Make sure the user that you have configured in the Lab service add in in the system tray is a Full Local Administrator. Also as per HP make sure the user has the following:
UAC turned off, this means EnableLUA set to 0 in the registry, you must restart before this setting takes affect.
Create global objects.
All COM permissions.
All permissions needed to run tests of the desired type. For example, if you intend to run UFT tests from ALM, the selected user must have all permissions needed to run UFT tests. For more information about the permissions required per testing tool, see the user guide for the appropriate testing tool.
If you do not have these settings un-install lab service and reinstall once the above conditions are met, make sure and leave the permissions set for this user and that group policy does not change them back or the ''check host'' process in ALM will Fail.
Most users find it easiest to create a ''Lab Service user'' for running these tests using lab management/lab service, this way regular users don't have to be given admin access.