comment. I started in the alarm industry in 1969. I was 9 years old in 1969. My mom was my first secretary, and she asked for a raise, of course. I fired her. No, that's not true. So I've been in the industry since I'm a very young man. I've been doing forensic work since 1980, and I've been involved in thousands of cases and claims since that time across the country. This presentation is trying to give you some behind-the-scenes forensic insight as some of the commonalities of these claims and how insurance companies can lower their loss potential in the underwriting side and also identify indicators of fraud and or for separation matters. So alarm science is scientific advice and advanced methodologies to help insurers minimize liability and loss before an incident occurs. The alarm industry, you know, when you talk about alarm systems, there are a lot of things that we assume. This presentation will hopefully clarify that so you can focus on things that I've seen both in the plaintiff and defendant side have helped insurers and also hurt insurers. Can you switch to the next slide, please? So let's talk about the duties of an alarm contractor. Nationally recognized industry standards and best practices. What is that? That's what the alarm industry is supposed to do right every day. It's not defined in a code or a standard, but it's a best practice and it's a standard of care that we follow. If a contractor does not follow it, it can increase the propensity for loss, whether it's a burglar alarm, a fire alarm, how the system is monitored, how the system detects or fails to detect and the stages it detects at, such as the incipient smoldering stages of a fire or past the heat stage of a fire. UL standards is Underwriters Laboratories Incorporated. They were founded in, I think it was 1894. They are the nationally recognized testing laboratory that provides standards for many different products, including alarm systems. So most of the alarm equipment that's being sold is listed. The question if it's listed for its intended purpose becomes another issue on the forensic side. NFPA standards is the National Fire Protection Association, also founded in the 1800s. The standard that we follow is NFPA 72. It used to be called the National Fire Alarm Code. It's now called the National Fire Alarm and Signaling Code. In addition to that, NFPA has other substandards, such as NFPA 720, which is on carbon monoxide, NFPA 730 and 731, which is on physical security and guide to premises security. We have NFPA going from, if we look at the 2000 edition, going back to 2002, it went from 2002, 2006, 2010, 12, 13, 16, and 19. Most states follow the prevailing industry standard. Some states are three years back, but generally the language is the same. The authority having jurisdiction could be an electrical inspector, a fire official, a construction official. It could be the insurance company, the insured. It could be all of those things. So generally on fire, the AHJ, him or her, will make a determination as to what needs to be done. And alarm contractors are duty bound to follow that. Then we have the special instructions and log only events and the notification dispatch instructions. So at the central station side of this, besides the name, the address, and who the police are to be called, who the people to be called, we also have instructions that could put into this database. And this database is under UL 1981 entitled Central Station Automation Systems. If the instructions are to log only, for example, an alarm, if it doesn't get reset within a certain period of time, or not to respond unless we get two zones, that's when we can have a breakdown in the performance of an alarm system. And if you were to ask for a central station activity report of all the activity for a particular day, you wouldn't see those instructions. You wouldn't know about those instructions. You probably wouldn't know to ask those instructions. Notification dispatch instructions. We could have it insured that says, listen, if you get a fire alarm, don't dispatch. You look at the activity report, you see there are alarms, but you don't see the other information. So if there's any case or claim, it's important that you send a evidence hold letter to the alarm company. The central station is usually a different entity to make sure that evidence is preserved and it's not purged. You can switch. Next slide, please. So under contract warranty and safeguard endorsements, using the alarm system as a way to have a contract warranty or protective safeguard endorsement, what's being used today is not good enough. I'm going to explain why. It's general. It's not specific. And when there's any general issues in these policies, what we find is we usually find ambiguities. What the insurance industry used to think of as being what the alarm system was has materially changed, which you will find out today. And how to make it better now is really the primary focus of this presentation. You please switch the slide. Oh, we have a poll. Okay, so it looks like that people are aware, well, let's go talk to the no, so ULA-27, just so you know, is the standard for Central Station Alarm Services. UL-985 is the standard for Household Fire Warning System units, which is for residential, and UL-1023 is for Household Burglary and Household Burglary Systems. So the question is really focused on what recently changed. There are about 22 to 24 members of ULA-27, and as a result of the pandemic, which was a temporary situation where operators could work from their home, several stakeholders that had a major incentive to increase their profitability voted to allow Central Station operators, yes, to work in their home permanently. I'm the only one that voted no, and let me tell you why. First of all, most people in the insurance industry have not been told about this. If you haven't been told about it, let's talk about the consequences of an operator being at home. In a Central Station, no cell phones, no social media, no Instagram, no interruptions. In a home, what are we going to do? We can't control someone on the cell phone. We can't control texting. We can't control if there's a power outage or there's an internet failure, and then we've got a major delay or potential non-response. So the alarm industry, or the people that voted for this in the alarm industry through something called the Monitoring Association, which is formerly known as the Central Station Alarm Association, deciding their infinite sagacity, they're going to put a camera inside the operator's home. Well, they're not going to watch the camera in real time, so only after a disaster is there going to be investigation. They're going to put a panic button essentially in the keyboard, but what if someone comes into the home and takes a picture of the printout of an account with the password on it? What if that person's a criminal? There's no way that anyone can reliably monitor an alarm system in a home, in their apartment, without being distracted. If you think you get distracted driving, what about when you're home and everyone's calling you and you're answering the