Cheezy, this idea is actually just as bad as if the entire audio rig tripped. If you ever switched on CD Players, Mixer etc AFTER the Amplifier, then you would have possibly experienced a loud thud through the speakers.
This is caused by the resulting surge through the mains, and a short, but high powered audio signal being fed from the output of the mixer into the input of the Amplifier. This can be loud enough to do some pretty serious damage to the Speakers, or take out a fuse in the Amp, for example.
The only way of truely defeating the Sound Limiter, is to do just that! - Defeat or Bypass it

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With regard to the other question, there are no hard and fast rules for installation and setting up of a Sound Limiter. In fact the average D.I.Y'er could fit one. The local council dictate that the venue should have one, and in most cases it is fitted by a local electrician. As i've said before, the average Electrician has little knowledge of limiters, all he has to do is to fit it!.
Usually, the limiter is set to it's factory default (lowest) setting, and that is why you can usually trigger it, just by the conversation level of 150+ people

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There are currently no laws, to audio test the installation, or calibrate it on a yearly basis, in fact the unit may sit there for 15 years without ever being adjusted from its default setting. The only time it may get reviewed, is if the complaints start rolling in from local residents, which indicate that the entertainers may be bypassing the limiter!.
As a D.J, you can be fined under the noise abatement laws, if you are caught bypassing the system, and the owner / manager of the venue could lose his licence.
There are currently more laws being written (Thanks to our crappy Euro rulers) which if passed will require every venue to have a quiet area set aside for visiting punters!. This Law currently applies only to clubs ("Chill out rooms") but should the Euro clowns get their way, then every village hall, Pub etc will have to comply, in fact anywhere which is licensed for music".