Security Company Insurance

Security Company Insurance

Security company insurance costs between $3,000 and $150,000 annually depending on your operation size, whether guards are armed, and your claims history. A small unarmed team pays $3,000 to $5,000 for basic guard liability. Armed security insurance runs two to five times higher — a 25-guard operation with seven armed guards pays roughly $143,800 per year across all coverages.

Security business insurance differs from standard commercial coverage in one critical way: the risks that define your work—physical altercations, detaining people, use of force—are exactly what most general policies exclude. A single assault and battery claim can hit $500,000. One firearms incident can mean multi-million dollar lawsuits. Standard business insurance typically excludes both.

Insurance for security companies requires specialized guard liability coverage that includes assault and battery protection, professional liability for service failures, and—for armed operations—dedicated firearm liability with limits high enough to matter.

Here’s what security insurance actually requires: guard liability limits starting at $1 million for small unarmed teams up to $10+ million for government contracts, plus workers’ comp, commercial auto for patrol vehicles, and umbrella coverage to fill gaps when claims exceed primary limits.

Whether you run a two-person team or a 200-guard operation, here’s how to build coverage that fits your business.

Guard Liability Insurance (General Liability for Security Operations)

Guard liability is general liability, but actually built for security work. It fills the gaps that standard policies leave wide open.

What Guard Liability Insurance Covers:

• Third-party bodily injury from security operations
• Property damage caused during patrols or response
• Personal injury claims including false arrest, wrongful detention, and defamation
• Legal defense costs and settlements

Most security companies carry $1 million per claim, $2 million total. Armed jobs or big clients? You’ll need $2 to $4 million per claim. Large contracts, like Fortune 500 or government work, often mean $5 to $10 million. That’s where an umbrella policy comes in.

Premiums? Small, unarmed companies pay $3,000 to $5,000 a year. Mid-size or armed? $8,000 to $15,000. Large, multi-state armed operations start at $50,000. Your price depends on your size, services, claims history, and where you operate.

Assault and Battery Coverage for Security Guards

Assault and battery coverage isn’t optional. Standard liability policies usually exclude it or cap it low—$25,000 to $100,000. One use-of-force claim can easily hit $500,000 or more.

Security-specific policies include robust A&B coverage because physical confrontation is inherent to the work. When evaluating any guard liability policy, verify:

• A&B is included, not excluded
• Limits match your per-occurrence coverage (not sub-limited)
• Coverage applies to reasonable force used within scope of employment
• Both intentional and accidental incidents are addressed

Skip strong assault and battery coverage, and you’re wide open to one of the most common and expensive claims in security.

Armed Guard Insurance Coverage vs. Unarmed Security Operations

Armed or unarmed? That’s what carriers care about most. It drives your pricing and your options.

Unarmed security is lower risk. Claims are usually minor injuries, slip-and-falls, or property damage. Standard markets cover this at competitive rates.

Armed security is a different story. One firearms incident can mean death, permanent injury, and multi-million dollar lawsuits. Many carriers won’t touch it. The ones who do want strict controls:

• Documented firearms training programs with quarterly re-certification
• Written use-of-force policies
• Comprehensive background checks including psychological evaluations
• Minimum experience requirements (often prior law enforcement or military)
• Higher minimum age requirements (typically 25+)

Armed security costs two to five times more than unarmed. Per-guard, expect $1,500 to $3,500 a year, depending on the job and your limits.

Most general liability policies exclude firearms. Even if they don’t, limits are usually too low. Armed security needs its own firearm liability coverage. Always check your coverage and limits before sending out armed guards.

Professional Liability Insurance (Errors & Omissions) for Security Companies

E&O covers you when mistakes cost money, even if no one gets hurt and nothing gets damaged. It picks up where guard liability leaves off.

Common Security Company E&O Claims:

• Failure to prevent theft or loss at protected premises
• Inadequate security staffing recommendations
• Missed patrols or checkpoint failures
• Incomplete background investigations
• Breach of contract for service failures

If a client loses $500,000 and blames your guards for not stopping it, general liability won’t help. No injury or property damage? Only E&O covers you.

E&O is claims-made. Only the coverage you have when the claim is filed matters—not what you had when the incident happened. If your policy lapses, you’re not covered for past work.

Recommended Limits: Small to mid-size companies should carry$1 million per claim. Larger operations and those providing consulting, investigations, or executive protection need $2-5 million.

Typical cost: Smaller companies pay $1,000 to $2,500 per year. Larger or more complex operations can see $5,000 to $12,000.

Workers’ Compensation Insurance for Security Guards

Workers’ comp is required everywhere but Texas as soon as you hire your first employee. Security guards face higher injury risk—fights, slip-and-falls, car accidents, and repetitive stress.