phone? Engineers need to stop this nonsense, this disaster, and require that all alarm systems that they're going to insure not only go to a central station, but are being monitored within the four walls of the central station. Think about the money that goes into a central station. We're talking about millions and millions of dollars, and now they're going to let someone go home, and they're doing it, and I can tell you it's just a matter of time. From the insurance risk analysis side, there are central stations, by the way, that will still not allow their operators to go home, but for profitability purposes, the central station can really lower their cost by having smaller central stations and not having any staff, not paying overtime, things of that nature. This change came up. No one seems to be aware of it in a general sense in the alarm industry, and they're keeping it a secret. Their position is that subscribers don't need to know. Let me ask you this question. If I was your alarm company and I said, listen, I'm going to be monitoring your alarm a little differently. I'm going to monitor it at home or an apartment. I can't tell you who's going to be doing it, and I can't supervise them. Would you agree to that? Would you want to lower the monthly fee, or would you want to have an informed choice to say, you know what, I'm not really comfortable with someone being out of the four walls of the central station? That question is not being asked. That information is not being disclosed. To me, as an alarm expert and certified fraud examiner, it's very deceptive. Consumers, everyone has a right to make informed choices. If the insurer is relying on something that really is not what it used to be for over 150 years, we're relying on something that's completely unreliable. What's next? Are people going to start monitoring from Ubers as long as they're not driving? Foreseeably, we know there's going to be problems. In order to limit our loss potential, we need to put in these protective safeguard endorsements that the central station will monitor within the four walls of the central station. If they don't, obviously, there's an option to deny coverage. Again, no one is being told this. I'm trying to get that message out, but it's not being told. People are literally shocked that they're keeping it a secret. Again, I think that it's going to create a tremendous amount of liability, but I don't want to risk someone's life, someone's property, because an operator could be distracted or they could lose power. In a central station, we've got triple redundancy, we've got backup phone lines, we have backup paths. At home, we have what we have. To exit out of these changes, again, all monitoring by the central station operators shall be performed within the four walls of a central station. The issue of changing it, and the reason I voted no is because they're trying to legitimize this. Think about it. In the 1800s, they were in a central station, but in 2021, we're going to let people go to their homes? The premise that it was based on as to why they wanted to do this is they said, because we want to address people with disabilities and people with religious beliefs. Well, federal law has been protecting that for over 50 years, so that's nonsense. There was a zip recruiter analysis that was done to people who are working from home, but not in the life safety industry. And then there was some other issue related to keeping employees longer by keeping them at home. Not for this industry. No way, no how. There's no way that we should be accepting this. Whether they want to disclose it or not, this needs to be changed immediately, in my opinion, for anyone that you're insuring or thinking about insuring. If you could switch, I'd appreciate it. Thank you. So what's a central station monitored burglar and fire alarm system? What does that mean? What standards apply? Could you, next slide please, thank you. So here's a polling question. Interesting. Very interesting. Okay. The answer is it's monitored by a central station. So, here's the misnomer. The UL Certificated Burglar Alarm Service. Could you go back to the statistics for a moment, please? If you can't, if not, it's fine. The UL Certificated Burglar Alarm Service currently has less than 40,000 certificates. In order to install a UL Certificated system, you must be an ASC, an alarm service company. And since insurers are not requiring UL Certificated systems and sometimes are being led to believe that if it's a UL-listed central station, therefore the system is certificated, it's not accurate. All it means that a central station, it doesn't have to comply with the standards and there is no UL certificate. If you were to look at a central station today, if the central station had 300,000 accounts, you'd probably have 10, 10 that have a UL certificate because it costs more money. Most insurers are not requiring it and therefore it's the path of least resistance. It also costs the alarm company more money. Now, let's talk about UL 681 and 827 so you know what they are. UL 681 is the installation and classification of burglar alarm systems and panic alarm systems. You can comply with that and become certificated if you comply with that or you can just try to meet that. Most alarm companies don't know what UL 681 is, let alone meet it. The customer says, I need an alarm system. Whether it's one motion, 10 motions, no one knows. UL 827, as we said before, is the standard for central station alarm services. So the misnomer about what a UL-listed central station is and what it provides has got to be really paid attention to because if we say install a central station monitored alarm system, it doesn't have to comply with UL standards. The central station is UL but the actual methodology does not have to comply and therefore the system is usually less reliable. We can go to the next slide, please. Thank you. So a central station monitored burglar alarm system, a fire alarm system, if you go back for a minute on the slide before this, please. Thank you. So what standards, if we're going to say install a central station monitored burglar alarm system, you would assume that there are standards. There are no standards because there's no such thing as an alarm that addresses all of the issues within one standard. The only time the standards come into place is when it's a UL-significant system. I can tell you that the control panel has to be listed under UL 365, which is called police station connected alarm systems, but it doesn't connect to a police station. The standards are going to be what the customer is willing to pay for, what the salesperson offered. There could be one motion, 10 motions, line security, no line security, doors are contacted, doors are not contacted. It could just be an alarm that's going to a central station that calls the customer's pager and never even notifies the police. And then the customer, the insured is supposed to call them. So the standards that apply are really what between the alarm company and the insured and the insurer is relying on the word central station. And the problem is, is that's where we've