Celebrating Rick Gombar, a Security Industry Insurance Innovator
Gombar’s four decades of dedication and efforts have led to today’s more stabilized insurance market for the security industry.
When I first entered the electronic security industry and joined then simply Security Sales in 1998 as a senior editor it was to my good fortune that the magazine had as cadre of outstanding columnists.
Not only were they well recognized leaders in their areas of specialty from whom I could gain deep insights, but they were also exceptionally gracious and willing to address whatever questions I threw their way. Among them was Rick Gombar, whose recent retirement caps 40 years as a maverick to security companies where it comes to insurance.
Entering the industry in 1981, Gombar was one of three founders of the Los Angeles County Burglar & Fire Alarm Association (LBFAA; now Greater Los Angeles Security & Alarm Association, or GLASSA) where served on the executive board of directors as the first secretary and treasurer.
He also chaired the insurance and membership committees. As insurance committee chairman, Gombar sought to create a new general liability and E&O insurance program exclusively for LBFAA membership.
Prior, insurance companies had a reputation of entering the security marketplace only to abruptly pull out after suffering a large loss. The carriers that did offer coverage required a $5,000 minimum annual premium, unaffordable for many small alarm dealers.
Gombar studied this and discovered that many of the losses paid by insurance companies could have easily been eliminated had there been a proper subscriber contract in place. Then, he reasoned, the insurance company could have cited the protective clauses in that contract. Any suit, if ever filed, would be dismissed in summary judgment.
Realizing this, he found a new carrier willing to work together to develop underwriting guidelines that would, among other things, require all alarm dealers and central station operators to use approved subscriber contracts that specifically detailed why security firms are not including insurance coverage in the price of their alarm systems.
Once the contract verbiage was approved and the underwriting guidelines were in place, the carrier was now comfortable knowing the protective clauses would significantly reduce lawsuits. This enabled Gombar to renegotiate substantial, previously unimaginable enhancements.
The result was a $5M aggregate on all $1M policies, a zero deductible on any and all claims, legal fees and investigative expenses outside policy limits, and unlimited additional insured certificates at no cost. Best of all, he negotiated an annual minimum premium of only $1,200.
Once LABFAA’s board approved the program, Gombar provided an announcement to the association’s publication, The Ringer. The broad insurance coverage and low minimum premium were well received by existing and prospective members alike.
Within a few months, LABFAA grew to more than 200 member companies, making it California’s largest alarm association. Word spread quickly to the state’s other seven local associations and soon all were using his program as a membership recruitment tool.
After three years of great success, the carrier granted Gombar the exclusive right to market the program nationwide, available to applicants that used approved subscriber contracts and were members in good standing of a professional alarm association. He then reached out to the National Burglar & Fire Alarm Association (NBFAA, ESA today) to become the group’s insurance broker of record.
Using the same marketing concept of leveraging the insurance as a member benefit, with the help of NBFAA staff Gombar grew the program to include all 50 states. The extensive client list included a who’s who of the security alarm industry.
He became nationally recognized for his risk management seminars and trade publication articles, providing insights on insurance matters and legal cases that impressed the importance upon alarm professionals to use subscriber contracts.
Yet perhaps his top career accomplishment was a claims deflection service in which he dissuaded insurance companies and law practitioners from filing suits against his clients. According to Gombar, he handled 500 attempted demands totaling in excess of $80M, being successful in all but two cases (both dismissed in summary judgment).
Those four decades of dedication and efforts have led to today’s more stabilized insurance market for the security industry. With Gombar’s impactful legacy secured, clients will remember and miss his professionalism and dedication.
As we salute his contributions, be sure to review your company’s subscriber contracts to make sure they are current with today’s technologies (e.g. cybersecurity coverage), changes in law and conform by jurisdiction.
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