Even the best physical security companies can’t prevent every risk. Bad things happen outside of our control every day. That’s why it’s important to train your security officers, test them, and train again. However, training is only one part of the equation. You need security company insurance as well.
Why do security companies need insurance?
It’s simple. Having the right security insurance coverage for your security operation ensures that, when security incidents do occur, they don’t harm your business. Certain types of security insurance coverage are an absolute necessity for your operation.
What insurance does a security company need? What types of insurance can security companies get? And what does security coverage include? In this article, we’ll tackle all of these questions and point you to security business insurance resources for additional information.
Let’s start with the basics about security business insurance. Consider these five types of insurance for security companies:
Note: Thinkcurity is not a private security insurance expert. But we do have a wealth of information related to maximizing and managing your security company insurance policy in our on-demand webinar with HUB International.
1. General Liability Insurance
General liability insurance, also known as business liability insurance, is one of the most general insurance policies a security company can hold. Regardless of industry, most businesses will need this policy for protection. For example, do you know that many slip-and-fall cases settle for between $10,000 and $50,000? It’s an unanticipated expense that most businesses simply can’t afford.
General liability insurance not only covers medical expenses if someone gets injured at your company. It also covers:
- Costs for property damage claims against your business
- Administrative costs to handle covered claims
- Court costs, judgments, and settlements for covered claims
If you haven’t yet gotten a Private Patrol Operator’s license, you will need a general liability insurance policy first. The policy must cover a minimum of $1,000,000 for a single loss.
However, before looking up ‘general liability insurance for security guard company’ or ‘liability insurance for security company’ and choosing the first regular or armed security guard insurance option that pops up, it’s important to perform your due diligence in selecting a company insurance policy.
In the physical security industry, it’s important to make sure that general liability insurance also covers these three areas:
Professional Liability Insurance/Errors & Omissions
Professional liability insurance (often called errors & omissions insurance) protects companies against claims due to negligence or inadequate work. For example, a patrol officer forgot to lock a door during a guard tour, resulting in the theft of a laptop. Or a patrol officer failed to report to duty, resulting in a security breach. Professional liability insurance protects your business in these and many other scenarios.
Note that some insurance companies provide professional liability insurance as a part of a general liability policy. This can help simplify your policies and it might even make your security company insurance premiums cheaper.
Assault and Battery Insurance
Assault and battery insurance is a specific type of a liability insurance that covers physical or emotional harm done by a security officer. Even when an officer follows best practices for handling a physical altercation (e.g., they recognize escalation warning signs, practice active listening, and collaborate with the aggressive or threatening person), your company may not be immune to a lawsuit.
Bars and nightclubs frequently carry this insurance because the likelihood of physical altercations is high. However, it’s become increasingly common for retail store owners and other business owners to carry it as well. Why? Because it protects security officers who may encounter shoplifting and other volatile scenarios.
As a security company owner, a stolen or misplaced firearm is truly a worst-case scenario. The good news is that if this occurs, firearm insurance can protect you. Specifically, it reimburses you for some or all the costs of replacing or recovering the firearm.
As you consider various firearm insurance policies, be sure to identify whether they cover liability. For example, if a firearm’s stolen and then used for a crime, there’s a chance your company could be sued for negligence. Armed security insurance — specifically firearm insurance — can help limit your liability and/or help you deal with the costs of the lawsuit.
2. Workers’ Compensation
The physical security industry can be very risky, especially for security officers in the field. Taking care of your employees on the job should be a top priority.
Workers’ compensation is a standard insurance policy for most businesses, and the physical security industry is no exception. The only difference is when and how those injuries typically occur.
For example, did you know that on average, security officers suffer injuries at more than twice the rate of the average worker? Time of day also matters: Between the hours of 10 a.m. and 4 p.m. on Mondays, Tuesdays, and Fridays, loss prevention, school security officers, and security officers assigned to business complexes, offices, and manufacturing and distribution facilities reported being assaulted or injured 41% more often than during other times or days.
As with any insurance policy, the more you tap into your Workers’ Compensation coverage, the more it costs in the long term. Enforcing safety standards helps keep workplace injuries to a minimum. Having the right insurance for security guards is equally as important.
3. Property Insurance
If a security officer is unable to secure a property or can’t prevent damage from a bad actor, property insurance provides protection. General liability insurance typically includes coverage for property damage; however, property insurance provides additional coverage.
Property insurance is great for security companies because it typically helps when more costly items or locations are damaged. Property insurance covers the damage of:
- A security firm’s offices
- Patrol vehicles
- Protective gear
- Communications devices
- Emergency radios
- Security cameras
4. Auto Insurance
Auto insurance in the physical security industry is straightforward and it’s also one of the most important types of security guard insurance coverage because patrol officers are frequently ‘on the go.’ Insure all patrol vehicles as you would with a personal vehicle.
5. Crime Coverage
Crime coverage can help protect your company in two ways. The first is by protecting against theft and damage to company property. For example, crime coverage protects your physical office as well as security officer personal property if they’re robbed on duty.
Second, commercial crime insurance protects your business from a security officer committing unlawful acts in the field (e.g., if a security officer steals money while patrolling a bank). Having only trustworthy officers in the field is a good way to ensure this doesn’t happen regularly. However, crime coverage protects you if these events do occur.
Physical Security Needs the Right Insurance Coverage
When it comes to security company insurance coverage, there are many options, and the best practice is to ensure comprehensive coverage that protects you from all angles in the event a physical security incident occurs.
To learn more about maximizing and managing your security company insurance policy, view our on-demand webinar with HUB International.