All Eyes on Video

May 24, 2011
Know and understand the laws that apply to surveillance

Video is becoming an increasingly important component of the overall security mix. In fact, industry market researchers generally agree that video will continue to grow. Video is appealing and profitable, but it's not risk free. As with all security services, start by addressing potential liability issues by using an effective contract, maintaining adequate insurance-and follow these rules.

Use the right contract to protect your company: An effective contract for video should limit your company's liability in the same manner as intrusion or fire detection. Your existing contract may require modifications to address a number of video-specific issues that are likely to arise. For example, a likely issue is which party (company or subscriber) will be responsible for informing people on a subscriber's premises they are being monitored. Make sure your contract includes, among other things, an enforceable limitation of liability clause that limits your liability for video-related issues; provisions requiring the subscriber to indemnify your company and its employees in the event of a loss (even if your company's negligence caused the loss); and an effective waiver of the rights of the subscriber's insurer to recover losses and other issues.

Follow state and federal wiretap laws: You might be surprised to know that while federal wiretap laws don't apply to video per se they do have an impact on video surveillance. Federal law prohibits devices designed to be "primarily useful for the surreptitious interception of oral communications," so the use of audio eavesdropping devices, alone or with video, may violate the act. Cameras with hidden microphones, for example, would violate federal law. Many states also have wiretap laws. These laws vary-some states permit the interception of oral communications if one party to the communications consents to the interception. Other states require all parties to the communication consent to interception. Violations of these laws, whether state or federal, can carry significant civil and criminal penalties.

Obey state video surveillance laws: Many states also prohibit or regulate video surveillance. Some states require consent from all parties for video recording of confidential communications. Other states prohibit video recording of persons in private places, and what constitutes a "private place" may also vary. Some states also prohibit hidden cameras. While some of these laws were enacted to curb illicit voyeurism, others were enacted for the protection of individual privacy rights.

Abide by state privacy rulings: Every state has common-law rules concerning privacy rights; rules that have been developed and applied by judges in privacy lawsuits. Despite their name, "privacy" rules apply in private places and public ones, too. The test is whether the person being watched or recorded has a reasonable expectation of privacy when subjected to the video surveillance and the answers, according to the courts, may surprise you. Courts have held that plaintiffs have a reasonable expectation of privacy while attending fundraisers or dinner meetings in public places and in the workplace while conducting conversations with another employee in an open place.

Maintain adequate insurance: Ask your insurance professional for the necessary coverages and policy amounts for the video portion of your business. Insurance can be a most effective risk transfer mechanism, but only if it covers the right risks. For example, does your current policy provide coverage for tort claims by others that your company invaded the privacy of another? It may not, especially if the plaintiff's claim is for intentional invasion of privacy.

Video can be profitable-but it does present some risks, so do the work if you can but do it keeping these rules in mind.

Eric Pritchard, SD&I's new legal columnist, is a partner in Kleinbard Bell & Brecker LLP, Philadelphia, a commercial law firm with a national practice in the electronic security and life safety industries.