In the high-stakes world of security services, finding good security guard business insurance can be a daunting task. These businesses operate in risky environments, face unique liabilities, and require specialized coverage. Not only do security guard companies struggle to find quality coverage themselves, but brokers also face significant challenges in securing appropriate policies for these high-risk businesses.
Let’s delve into the real challenges brokers encounter when trying to find insurance for security guard businesses, and then we’ll discuss ways that brokers can overcome them to serve this large and underserved niche.
Unique Risk Exposures in the Security Guard Business
Every day presents unique challenges for security businesses. Below are some of the most common risk exposures for this industry.
High Risk of Claims
Incidents involving assaults, thefts, property damage, and use of force are common, leading to significant financial liabilities. For instance, a security guard preventing a robbery could unintentionally cause property damage or personal injury, resulting in costly claims.
Diverse Risk Environments
Security guards operate in varied environments such as residential areas, corporate offices, retail stores, and event venues. Each environment comes with its own set of risks, complicating the risk assessment and underwriting process.
Regulatory Compliance
Security guard businesses must adhere to a myriad of local, state, and federal regulations. Non-compliance can result in penalties and increased insurance risks. Brokers must address the challenge of ensuring that a security business meets all licensing and training requirements when seeking coverage.
Employee Risks
The security industry experiences high employee turnover, leading to inconsistencies in training and experience levels among guards. Additionally, the actions of security personnel can expose businesses to significant liabilities, including claims of excessive force, negligence, and false arrest.
Liability Issues
Security guard businesses face multiple liability risks, including professional liability, public liability, and assault and battery claims. Securing coverage for these liabilities is essential but can be challenging due to the potential for severe financial repercussions.
A Tough-to-Insure Industry That Is Poised for Growth
These inherent risks make it difficult for this sector to find coverage at all, let alone quality, tailored coverage with expert advisors. For insurance brokers, this is a niche waiting to be served. Not only is the current niche in need of solutions, but the industry is also on a growth streak.
There are currently between 10,000 and 14,000 individual contract security companies operating in the United States, with about 6,000 of these employing more than 100 people. This fragmented market offers significant room for growth, particularly for small security guard businesses that can effectively capitalize on the increasing demand for professional security services.
Setting Yourself Apart: Crafting Effective Insurance Programs for Security Guard Businesses
As a broker, specializing in hard-to-place risks sets you apart from your competitors. The ability to serve security guard businesses hinges on crafting effective insurance programs specifically tailored for the niche.
Evaluating and Selecting Appropriate Insurance Coverages
Brokers must thoroughly assess the specific risks associated with each security guard business. This assessment involves understanding the environments in which they operate, the nature of their duties, and their claims history. Key coverages to consider include:
- General liability
- Professional liability
- Workers’ compensation
- Commercial auto insurance (for mobile patrols)
- Property insurance
- Assault and battery coverage
- Cyber liability (for remote video monitoring)
Tailoring Insurance Programs to Meet Unique Needs
Each security guard business has unique risks and requirements. Tailoring insurance programs to meet these might involve customizing policies to include specific endorsements or exclusions based on the client’s operations.
For example, for a security company specializing in event security, including coverage for crowd control incidents and emergency response can ensure comprehensive protection. Each niche within the security guard industry will have its own unique needs that need to be addressed with specific endorsements and options.
Tips for Assessing Specific Needs
- Conduct a detailed risk assessment: Evaluate the client’s operations, including the types of sites they protect, the frequency and severity of past incidents, and the qualifications and training of their personnel.
- Understand regulatory requirements: Ensure the business complies with all relevant regulations and licensing requirements to avoid potential coverage issues.
- Review contracts with clients: Analyze any contracts the security business has with its clients to identify any specific insurance requirements or indemnity clauses that need to be addressed in the policy.
- Focus on specific endorsements: Tailor endorsements to the unique operations of the security business to provide comprehensive protection.
Solutions That Protect Our Protectors
Security guard companies are protecting us, but who’s protecting them? Some of the most challenging niches to insure are those we rely on most in our communities. Many brokers shy away from these cases due to the time and effort required. This hesitation is understandable — working with niche and specialty carriers often involves inherent difficulties such as confusing forms, stringent compliance regulations, technology challenges associated with new systems, and complicated payment terms.
At Cochrane & Co., our primary goal is to bridge the gap between complex E&S carriers and brokers, eliminating these barriers and providing seamless access to specialty excess and surplus carriers. By simplifying the process, we empower brokers to confidently and efficiently serve high-risk businesses that take on substantial risk to support our communities. For brokers, this is a prime opportunity to differentiate themselves by offering tailored solutions in a high-demand market. By partnering with Cochrane & Co., brokers can navigate the complexities of E&S carriers, confidently serve high-risk clients, and significantly grow their business.
Ready to learn more about how you can provide top-tier solutions for this important, underserved, and growing market? Call Cochrane & Co. at (855) 967-006 today and start building your book of business while protecting those who protect the community.
About Cochrane & Company
For more than six decades, Cochrane & Company has been proudly at the forefront of the insurance industry. Our experience has enabled us to innovate in powerful ways, reimagining the E&S market, and providing technology solutions that make it easy to do business with us. Licensed in all 50 states, we proudly serve clients across the nation, providing personalized and powerful solutions to help you become an even better partner for your clients. Speak to one of our experienced professionals today by calling (855) 967-0069.