got a huge risk because we can have a 50,000 square foot warehouse with a central station monitor alarm system and one motion detector or no motion detectors. So this language has to be changed in order to better protect the risk and also make sure that what the security system or the alarm system is commensurate with the risk. You can go to fire for a moment. Thank you. So on fire, we can have pull stations, smoke detectors, rate of rise, heat detectors. It could be connected to the sprinkler suppression system. If it's not clearly defined as to what is happening, we don't know what we're going to get. I can tell you since 1980 that over 70% of what I've inspected is done wrong. And there's no perfect alarm system clearly, but the scheme of defects and regularities is mimicked across the country. We see the same problems. For example, there's no such thing as a central station monitored fire alarm system without standards and codes that apply. But if you say that to an alarm company, they can do whatever they want. If you say that the system must comply with UL 864 10th edition, the control unit and NFPA 72, that's a little different. Because most control panels in businesses, when I talked about listed for its intended purpose, why would an alarm company install a control panel that's listed for household use in a business? To save money. So it's a household panel. It's not listed for use in a commercial premise, let alone fire. It will still work, but it doesn't have the safeguards and protections that a commercial system has. Therefore it complies with your plain language, but it doesn't meet the standard of care. And some of these systems are not inspected by authorities having jurisdiction. Some of them were existing. So we have to make sure not only is it the proper language, but that we have all the other attributes that make the system reliable as part of your contract warranty or protective safeguard endorsement or risk analysis. You can switch a slide, please. Thank you. Another poll. Interesting. Okay, let's talk about line security. If you can leave this up, I'd appreciate it. So in the 1800s, we have records showing that the first thing that perpetrators would do is cut the phone lines. So it was happening in the 1800s. It's happened since that time pretty much continuously because the phone lines that enter the protected premises are vulnerable on the outside of the premises. If it's a building with multiple occupants and you say, how do they know what phone line to cut? It's really simple. They cut them all. The line security is crucial to the effectiveness of that signal getting out. And when I started in the business, they would cut the phone lines. That's all they would do and break in. Now what they do is they attack the system. They break in, they run to the control panel, rip the panel off the wall, destroy it, destroy the radio. And now the question is, what if any impact or nexus is there between a one and two-way radio? If I said to him, install a wireless radio alarm transmitter to a UL-listed central station, that's not enough information for you. So let's talk about it in more detail. A one-way radio can check itself with the central station once a day, once a week, or once a month. Assume a perpetrator breaks in, rips the radio and panel off the wall, we'll know about it either in a day, a week, or a month. Not too impressive. The problem is this language is not being articulated in a way that we can understand the difference. So the chances of the radio coming up as being non-functional or not working could be a day away from the actual burglary. That's extremely high risk. A two-way radio checks itself usually every 300 seconds and critically is supervised. So the radio is checking itself every 300 seconds. Someone rips the radio off the wall, we'll know within 300 seconds. The next issue is that when they get that trouble signal or radio comm signal or comm failure signal, that they understand the system is armed, it's not a trouble, it's an alarm. If they break in and trigger the burglary and they don't attack the radio, it just sends a signal over the radio. The radio concept is to make sure we have reliable communication means between the insurance premises and the central station. And if the radio only checks up once a day, we're not getting any response. And burglars are very good at knowing where the systems are. It's not the keypad, it's the panel. And they'll find it very quickly. We had burglars break in from the roof, adjacent stores, when the panel is in a common area. So we want to require for high risk, high burglary exposure premises, not only a two-way radio, but the radio is supervised and it checks in, for example, every 300 seconds. That being said, you have to realize that in some areas we don't have the same signal strength as others. So we may have to increase the polling times to five minutes, to 10 or 15 minutes, so we don't have false troubles. But if that radio was attacked and it doesn't check in, or if the phone lines are cut, there's got to be an explanation, believe it or not, to explain what are the notification and dispatch instructions. And if they have a two-way radio, but they're not supervising the polling times, it's meaningless because the radio goes down, it goes to a log only file at the central station, no one's notified. Police aren't notified, subscribers not notified. So when we talk about radios, we talk about line security, it's got to be supervised, it's got to be two-way. If they can't do 300 seconds, 15 minutes, I'm fine with that. But when we get further out, a day, a week, or a month, it's completely untenable. If you could switch to the slide, please. Thank you. So we talked about the importance. Is there any application where an insured could get a one-way radio? Sure. I'd rather you require a two-way radio. It's not that much more money, and it provides a tremendous degree of additional security that, but for you having a two-way radio, you can't get. I've also recommended to insureds and others to have two one-way radios. So if they rip one off the wall in one location, we have a backup radio to take over. But again, the two-way radio is really what we should be focusing on, and the more specificity, the better. If you could switch, please. Thank you. What standards apply to UL-certificated burglar alarm systems? Now, less than 1% of all alarm companies are UL-certificated, and most states don't require any form of competency licensing to get in the alarm business. You pay a fee, and you're an alarm contractor. Other states, where I got my training, you have to prove a certain amount of supervisory experience. You have to take a test, continue education. So the standards that apply are the following, UL-681 and UL-827. Unless they issue a UL certificate, it's not UL-certificated. If they say it's a UL-equivalent system, that's deception. If they say the system is designed to meet UL standards, irrelevant. You need to see the certificate, and for purposes of causes of action, to the extent that there's a loss, the separation, and when you look at that UL certificate, it's got the