Workers’ Compensation Coverage Includes:

• Medical expenses for work-related injuries
• Wage replacement during recovery (typically two-thirds of average weekly wage)
• Disability benefits for permanent impairment
• Death benefits for surviving dependents
• Exclusive remedy protection shielding you from employee lawsuits

Rates are based on payroll. Unarmed guards: $2.50 to $5 per $100. Armed: $5 to $12. Office staff: $0.50 to $1.50 per $100.

Example: $600,000 payroll for unarmed guards at $4.00, $200,000 for armed at $9.00, $100,000 for office staff at $1.00. Total premium? About $43,000 a year before any experience mod.

Claims history drives your premiums. Keep a clean record for a few years and you’ll see real savings.

Commercial Auto Insurance for Security Patrol Vehicles

Using vehicles for security work? You need commercial auto insurance. Personal auto won’t cover business use.

The alternative—prior acts coverage (“nose coverage”) from a new carrier—can sometimes eliminate the need for tail when switching carriers with continuous coverage history. But for retirement? Tail is essential.

Essential Commercial Auto Components:

• Liability coverage ($1 million recommended, far exceeding state minimums)
• Collision coverage for vehicle damage
• Comprehensive coverage for theft, vandalism, and non-collision losses
• Uninsured/underinsured motorist protection
• Medical payments coverage

Patrol vehicles rack up 30,000 to 50,000 miles a year, mostly at night. They carry special gear that may need extra coverage. Urban routes or high-crime areas mean higher premiums.

Most pay $1,500 to $3,000 per vehicle each year. Armed or urban fleets are at the top end. Three or more vehicles? You might get a fleet discount—10 to 25 percent off.

Hired and non-owned auto covers accidents when employees use their own cars for work. If guards drive between jobs in personal vehicles, you need this. It usually costs $400 to $800 a year.

Commercial Umbrella Insurance for Security Companies

Umbrella insurance adds extra protection on top of your main policies. If a claim goes over your limits, umbrella fills the gap.

Ten or more employees? Start with $5 million in umbrella coverage. Big assets or high-value contracts? Look at $10 million or more.

Umbrella is cost-effective—usually $1,500 to $4,000 a year for $5 million more coverage.

Cyber Liability Insurance for Security Operations

Security companies handle sensitive data—client info, access codes, surveillance footage, employee records. A data breach can mean big trouble.

Coverage includes breach response costs, notification expenses, credit monitoring, legal defense, and regulatory fines. Recommended limits: $1-2 million for most operations, higher for companies managing extensive surveillance systems.

Employment Practices Liability Insurance (EPLI) for Security Companies

EPLI covers claims from employees—discrimination, harassment, wrongful termination, wage issues. High turnover and tough work environments make EPLI even more important for security companies.

Defending an employment claim can cost over $75,000. EPLI keeps those costs from draining your business.

Employee Dishonesty Insurance & Fidelity Bonds for Security Guards

Your guards have access to client property and assets. Employee dishonesty coverage protects both you and your clients if someone steals.

Third-party fidelity coverage protects your clients if an employee steals or commits fraud. It’s key for keeping client trust if something goes wrong.

Security Guard Licensing Requirements by State

Security company licensing is all over the map. If you work in more than one state, you’re dealing with a patchwork of rules.

The Security Guard Regulatory Landscape

Approximately 35 states mandate specific security business licenses through dedicated regulatory agencies. States with comprehensive licensing programs include California, Texas, Florida, New York, and Illinois—these jurisdictions require security-specific permits, maintain specialized enforcement capabilities, and conduct regular compliance audits.

The remaining states either regulate through general business permits, defer to municipal authorities, or impose minimal requirements. States like Idaho, Kentucky, Alabama, Nebraska, and Mississippi don’t require state-level security licensing, though local governments may impose their own requirements. Kansas and Missouri regulate security at the city level rather than state level, meaning guards in Kansas City or St. Louis must comply with municipal licensing even without state mandates.

Among states requiring security company licensing, virtually all mandate proof of insurance before issuing licenses. Requirements vary significantly:

California Security Guard Insurance Requirements

The Bureau of Security and Investigative Services (BSIS) requires Private Patrol Operator (PPO) licensees to maintain $1 million in general liability coverage. Applicants must also demonstrate 4,000 hours of security experience and complete 40 hours of pre-licensing training.

Texas Security Guard Insurance Requirements

The Department of Public Safety’s Private Security Bureau oversees licensing. Class B licenses for security contractors cost $300-$2,000 depending on services offered. The state mandates Level 2 certification for unarmed services and Level 3 for armed personnel, with specific insurance coverage requirements.

Florida Security Guard Insurance Requirements

The Department of Agriculture and Consumer Services (FDACS) issues Class B Security Agency Licenses requiring $25,000 surety bonds plus liability insurance. Armed services require 28 additional hours of firearm training and separate endorsements.

