Common coverage gaps and errors that leave security guard companies exposed to unnecessary financial risk.
Tips & Advice
5 Insurance Mistakes Security Companies Make
Many security companies carry insurance that leaves significant gaps in protection, either because they relied on a generalist agent who does not understand security industry exposures, they prioritized cost over coverage, or they simply did not know what they needed. Here are the five most common insurance mistakes we see in the security industry.
Mistake 1: No Assault and Battery Coverage
The most dangerous gap in most security company insurance programs is the absence of assault and battery coverage. General liability policies exclude intentional acts, which means the most common type of security guard claim, a physical confrontation, falls into a coverage void.
Many security company owners do not realize this exclusion exists until a claim is denied. Adding assault and battery coverage is typically affordable relative to the exposure it eliminates.
Mistake 2: Inadequate Professional Liability
Some security companies carry only general liability, which does not cover negligent security claims. When a client alleges that your guards failed to prevent a crime or did not meet the contractual standard of care, professional liability is the policy that responds.
Negligent security claims are among the most expensive in the industry. Without professional liability, your company absorbs these defense costs and any judgment directly.
Mistake 3: Underinsured Umbrella Limits
Security companies that carry only $1,000,000 in general liability without an umbrella policy are severely underinsured for the claims they face. A single wrongful death or serious injury claim from a negligent security lawsuit can easily exceed primary limits.
Many large contracts require $5,000,000 or $10,000,000 in total limits. Without adequate umbrella coverage, you cannot compete for these contracts and you are exposed to catastrophic loss.
Mistake 4: Misclassified Workers' Compensation
Using incorrect classification codes for workers' compensation can result in audits, back-premium assessments, and coverage disputes. Security guard classification codes carry specific rates, and misclassifying guards under cheaper codes is both fraudulent and dangerous.
If a guard is injured and the workers' comp policy has incorrect classifications, the claim can be disputed, leaving your company directly liable for the employee's medical expenses and lost wages.
Mistake 5: No Hired and Non-Owned Auto
If guards drive personal vehicles for any business purpose, including traveling between client sites, your company is exposed to auto liability. Without hired and non-owned auto coverage, an accident in a guard's personal car while on company business creates uninsured liability for your company.
FAQ
Get Covered
Share a Few Details and Let's Find the Right Coverage
Tell us about your security operation and our specialists will reach out with tailored coverage options. No obligation — just expert guidance from a team that understands the security guard industry.
Ready to Protect Your Security Company?
Our specialists understand security operations inside and out. Get coverage tailored to the way you run.