Legal Watch: Avoid Video Surveillance Liability

Jan. 15, 2015
Five legal issues to bear in mind for video surveillance deployments

An increasingly important component in the overall security mix, video can be profitable but poses a number of liability-related issues. Most of them can be dealt with in an effective, enforceable contract and understanding and abiding by some key rules respecting potential sources of liability (make sure your insurance applies to video risks, too.)

Here are five keys to limiting your liability when using and deploying video:

1. Understand and obey wiretap laws. Federal wiretap laws prohibit the interception of oral communications with limited exceptions. The use of audio eavesdropping devices, alone or with video, may violate the federal wiretap act absent an exception to the statute. The act is complex and the exceptions are fact-sensitive, so consult counsel for guidance. There are significant civil and criminal penalties for violating the act.

Federal law also prohibits devices designed to be “primarily useful for the surreptitious interception of oral communications.” Cameras with hidden microphones, therefore, are illegal. State wiretap laws vary. A majority of states permit the interception of oral communications if one party to the communications consents to the interception (please see the chart on page xx of this issue). Bottom line: various rules may apply and you must analyze each to determine how to proceed.

2. Obey state laws prohibiting video cameras. Several states prohibit or regulate video surveillance. For example, some states, such as California, require consent from all parties to the video recording of confidential communications. Other states, such as Alabama and Georgia, prohibit the video recording of persons in private places. What constitutes a “private place” varies from state to state. Still other states, such as Delaware and Georgia, prohibit the installation of hidden video cameras. Some laws were enacted to curb illicit voyeurism, while others appear to be premised more on the individual’s privacy rights. Federal law prohibits covert video surveillance on federal property. Obey the rules in each state and federal law if applicable.

3. Obey state laws respecting privacy rights. Americans love their privacy. Every state has law concerning an individual’s privacy rights. The rules developed in these cases not only apply in private places but in public as well. The key issue in cases concerns whether or not the plaintiff had a reasonable expectation of privacy when subjected to video surveillance. The results may surprise you. Courts have found a reasonable expectation of privacy at fundraisers or dinner meetings in public places and in the workplace in an open place. Consult counsel and determine if you may have some liability under applicable state privacy laws.

4. Use an effective, enforceable contract to allocate the risk of loss. An effective contract for the provision of video-related services and equipment should limit your company’s liability just like it does for other services. Your existing contract may require modifications — for example, why are you providing video? If it is for alarm verification, make that clear in the contract and spell out exactly what your obligation is once a central station receives video from the premises. Make sure your contract includes an enforceable limitation of liability clause; 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 paid to the subscriber, among others.

5. Installing video without a recurring contract is a missed opportunity. Develop a policy of not selling or installing video cameras without a contract for some form of recurring revenue. It could be a service contract, lease of the video equipment, video alarm verification or some other form video monitoring. If you don’t get a recurring revenue contract, you are limiting the value of your company on exit.

Eric Pritchard is a Philadelphia Lawyer who spends his workday making the world safe for electronic security providers. He can be reached at [email protected]. This column does not constitute legal advice; please contact an attorney with questions. 

About the Author

Eric Pritchard | Eric Pritchard

Eric Pritchard is a partner in FisherBroyles, a law firm with office throughout the United States and in London. He spends his days trying to make the world safer for the security industry. You can reach Eric at [email protected].