alarm company's signature. It limits the liability of UL on the document. It has the subscriber's signature, but it doesn't limit the alarm company's liability. So a lot of cases I've been involved in, we sue based on breach of the UL certificate. Don't have to worry about limitation liability, third-party identification, waiver of separation, all those things go away. So it's critical you look at that UL certificate and make sure it's not been manipulated. A lot of them look like a UL certificate or colored like a UL certificate, are numbered, but they're not a UL certificate. And you can go to ul.com and see what a real UL certificate looks like, and you can cross-reference it. And just so you know, all UL certificate burglar alarm systems are not created equal. I could issue you a UL certificate, and guess what? I don't have to have line security on that UL certificate. Not required. Depending on what modular that you follow, what we used to call grades and extents, that will make determination. So if you have a UL certificate burglar alarm system, line security is optional. Chat, you know, two-step detection is optional. Very important. Thank you. The way to help in using an alarm system in these cases is you can make it a silent witness to the event. For example, I just testified in the case of bench trial in federal court in California, where a large insurance carrier was being sued by an insured for failing to pay the claim, bad faith causes of action, etc. And they said the alarm must have failed. What the perpetrator did not know was that there's internal event log information and algorithm information. I was able to harvest to show that what this person did is he bypassed all the zones, armed the system, and left. So when the fire was intentionally set, and remember, he has the code, so it's not like a burglar could just go in, no signals went out because they had been bypassed before. And when you disarm the system, it takes the bypasses out. If you know what to look for and you preserve that evidence, you can harvest that information to show he bypassed 15 zones before he left. Why? And then there was a fire. So instead of looking at the alarm company, we have to test to make sure that the alarm science matches what the insured is saying. If we require things that are very, that have language that is unambiguous, that language that puts the burden on the alarm contractor to meet these standards of care, puts the burden on the insured to pay for these standards of care, we're going to dramatically minimize our loss potential. There's so many cases that I've been involved in where the alarm system is completely inadequate. They get do-it-yourself alarm systems that are tied to a UL-listed central station, and they're like a toy. And you're insuring 20 million dollars based on this system because you didn't specify enough. If you didn't specify enough and the customer can save money, they most likely will. They're not alarm experts. So the idea is to tap into my knowledge to get that language on, and I'm glad to draft something for anyone that wants it, to try to give you some of the golden nuggets, what I call. The serious defects and irregularities in alarm systems are just, they permeate throughout the industry. Why? Because there's a problem with training, there's a problem with supervision, and a lot of these companies are mass marketers. The person that sells the system sometimes won't even come out and do a security survey or a needs analysis. What they'll do is they'll say, okay, how many windows do you have? How many doors do you have? How many motion detectors would you like? We need to change that. That decision should be with you, not with them. Because when we give them that decision, we now are letting others that we don't know what their education skill, knowledge, training experience, in the alarm machine to make decisions that can affect your loss potential. So for example, I recommend that every alarm system commercial has a recording of opening and closings. Was the system armed? Was it disarmed? Was it bypassed? I had a case in Dade County many, many years ago in Florida, where there was a burglary. The guy had an alarm system and he said, you never told me how to turn it on. So I mean, these are the kinds of investigations that are very important. And we see non-supervision on protective loop circuits, something called failure to install an end of line resistor. We see improper battery standby time. They come on a Friday night, they turn the power off, and a holiday weekend, by Sunday, the batteries are dead. So we need to educate the central station to some degree that if you get a, or the insured in both, you get a low battery on a Friday night and a holiday weekend, the insured has to go investigate to make sure that power gets restored, or the battery is going to discharge, and we're going to have no coverage. We're also looking at equipment that's not listed for its intended purpose. Equipment, for example, we have a warehouse that has pet immune motions, because they're worried about rats causing the alarm to go off. I don't really care about rats. What I care about is that I have the catch where I can get the burglar. If the sensitivity is turned all the way down, the burglar can walk right past the motion, never even see it. Sometimes the motions are too high. Sometimes the inventory is moved around that blocks the motion. There's anti-block technology. These are things that can be specified that are not that much more money, but make a huge difference in making sure that the coverage pattern of the motion has not been blocked, accidentally, intentionally, or otherwise. Those are some of the critical aspects that we look at. Again, the central station. What are the instructions if you get a radio test fail? Many central stations handle that as a trouble. Special instructions have to be there to explain that it's an alarm. Someone's got to respond. If it's a building and the police can't get in, and you're outside the door, and it's a high-rise building or a building you can't get around the back, they're going to continue with the burglary acts. So not only does the alarm have to get a response, but someone's got to come in and respond. And there's got to be more than one person emergency contact list. Sometimes they call the customer, doesn't hear the cell phone. It should be at least three to five so we can ensure someone shows up. Video surveillance is another thing that we can do to bridge the gap. So let's talk. Thank you for switching that. I guess that means I'm talking too long. Okay. No one ever called me shy, by the way. So successful burglary commercial premise with the central station monitored burglar alarm system. Here are the fact patterns. Premises has high-risk, high-burglary exposure merchandise. Burglar comes in through the ceiling, attacks the system, attacks the zone expansion module. No motions go off, and they clean the place out. He attacked it on something called the data bus. And the data bus is a vulnerability in all alarm systems if it's not isolated. And the majority of them are not isolated. Over 