New York Security Guard Insurance Requirements

The Division of Licensing Services imposes a $10,000 mandatory surety bond, with corporate licenses at $500 and individual licenses at $300. All applicants must submit electronic fingerprints and pass competency examinations.

Washington Security Guard Insurance Requirements

Requires a certificate of liability insurance with minimum $25,000 bodily injury coverage and $25,000 property damage coverage—notably lower than most states with comprehensive programs.

Armed Security Guard Licensing: Universal Additional Requirements

Regardless of state, armed security operations face heightened licensing requirements. States universally mandate enhanced permits including specialized firearms training, range qualification, higher insurance minimums, and separate firearm endorsements. Individual armed guards typically require weapon-specific permits meeting state qualification standards.

Consequences of Operating Without Proper Security Licensing

Criminal Penalties: Misdemeanor charges with potential imprisonment in most states. In Florida, unlicensed operation can result in up to one year in jail and $1,000 fines; multiple offenses may be prosecuted as felonies.

Civil Penalties: Fines range from $2,000 per violation in Tennessee to $10,000 in Texas, with daily accumulating fines in states like Louisiana. These penalties typically exceed proper licensing costs by substantial margins.

Contractual Consequences: Courts consistently rule that unlicensed contractors cannot enforce contracts or seek legal remedies for non-payment. Agreements with clients may be voided entirely.

Insurance Implications: Policies typically exclude coverage for unlicensed operations, leaving contractors personally liable for injuries, property damage, and legal defense costs.

Multi-State Security Guard Operations

Security licenses don’t transfer between states. Each state has its own rules, applications, and exams. Some offer limited reciprocity to speed things up, but you still need a license in every state you work.

Cities can add another layer. Denver, for example, requires a local license even if the state doesn’t. If you’re in multiple states, you need a system to track renewals, training, and rule changes everywhere you operate.

Building a Comprehensive Security Guard Insurance Program

Sample Insurance Program: Mid-Size Security Guard Company

Company Profile: 25 guards (18 unarmed, 7 armed) • $2 million annual revenue • $1.2 million annual payroll • 6 patrol vehicles • Operations in 3 states • Corporate security, event security, executive protection

Security Guard Insurance Cost Management Strategies

Solid, documented training shows you run a tight ship. Carriers notice—and reward you with lower premiums and better options.

A clean claims history is your best tool for lower premiums. Proactive safety and strong claims management cut losses and keep costs down.

Tech helps. Dash cams give you proof in disputes. GPS shows patrols got done. Body cameras (where legal) document what really happened. These tools cut down claims and make them easier to defend.

Bundle your coverages with one carrier and you could save 10 to 25 percent.

Raise your deductible from $500 to $2,500 and you might cut premiums by 15 to 20 percent. Just make sure you have the cash to cover bigger out-of-pocket costs.

How to Choose a Security Guard Insurance Broker

Security companies require brokers with specific qualifications:

Work with brokers who know security and place coverage for companies like yours. General brokers usually don’t have the expertise you need.

Offering armed services or planning to? Make sure your broker can access carriers that write armed security. Many can’t.

Multi-state? Your broker needs to be licensed everywhere you operate. That means compliant coverage and fast certificates. Delays can cost you contracts. You want same-day certificates, with rush service when you need it.

Red Flags When Choosing a Security Insurance Broker:

• No experience with security industry clients
• Unable to access armed security markets
• Slow response times during quoting process
• Pricing way below market (usually a sign something important is missing)
• Carriers rated below A- (that’s a red flag for financial stability)

Why Choose Alliance Risk for Security Insurance

Alliance Risk focuses on complex commercial insurance for security companies—nationwide.

Licensed in all 50 states. We cover you wherever you operate, with programs that meet every state’s requirements.

Security is what we do. We’ve placed coverage for all kinds of operations—from growing regional companies to large, multi-state firms with armed guards.

We work with A-rated carriers. Our panel of insurers specialize in security risks—armed security, prior claims, and complex, multi-state operations.

One broker, all your coverages. Guard liability, professional liability, armed guard, workers’ comp, commercial auto, umbrella, cyber, EPLI, and more.

Need a quote? We deliver in hours or by the next business day. Certificates? Standard turnaround is 24 hours, with same-day service if you need it. Support is 24/7.

Get Your Security Guard Insurance Risk Review

Fill out a short application or talk to a security insurance specialist for a comprehensive risk review. We shop your risk across multiple carriers and provide clear comparisons with transparent pricing.

What We Need for Your Security Guard Insurance Quote:

• Company details and ownership structure
• Employee count and payroll by classification (armed/unarmed/admin)
• Services provided and client types served
• Operating states
• Current coverage and limits
• 5-year claims history

Want coverage built for your security company? Let’s talk.f