You built your security company from the ground up. You put in the sweat, the hustle, the sleepless nights crafting the perfect system to keep your clients safe.

Now, imagine a knock on the door. Not a client needing help, but a lawsuit threatening to take it all away.

Suddenly, that insurance policy that you’ve got in place (and pay hefty premiums for!) feels a whole lot more useful. But with so many options, where do you even begin?

If you’re wondering: What insurance does a security company need? We've got you covered — this guide will break down the essential insurance your company needs, from General Liability to keeping your fleet protected.

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Here are six security insurance options for you to explore:

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1. General liability insurance

Running a security company comes with inherent risks — whether it's a guard accidentally causing property damage during a patrol or a client alleging a security lapse that leads to a break-in, lawsuits can be a real threat.

That's where general liability (GL) insurance steps in. It's your first line of defense against these unexpected financial blows.

GL insurance is also the most affordable type of business insurance, making it a cost-effective way to safeguard your security company's financial well-being. 

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Here's a breakdown of what GL insurance typically covers:

• Bodily injury: If a client, visitor, or even a trespasser gets injured on a property your security team is guarding, and it's deemed your fault (or your guard's fault), GL insurance kicks in. This covers medical expenses, lost wages, and even pain and suffering claims.

• Property damage: Let's say a guard accidentally damages some expensive equipment while helping load it into a truck. GL insurance can help cover the cost of repairs or replacements for damaged property belonging to your clients or even a third party.

• Legal defense costs: Even if you believe a lawsuit against your company is frivolous, defending yourself in court can be expensive. GL insurance covers legal fees, court costs, and settlements (up to your policy limit) so you can focus on running your business.

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2. Workers’ compensation insurance

In the security industry, your employees are the frontline. They face potential risks every day, from physical altercations during interventions to slip-and-fall accidents while on patrol.

Workers' compensation (WC) insurance is mandatory in most states — it's a crucial investment in protecting your greatest asset, your workforce.

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Here's how WC provides security guard insurance:

• Medical expenses: If a guard gets injured while on the job, regardless of fault, WC insurance covers their medical bills, including doctor visits, hospital stays, surgery, medication, and physical therapy.

• Lost wages: An injury can sideline your employees for a while. WC insurance provides them with a portion of their regular wages while they recover, ensuring financial stability during a difficult time.

• Disability benefits: In the unfortunate event that an employee suffers a permanent disability due to a work-related injury, WC insurance can provide ongoing financial support. This helps them maintain a sense of security even when they can't return to full duty.

While WC insurance protects your employees, it also benefits your company — WC insurance handles employee injury claims, minimizing the risk of costly lawsuits.

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3. Commercial automobile insurance

Some security companies may need to rely heavily on vehicles for patrolling, mobile response, and transporting equipment. But with great power (and mileage) comes great responsibility.

An accident involving a company vehicle can be a major financial setback. That's where commercial auto insurance comes in.

It shields these types of security companies from the costs associated with accidents, breakdowns, and even theft of your fleet.

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Here's a breakdown of what commercial auto insurance typically covers:

• Liability: If one of your security vehicles is involved in an accident, and it's deemed your driver's fault, commercial auto insurance kicks in. This covers medical expenses, property damage, and lost wages for the other party. It also protects you from lawsuits arising from the accident.

• Collision: In case of an accident, collision coverage helps pay for repairs to your own vehicle, regardless of who's at fault.

• Comprehensive: This coverage goes beyond collisions. If your patrol car gets stolen, vandalized by a disgruntled client (hopefully unlikely!), or suffers damage from a natural disaster, comprehensive insurance can help get you back on the road.

Remember: You can tailor your commercial auto insurance policy to your specific needs.

Consider factors like the number of vehicles, their types (cars, vans, motorcycles), and your typical usage patterns. Don't be afraid to shop around and compare quotes from different insurers to find the best coverage at a competitive price.

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4. Professional liability insurance

Running a security company requires expertise and a commitment to delivering top-notch service.

But even the most experienced security professionals can face situations where an error in judgment or a perceived oversight leads to a client lawsuit.

This is where professional liability insurance, also known as errors & omissions (E&O) insurance, steps up as your shield.

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Here's how E&O insurance protects your security company:

• Negligence claims: Imagine a situation where a client says that your security guard failed to properly secure a building, leading to a break-in and theft.
  
  E&O insurance can cover legal defense costs and potential settlements associated with such negligence claims.

• Errors in service: Let's say your security team accidentally installs the wrong security system at a client's location, causing a delay in proper protection. E&O insurance can help cover the costs of rectifying the error and any damages incurred due to the mistake.

• Breach of contract: Even unintentional breaches of contract with a client can lead to legal trouble. E&O insurance can provide coverage for legal expenses if a client sues you for failing to fulfill the terms of your security service agreement.

A lawsuit, even a frivolous one, can damage your company's reputation. E&O insurance ensures you have the resources to fight back and protect your good standing in the security industry.

