Brokers who provide policies for security services businesses need insurance coverage rarely offered by traditional insurers. More than just one type of service, the security services industry insurance encompasses a wide range of coverage requirements from:
- Security guards
- Private investigators
- Alarm installers and monitoring stations
- CCTV installation
- Fire alarm services
Many insureds do not understand what kind of coverage they need or why. This is changing, however. In recent years, regulatory bodies, such as the Bureau de la sécurité privée in Quebec and the regional regulator in Ontario, have made products easier to sell by insisting on $2m liability limits with failure to perform coverage listed as standard. So, while security services is a high-risk sector, any broker can provide their clients with a wide range of coverage options at competitive prices with the right underwriting support.
The Vulnerabilities of Security Services
In this diverse market, many clients are oblivious to the exposures that come with their business. Here are some of the major liabilities, with examples of what could go wrong, across all security services:
- Physical injury
- A guard was hired to monitor premises. The claimant arrived at the premises, demanded entry and became threatening. The guard struck the claimant causing bodily injury.
- Most situations that require a guard to act physically also require a police presence, rather than allowing the guard to physically handle a situation.
- Failure to perform
- A burglar alarm installed by the insured failed, resulting in a third party suffering burglary.
- An alarm installer entering people’s homes could be held responsible for an instance of subsequent burglary or theft in the home if the alarm system fails to perform.
- Professional liability
- Misconduct because of faulty advice given to security staff; staff was negligent in their duties; or, a situation was misinterpreted.
- Security incidents as a result of design flaws in security systems.
Checklist: Submitting a Successful Application
Since the risks are high and client needs are so diverse, it’s important and time-saving to make a thorough submission. Here are some guidelines for submitting security services insurance applications:
- When clients apply for security services cover, the application needs to be answered in full. SWG asks the same questions every year but often things come up that brokers don’t think of as an exposure.
- South Western expects employees to have a minimum of three years-experience and basic training based on provincial regulations, including the use of force training.
- Though it is not required with an application, we suggest that clients provide their brokers with contracts and a paper trail outlining who is responsible for what, as part of their day-to-day business. This helps us understand the scope of the work and capture exposures as they develop.
Key to success in this evolving industry is understanding and staying abreast with the unique and relevant exposures facing the insured’s business. South Western offers brokers more than twenty years of expertise in the security services sector and the specialized underwriting support to help them achieve just that.