Loss Prevention

I like the lazy afternoons that I get to go clothes shopping.  Of course, I am constantly thinking about how I can insure something when I see it.  I recently traveled into the local city for some down time and shopping.  The insurable interest that caught my eye – security guards.


Previously I was employed for an MGA that specialized in homeowner’s and condominium association policies.  Basically, the policy is a Business Owners Policy (BOP) with some tweaking.  The problem we would see is these associations hired armed guards to patrol the premises.  As you may already know, BOP’s are not set up to cover that type of exposure.  We were often stuck trying to find other coverage.

Really, who can blame them with the numerous news reports, statistics, and lawsuits involving non-police type armed guards or neighborhood watch groups shooting regular unarmed civilians?  The facts and figures are disturbing at best.  However, armed or not here are some things to look for when writing for security guards:

Armed or not

Most of the larger chain retailers are self-insured; therefore, you will see that if they have in store security they are also unarmed.  At the local mall, those guys are largely unarmed as well.  However, they may be allowed to carry batons, mace, and pepper spray. Guards that do carry firearms have to be licensed and carry police certification. Any program for armed guards has to be designed to minimize the financial exposure due to life-threatening events.

There are carrier’s that do offer for armed security, like armored car service, Executive, and Personal Protection.  They also go hand and hand with bonds like Surety Bonds, Performance Bonds, Court Bonds, Process Server Bonds, and License & Permit Bonds.  As with most bonds, there is collateral involved.

They may also be looking to see if they use highly trained dogs and how many dogs and what kind of dogs they have.

Physical fitness

Yes, they will ask if the employees are able to do the physicality of the job.  The carrier may ask how often physicals are given.  They may even recommend a medical professional they trust to examine the workforce.

In addition to seeing the detailed list of the duties, the insured’s company provides they may inquire if the insured have a light duty to full duty program.  The carrier may want to see the specifics of this before they proceed.

Additionally, they will look at criminal records and insist on drug testing to be completed as a term of employment.

Pay Schedule

You have to ask how they are paid.  Most of these professionals are not payroll. Instead, they are hourly wages or ‘per diem’ (per day).  When someone calls out they may go to the per diem employee to stand in for the day.

Of course the armed professional will most likely be paid more than the unarmed employee.  Therefore, the carrier is going to break it out between armed and unarmed and how much is the payroll.


If the client is involved with anything above, there might be overseas exposure.  Most carriers are continental United States, Canada, and Puerto Rico.  Be sure to identify if the risk is the just US or also overseas.

You might also want to talk deductibles and, as I always push, the umbrella coverage.  The pricing is fair for these types of policies often equivalent to a BOP or basic CGL.  Discuss the exposure with your insured before you fill out the application.

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