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5. Commercial umbrella insurance

We've discussed several essential insurance types for your security company, each acting as a safety net for specific situations.

But what happens if a lawsuit arises with damages exceeding the limits of your primary policies? That's where commercial umbrella insurance is helpful.

It acts as an extra layer of protection, providing additional coverage beyond the limits of your underlying insurance policies, like general liability or commercial auto.

Here's the key difference: While your standard policies have set limits for payouts, an umbrella policy kicks in when those limits are exhausted due to a large claim. 

Let’s say there’s a lawsuit against your company for a significant sum due to an alleged security breach. Your general liability insurance might have a limit of $1 million, but the lawsuit demands $2 million. 

This is where the umbrella policy safeguards you by covering the remaining $1 million and shielding your company's assets from financial ruin.

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Here's a breakdown of what commercial umbrella Insurance typically covers:

• Excess liability: This is the core function of umbrella insurance. It provides additional coverage for claims exceeding the limits of your underlying policies like general liability, commercial auto, or even E&O insurance.

• Broader coverage: While some umbrella policies offer a wider range of coverage, they typically extend to similar situations covered by your primary policies, just with significantly higher limits.

Remember: Umbrella insurance typically has higher deductibles than your primary policies. However, the additional coverage it provides for potentially devastating claims makes it a valuable investment for many security companies.

Check with your insurance agent to determine the right umbrella policy limits for your specific needs and risk profile.

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6. Property insurance

Your security company relies on a variety of physical assets to function effectively. From patrol vehicles and security systems to office equipment and uniforms, these assets are essential for your day-to-day operations.

Property insurance safeguards these investments from damage or loss, ensuring you can continue providing top-notch security services without a financial setback.

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Here's a breakdown of what property insurance typically covers:

• Building and contents: This coverage protects your company's physical location, whether you own or lease an office space. It also covers the contents within, including furniture, computers, security equipment, and uniforms.
  
  In case of damage due to fire, theft, vandalism, or even weather events covered by the policy, property insurance can help get your business back up and running.

• Business interruption: Even if your physical assets are insured, a major incident can disrupt your operations.
  
  Business interruption coverage can help offset lost income during a period when your company must remain closed due to property damage. This helps ensure your company's financial stability while you rebuild or relocate.

Disruptions caused by property damage can be costly. Property insurance, including business interruption coverage, helps you recover quickly and get back to serving your clients with minimal downtime.

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Risk management strategies to reduce insurance costs

Insurance is essential, but wouldn't you rather pay less for it?

By implementing a strong risk management strategy, you can show insurers you're a responsible operator, potentially leading to significant savings on your premiums. 

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Here's how to be proactive and put more money back in your pocket:

• Training: Invest in comprehensive training for your security guards. This includes everything from proper equipment use and de-escalation techniques to emergency response protocols. 
  
  Well-trained guards are less likely to be involved in accidents or situations that could lead to lawsuits.

• Safety first, always: Develop clear safety protocols for everything your security company does. Vehicle maintenance schedules, safe patrol procedures, and handling dangerous situations all fall under this umbrella. Regular reviews ensure these protocols stay effective.

• Prevention is key: Stop losses before they happen. Install security systems in your office, conduct equipment checks, and promote safe driving habits among your guards. A few proactive steps can save you a lot of money down the road.

• Learn from every mistake: Create a system for reporting and analyzing incidents, including close calls. These insights help you identify areas for improvement and prevent similar situations from happening again.

• Communication: Keep the lines of communication open with your employees. Encourage them to report safety concerns or potential hazards. This proactive approach can prevent accidents and identify areas where you can reduce the risk of any accidents.

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Next steps — Manage your security firm with Belfry

Belfry can be a valuable tool for security companies looking to proactively manage risk and potentially lower their insurance premiums.

We built an all-in-one platform specifically designed for security companies to help them handle everything from automated scheduling and payroll, to real-time officer tracking and compliance.

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Here's how Belfry helps unlock exponential growth:

• Boost efficiency by 90%: Features like smart scheduling and automatic approvals free up your back office to focus on what matters most – growing your business.

• Maximize profitability by 60%: Effortless billing and labor cost forecasting help you identify areas for improvement and optimize operations for maximum profit.

• Real-time transparency: Keep your clients informed 24/7 with real-time incident notifications and live reports accessible through a user-friendly dashboard. Use it to track officer activity and report trends over time.

• Enhanced communication and incident reporting: Foster a culture of safety by encouraging guards to report incidents and near misses through our mobile app. Take preventative measures and reduce the likelihood of future claims, positively impacting your insurance profile.

• Ensure compliance: Stay on top of regulations with auto-verified licenses, automated reports, and easy export for filings.

• Empower officers: Increase productivity with a mobile app for timesheets, reports, and more.

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Schedule a Free Demo Today.