99% are not isolated. So they put the zone expansion module in an area where when they came down from the ceiling, they could just attack it. It's got to be in the protected premises. There was no requirement for quantity of motion detectors. There was no requirement for type of motion detectors. There was no requirement for line security, even though the burglar did not cut the phone lines. So you basically had a glorified radio shack system in this high-risk loss, and the insured was trying to deal with the fact that the alarm didn't work and they were blaming the insured. And maybe they were right. In this case, they were wrong. And the reason they were wrong is because the insured followed the plain language of what they said. And when the deposition was taken of the carrier's agent, not the agent, but the risk manager, they asked him, what did you base your standards on? And he said, common sense. Not a really good answer. We don't live in the world in forensics and common sense. But common sense to him was never clarified. No training, no supervision. He basically, it was a one-size-fits-all approach. If you're going to insure these properties, we have to make sure that the language in the protective safeguard endorsements, the contract warranties, are as sophisticated as your risk control procedure, are as sophisticated as your underwriting procedure, are as sophisticated as your risk mitigation efforts. Because if we allow people to do what they're doing and wait till after loss to identify for supplication, that's okay. But how about intercepting this fact pattern? Detecting the burglar early, having a response, and changing the opportunity. So in burglaries, there are three, there's something called the crime triangle. You've got motive, intent, and opportunity. What the security system does, what an alarm system does, when it meets alarm sign standards is, it takes the opportunity away. That's what we have to start doing, proactively versus reactively. And we're gonna lower our loss, it's gonna help our insured, and it's gonna keep them in business. I mean, some of these business interruption claims can be more than the loss. Next slide, please. And again, fire alarm system in a commercial premise, burns down the building with the central station monitor fire alarm. Yeah, it was monitored by a central station, the central station was UL listed, but there was special instructions on the account, that if they get a water flow alarm, log only. Why? We don't know why. Now, could the insured know? Didn't seem to know. But again, the issue is, we have to walk these alarm companies through the process. There was another case, very close to this, where they powered the alarm system down, there was no working fire alarm system at the time of the loss. The protective safeguard endorsement really didn't address it, it was vague. But if they turn this, if they power the system down, if it's not turned on, if it's not being monitored, if there's a problem with the sprinkler system, you need to know. And we need to guide them to some degree. Obviously, we can't send them a book. But what we can do is create certain patterns of practice, where the reliability of the loss of reliability has been minimized, because we've set forth a template that's designed to increase reliability, increase detection, and increase notification. You could switch your slide, please. Thank you. So if you can go back to that one slide, I'm sorry. The one before that I didn't address this. So getting back to what happened, how the alarm system was utilized as a witness. This was earlier in the arson. But again, even if the alarm system has been burned or melted, sometimes the chips can be taken out, and that could become information that can be used in your case. A lot of times there's a fire, and the fire is undetermined. They think it's arson, they don't know. Or you have a cause and origin investigator that looks at it, and then he disputes or she disputes what the fire official says, or it's vice versa. And then it's really not really clear. Using the alarm system as a witness is critical. How valuable is that? In 1998, a man was convicted of murdering his wife based on the alarm evidence, and he was sentenced to life in prison without the possibility of parole. I was the expert in his retrial, and he was set free according to the jury because of me. You can go to my website, Alarm Expert, you can look at State of Missouri v. George Revelle. So if I can get a guy off murder charges based on the alarm system in 1998, I surely can use this information to detect fraud, arson, manipulation, things of that nature. But you have to know what to look for. I get photographs all the time from an investigator. Here's the alarm system. Jeff, what am I looking at? I'm looking at the front of the alarm system. I don't have to make the model number. I don't have to find a wiring termination. Nothing is taken, nothing is looked at, and there's a question, why didn't the alarm work? We need to get that information. We need to preserve that panel. We gotta look at the wire. We can't just let a generalist go out there and not look at the wire, let's see for tampering effects, things of that nature. So if there's a loss or if someone's doing an inspection, harvest the information. They can look up to see if the panel's not listed for commercial fire, if it's listed for household burn, just based on the plain make a model number. So that's an easy exercise. And to the extent that you are doing onsite inspections, instead of saying alarm system, yes or no, maybe you can go a little bit deeper. And I'm glad to help anyone create that form so they can use it to their advantage. And also it's helping the insured because the insured probably doesn't wanna have a catastrophic loss. And we can only do what we can do, but by instituting these alarm science methodologies that make a difference in your losses and of course, subrogation, things of that nature. If you could switch it, please. Thank you. If they breach the contract warranties, what if they didn't turn the alarm on? What if the alarm was impaired? You need to know that, you need to know where to look and you need to do it within a certain time. So there's certain things that can be asked of a central station. For example, let's talk about we have a potential subrogation. What if the operator is working from home and took the 14 minutes to dispatch the fire department? Clearly you need to know that because but for that operator taking 14 minutes, maybe the damages would have been eliminated or significantly minimized. But if you don't know they're working from home, you're not gonna ask that question. So if they breach the protective safeguard endorsements, the way we can fine tune that is create warranties and safeguard endorsements that are very, very clear that we can compare them to the actual physical evidence, compare them to the central station records, compare them to the internal event log of the control unit. The policies and procedures are doing these checks and balances. When there's a loss, there's a question about the alarm. A lot of times