Insurers could refuse to pay-out on thefts from thousands of Midlands companies because the West Midlands Police Force will, from June 1, refuse to attend burglary alarms between 6am and 7pm from Monday to Saturday.
West Midland Police Force said they would only attend an alarm if it is activated from a personal attack or a confirmed call.
The move effectively allows insurers to reject thousands of burglary claims, although is more likely to lead to a review of policy wordings and higher premiums.
"Most insurance cover specifies a police response guaranteed," said British Security Industry Association spokesperson Kay Burgess.
"If the police did not attend the break-in, the terms of the insurance policy would be broken and companies may be left short during the no-response period."
CGU warned that policy alarm conditions require the policy holder to tell the insurance company of any changes in regard to actions taken by the police in the event of an alarm going off.
Communications director, Ian Frater said in the short-term they would still pay-out on bona-fide claims even if the police did not attend, but warned in the longer term policies may have to change.
He said: "CGU in the future may look towards establishing a confirmed alarms policy system where the alarm system would be linked to CCTV.
"If the alarm was activated, the security company would be able to see if it was a false alarm or an intruder and the police would be able to respond appropriately."
CGU expects the refusal to have a great impact on the leisure and entertainment business, as these companies are not occupied during the day. But BSIA chief executive, David Fletcher said it was unrealistic to expect companies to install this technology before the West Midlands Police start a three-month trial of the new procedure next month.
The BSIA and the Association of British Insurers have been in discussion with the West Midland Police Force regarding the move, which the police force said was necessary because of staff shortages and a high incidence of false alarms.
BSIA argues the move by the force contradicts the agreement between the Association of Chief Police Officers (ACPO) and the security industry that attending alarm activations did reduce false calls. It is now likely that commercial premiums will rise if there is a corresponding increase in claims.
Birmingham Chamber of Commerce policy director Louise Beard warns the move by West Midland Police penalises all businesses.
"If claims rise we will have to consider increasing their premiums," said Roy Watkinson head of commercial underwriting for Axa Insurance. "We will need to see how it shapes up before we change our policy."
ABI spokesperson, Vic Rance said: "Establishing a confirmed alarm is one way of approaching the problem."
West Midlands Police Force said: "West Midland Police recently reviewed its policy on attending alarm calls at business premises between certain hours & figures showed that 99% of such calls were false alarms. We are still responding to personal attack alarms."