it wasn't turned on. Oh, the clean service is coming. Well, it's gotta be on. And if they decided that they don't wanna give them the code or they decided to bypass zones or the system is partitioned where you have the whole warehouse is on one keypad and the office is on another and they only arm the keypad in the office. Well, guess what? The warehouse is completely unprotected. We need to make sure that gets addressed before a loss. If you can switch to the next slide, please. So this is a case that I worked on in 2002. This was a burglary in a, it was a premise that basically contained like sundry items you'd find like in a 7-Eleven, things like that, some alcohol, some burning fluids. And if you can switch to the next slide, please. What happened here is that the, just one more slide, please. This is just an overview of the site. So what happened here is someone broke in to the garage door, penetrated through the garage door, and there was a microphone within 20 feet of the door that was designed to listen for the sounds of forcible entry. The sounds of forcible entry make a certain sound and frequency, the microphone is set at that frequency. The burglar came in, the burglar burglarized, and then on his way out, he started a fire. And the microphone never picked up anybody. We'll talk about why in a minute. You can just go to the next slide, please. So here, one more slide, please. Thank you. Just to give you an idea of the cataclysmic event here. The fuel load in here, I mean, it got to the point where the fire department had to fire defensively because it was high rack storage, and the place was, by the time they got there, it was very late in the game. You can go to the next slide, please. And one more slide. So that's an example of overview. I had these perpetrators at the garage door when they sawed a hole in the middle of it, but the microphone was very sensitive. So instead of solving the problem or dealing with the false alarms, in other words, this was a microphone system that the central station could listen in and see if it was real or not. What they did is they turned the volume control all the way off, like your radio. So you could hit it with a hammer and it wouldn't dissense you. So, but for them doing that, I had this guy at the garage door long before he started the fire, long before he did multiple trips to get stuff out of the premise. Mission critical, in regards to what the causative factor was and why the system failed. Go to the next slide, please. So that's just another view of the cataclysmic event. Is that, so thank you. So now door 11 is where the perpetrator came through, just to give you a little, give you an overview of what happened, a little more information. If you go to the next slide, please. That's the video stuff. We'll just switch that just for purposes of trying to save some time. So here is the area that the burglar broke into. And once he got in, he invited his friends, seriously, and it became just a disaster. And I'll give you some more inside shots from 2002 as they worked their way through the warehouse. So that's the door the burglar came through and penetrated through the center of the door. You can see the knockout there. And that's the microphone. And then there's the door. And the microphone was very, very close to the door. It just was turned off. Now this is some shots, thank you, of the perpetrator inside the premises. And you're gonna watch as we go through the slides, maybe just another slide, as he walks through and up to the point that he, you can see the round dots of multiple perpetrators, taking stuff down. And then you'll see right before he lights the place on fire. You can go to the next slide, please, thank you. You can just go back one. So, and now one more, please. Thank you. Yeah, so they're doing their thing. They're walking around, multiple people. Go to the next one, please. Just maybe stay like 10 seconds on this and go to the next one. Five seconds. Back and forth there. They're knocking over like these big barrels, making a tremendous amount of noise. Nothing picks them up. Okay, here we go. Just go another slide, please. It's coming up. And I think it's the next one or two slides where you'll see him and then the fire. It should be coming up shortly. One of the main hallways, there you go. So let's stop it right there. So he sets the fire. By the way, he was a convicted arsonist. This wasn't his first dance with fire, but what he did there was enough to put the fire, I believe it burned for either was seven or 10 days. Until the fire eventually went out. Again, with the right alarm system being properly inspected, tested, and maintained, that's another issue. When you look at UL-certificated systems, they're required to be under a maintenance contract. All the other alarms, not required. Fire alarm systems, you gotta inspect yearly. Great, what about the burglar alarm system? They haven't been there for 10 years. No one's inspected it. No one knows if the motions are covered, if they're blocked, if they're working. So we should probably require at least a yearly inspection on the alarm system with a written report of the findings. Why do we want that? Because if the insured refuses to fix the alarm system, it's a material change from what they represent in order to get the coverage. But we need to create the placeholder so we can know what to look for and they've gotta keep those records. The next slide, please. The monthly fee that people pay for the alarm system is not maintenance. So proactive maintenance is where it's at. That's why UL-certificated systems have a maintenance contract. That lowers the chance of something failing that would otherwise be undetected from the system keeping you armed or disarmed the system. Go to the next slide, please. Everyone on this webinar, if you send me an email, I will send you a copy of my peer review book called the Alarm Science Manual. I've been an instructor to the NYPD for 24 years. It's part of their training curriculum. It contains a multitude of case studies, the 25 principles of alarm science. It doesn't tell you exactly what the end result was, but it gives you an idea of how these fact patterns laid out. And I'm hoping that will help you in your analysis of cases and claims, either proactively or reactively in the world of risk analysis, minimization of underwriting techniques, because alarm systems can make a huge difference in loss prevention and the loss potential, but we need to have an even playing field. The standards are not there that are being followed. The codes aren't being followed. Fire, it's more likely they're gonna be followed. But again, how do we verify that? We put certain things in place. So this language, central station alarm system is eviscerated to the point where we've got more specifics and we put the alarm command notice of what they have to do. So I'm glad to open up for any questions. Go back to Lillian. Yeah, thank you, Jeffrey. And so for all of our attendees, we'll do Q&A right now. And so you can either raise your hand and we'll open your mic so you can ask a question or you can type your question into the Q&A box, into the question box, and then we'll receive it. And I can ask Jeffrey the question. So I, like I said, two ways to do that, either raise your hand or type in your question. Okay, we'll just wait a few minutes for those to come in. And Jeffrey, while we're waiting, oh, okay, I do see we have a hand raised and I'm going to open up the mic for Greg Slayton. And let's see. So also Greg, if you can unmute yourself. Yeah, you should be able to speak now. Looks like someone's talking, but I don't hear anything. We really want to answer your question. Yeah, I see his mic is open and he should be able to speak. Greg, do you want to try typing in your question? I'm sorry, we can't hear you. Okay, he's typed in his question and I'm sorry about that, right? Let's see. What question should be asked to brokers to verify burglary alarms before insuring? With regards to the questions should be asked is the detection scheme. In other words, we have, we want to have perimeter, do they have perimeter protection? Door contacts, for example. Do they have motion detection for interior detection? How many? What areas are covered? But more importantly, what areas are not covered? How is the signal being monitored? And what type of communication methodology is being used to transmit the signal? And is line security employed? Now if they say yes, it could be a one-way radio. So the question is, if they say yes, one-way radio, that's probably, may not be good enough for you. So the line security, I think we need to ask the question, but also create some type of template to say, look, we expect perimeter protection. We expect something called volumetric motion detection, which basically means, and again, you may have to balance this, anywhere a perpetrator moves within four steps, we have an alarm. May not be able to do that in a large warehouse, but we have to make sure that there's a high probability that the alarm will detect the burglar, whether he comes to the roof, the wall, the door, and that the signal going out is going to reliably get to the central station. And that the checking of the actual transmitter is going to also be checked on a basis that we can detect an attack to circumvent that device. I also believe in audible alarms for burglary. If a siren goes off, the burglar now realizes they've been detected and they have to make a decision. A silent alarm is great for some systems, but I really don't want to catch the person. I want to deter them. Detect, deter, delay, deny. So what sensors do you have for the premises on a perimeter basis? What do you have in the inside? Is there anything in the premises that could actually block the motions? Do the motion detectors have, you know, anti-block technology that if they get blocked, it opens a circuit and shows trouble on the keypad? And then again, how that signal gets to the central station? Who's going to respond? If one person's on the list, who's going to respond? And is there anything outside the protected premises, such as in a fenced area that needs to be covered? Is there going to be video surveillance they can remotely view? I think to try to get an understanding. Also, I would ask for, again, I know you only can ask so much, but you're asking, what would I ask? So I'm putting everything in there. A copy of their license would be great. I just had a case where they gave the guy a license, but it was a fake license. It was someone else's license number. And I think that's a good idea. And also, if, for example, if you have a 50,000 square foot warehouse and the alarm costs $499, that's probably a good indication they have the wrong alarm system. They don't have to spend $25,000, but $499? So what's the price of the alarm system? It's important. The monthly fee, if it's $20 a month and below, it's not going to have line security. If it's higher, it's more likely. Again, take all these ingredients together, create a formula, and say, look, a 10,000 square foot warehouse, if it had high risk, is probably going to be at least $10,000, not $499. So I think if it's a free installation, if it's a $499 installation, if it's just taken to the phone lines or if it's on the internet, again, it may be a line security device, but if it's not supervised, it's meaningless. So we need supervised line security. If they don't have it, it gets kicked back. We want supervised line security. Give us the make and model number of what you're doing. If there's a resource to get the answer what the right make and models numbers are, that's really important. Thank you. So we have quite a few questions. Terrific. Yeah, this one's from Craig Kolakowski. What's your opinion on internet burglar alarm transmission, which a lot of insurers are going to? Yeah, I don't like it, and I'll tell you why. There are a lot of problems with the bandwidth on the internet and its interference clashing with the internet communicator. What we find in a lot of these cases is there's so many problems intermittently with this line going up, down, data clashing, that the internet communicator goes down. And when it goes down, that's an alarm. And if it goes down too many times, the insured ends up with false alarm charges. So my position is why we want to connect to the internet that has all this stuff going over it versus a radio transmitter, like a glorified cell phone. We eliminate all the data clash. We eliminate all the irregularities that we can't control and the ones that we can control. And if someone cuts the phone lines, instead of us knowing it's just a cut phone line with a radio, we're still getting alarm signals as they're walking through premises. Front motion, back motion. I would stay away from internet communicators. It's just too problematic. You know, the internet provider, the internet provider fames the alarm company, and nothing gets done generally. This one is from Rosita Cantra. Is there a list of central station alarm companies available that have allowed the operators to work from home? Yeah, that's a scary one. They're all allowing. ADT's doing it. Other large central stations, they're all allowing it. There's a couple of subcontract central stations that don't allow it. But I think there's, they want to keep it a secret. So if I gave you a list, it could never be all-inclusive, but I would say this to you. I don't want you to have to look at a list. Just tell them. It's got to stay in the center, because if you look at a list and I say this one's not doing in-house monitoring today, and six months from now they start doing it, you're done. You're back to this unreliable path. So my position is, it's got to be in the four walls of the central station, period. If you decide to do it, it's not going to work. We're not covering you. And if you are not doing it, great, but if you're doing it, it's not, it doesn't, it does not allow you to get coverage if you're not keeping within the four walls of the central station. The problem is companies are changing, they're shifting. There's a handful that will only do it in-house, but I'd like to just have the requirement within the protective safeguard endorsement. It's got to be within the four walls. I don't know if anyone really thought that we'd get to this point. It's really, it's really taking the alarm machine, turning it upside down. But again, profitability over the safety and security of the contents and the insured, etc. That's what it's all about, unfortunately. We have to stop that by requiring things that don't create a huge gap of exposure to us, needlessly. Thank you for that. This one, this is Greg's question that he was trying to ask earlier. I usually see cell phone backup as opposed to radio system. Do you find cell phone more reliable than radio? Okay, thank you for correcting me on that. It really depends, but a radio system like a company AES Radio could be more reliable. The major wireless radio alarm transmitters work on the LTE network. It used to be the CDMA network. We're working on a network where we're going to be pretty much immune from these changes going from 4G to 3G to 2G or 2G to 4G. So I would say as long as it's supervised with a two-way, it's just as reliable. However, on some of these other radios that work on a true radio network through something called triangulation, the problem is that every device in a premise is not only a transmitter, it's also a repeater. And if you have a bunch of premises in this triangulation area and some of them stop getting the systems monitored or closed out, whatever it is, now you've got issues of getting the path from the protected premises through the network operation center, which is basically the hub, and then redirecting it to the actual central station. Because they don't go directly, depending on the manufacturer, generally they go through a network operation center and it's retransmitted. I am fine with the radios. I think the long-range radio was okay, but I worry about this issue of degradation of signal strength or amplification. So I would recommend a cellular unit, but again, it's designed for the alarm industry. It's listed for commercial burglary usage, and it's a lot more than a cell phone and doesn't really require the same type of characteristics as a voice cell phone versus sending data. Generally, I found them to be the most reliable. The other technology is very reliable, but it's not always available. It's a lot more money. Next question is from Ann Layton. With the ever-changing commodities in a warehouse, how can a terminal accurately create a system as their storage configurations change? Good question. So the way we do that is we don't put our intrusion detection devices on a wall. We don't put them on something that could be blocked and manipulated. We usually go overhead. That's the way we do it. Let's say, for example, it's a 20-foot high ceiling. We can come down with a piece of conduit, for example, and put a 360-degree dual technology motion detector. I mean, it's not going to be 100%, but I think that the inspection of the system is part of it. With ever-changing movement, you're right. You could have them block four motions inadvertently. So I think if you keep them off the walls, if you keep them off the actual structures that materials are on, you look overhead, and you make sure you cover the main walkway areas, that's a start. But you're right. Changes occur, and you could have a whole area blocked off. They could just clean up the area and never come into the area where you've got detection. It's a systemic problem. So the more expensive motions generally are ceiling-mounted motions. You can do certain things, have activity detection, whereby if the motion doesn't detect someone walking through its field of view every three days or every four days, it becomes a trouble. So we know if someone's not walking through it, and they're expected, and the warehouse is open every day, it could be blocked. That's a way. Or have anti-mass technology or anti-block technology, where if it does get blocked accidentally, you see it on the keypad. That would be the way to address it. Ceiling-mounted or motion detector, indoor motion detectors, that detect when they're blocked either accidentally or intentionally with tape or a box or something to that nature. Okay, and we have, this is our last question, Gina. If the UL certificate indicates supervision and monitoring of openings and closings not required or audited by UL, what other control does UL provide after the closing or opening? Yeah, not a good answer. None. So the way we address that, and you make, you obviously have knowledge on the UL certificate by saying not audited, but I will say this to you. The way we address that is we require opening and closing. There's a record of that opening and closing. It resides in the Central Station software, the 1981 automation system, and that record's maintained. So to the extent they don't arm the system, we have a record that we can test it. To the extent UL, you know, UL, remember UL comes once a year and only tests a representative sampling of accounts. They don't check, if a guy had a hundred accounts, they don't check them all. They may never get to those accounts for years because they only do a representative sampling. So the misnomer that they're coming to inspect, they may not get there for years. So I think the way we cross-check that and verify it is we create requirements that create a report that we can harvest to the extent there's a loss, determine if the system was on, bypassed, you know, that will help us make a determination on a claim or for any other reason. Well, thank you so much, Jeffrey, for this enlightening presentation. Lots of information here, lots of food for thought. Thank you. Now, are you ready to hear who the most engaged attendee is? Sure. Okay, and since we had a lot of questions, so that's how we were going to select our most engaged. And so I'm just gonna, I wrote down the names of those who asked the question and I'm going to pick from one of those. And it is Greg Slate. So Greg will receive a $25 Amazon gift card. Congratulations, Greg. And thank you to everyone for all of their participation today and the interesting questions. Thanks also to you, Jeffrey. We really appreciate the time that you took to prepare this presentation today and also the offer for the alarm manual. And you said just attendees can email us. If you need more than one for your team, I'm glad to send you, you know, I can send you more than one. And if you want me to personalize them, just give me your name and I'll personalize it. I heard it's worth maybe three cents more, so who knows. Between that and the $25, it could be a huge day. Well, thank you for that. So for our attendees, your feedback is appreciated. We want to know what worked well and what IMUA can offer to improve your experience and to add to your insurance knowledge. So please fill out the survey. We'll send out a link to the survey after the presentation today. This concludes today's webinar. Enjoy the rest of your day. Thank you. Bye.

webinar

Inland Marine Underwriters Association

Jeffrey Zwern

alarm systems

risk control

underwriting perspective

reliable alarm science

national fire protection association standards

central station monitoring

home-based operators