When you’re running a security company, you need to protect clients — and your business. General liability insurance for a security guard company covers common risks like third-party injuries, property damage, and legal claims. Without it, one lawsuit could put your entire business at risk.

In this article, we’ll cover: 

• What general liability insurance is, and how it’s different from other types of insurance
• Why it’s important
• Key components
• How to choose
• Best practices

Let’s start by defining what general liability insurance is in a security context.

‍

What is general liability insurance for security guard company owners?

For security guard companies, general liability insurance isn’t just a safety net, it’s a necessity. Since security guards work in high-risk situations, there’s always a chance something could go wrong. Even a small incident, like one of your guards accidentally damaging a client’s property, could lead to a lawsuit. 

General liability insurance covers the costs if someone files a claim against you for things like property damage or injuries. Without the right coverage, legal fees and settlements can add up fast.

How is general liability different from other types of insurance for security companies?

General liability insurance covers third-party claims. It’s different from workers’ comp, which covers your employees if they get injured on the job, or professional liability insurance, which helps if a client accuses you of negligence. If you want full protection, you may need other types of insurance alongside general liability. 

‍

Why general liability insurance is important for security companies

Lawsuits are stressful and expensive. Between legal fees, medical bills, and possible settlements, a single claim can cost thousands of dollars (and sometimes even more). Without general liability insurance, your business has to cover those costs out of pocket.

There are many reasons why businesses should carry this insurance, such as:

• Injuries on the job: If a guard’s actions (or just their presence) lead to someone getting hurt, your company could be on the hook. This could be anything from a person tripping over a security barricade to an injury during an altercation.
  ‍
• Property damage: If a guard accidentally breaks something, like a client’s equipment, a vehicle, or even a storefront window, general liability insurance helps cover the repair costs.
  ‍
• Lawsuits: Even baseless lawsuits are expensive to fight.

In many states, security companies are required to have liability insurance. And even when it’s not the law, most clients won’t hire a firm without it. Property managers, event organizers, and corporate clients often want to know they won’t be stuck handling a legal claim if something goes wrong. 

‍

Key components and coverage

General liability insurance covers the most common risks security companies face, helping protect against costly claims. These include:

• Third-party injuries: General liability covers medical costs if someone (not an employee) gets hurt due to a guard’s actions, like a customer tripping over a security barrier and suing for medical expenses.
  ‍
• Property damage: It pays for repairs or replacements if company operations accidentally damage someone’s property, such as a guard knocking over expensive equipment at a client’s site.
  ‍
• Legal defense costs: This covers lawyer fees, court costs, and settlements if your company faces a lawsuit.

Exclusions and limitations

While general liability insurance covers many risks, it doesn’t cover everything. Here’s what you need extra insurance for:

• Employee injuries: These fall under workers' compensation, not general liability.
• Intentional harm: If a guard deliberately injures someone, this policy won’t apply.
• Professional mistakes: Errors in judgment, wrongful detainment, or negligence require you to have professional liability insurance.
• Firearm-related incidents: If your guards carry weapons, you may need specialized coverage.

Customizing your policy

Every security business is different, so it’s important to get coverage that fits your specific risks. You may need to adjust coverage limits for large contracts or high-risk areas. Reviewing client requirements before signing contracts is also key since many clients expect specific insurance coverage. 

‍

How to choose your insurance provider

Looking for cheap options isn’t the only important thing when you’re selecting a provider. You also have to make sure you get reliable coverage when it matters most. When you’re comparing providers, here are some factors to consider:

• Coverage limits: Make sure the policy covers enough to handle potential claims, especially if you work in high-risk environments.
  ‍
• Premium costs: Find a balance between affordability and adequate protection since cheaper policies may come with coverage gaps.
  ‍
• Claim handling: Research how quickly and fairly the insurer processes claims. Slow payouts can become problematic for you.
  ‍
• Financial stability: Choose an insurer with a solid reputation and a strong track record of paying claims.

Questions to ask providers

Before signing up, ask potential insurers some questions to make sure their policy fits your needs. Consider these questions:

• What are the coverage limits and can they be adjusted for larger contracts?
• Are there any exclusions that could leave my security company vulnerable?
• How does the claims process work (and how long does it typically take)?
• Do you offer industry-specific coverage options like armed guard liability or wrongful detention protection?
• Are there discounts for bundling with other policies like workers' compensation or professional liability?

‍

Best practices for your security insurance

Good insurance helps, but there are still a few things you need to do to reduce your risks. Here are some things you can try:

• Training your guards: Well-trained employees are less likely to make mistakes that lead to lawsuits. Make sure your guards are aware of policies and procedures — and that their licenses are up-to-date.
  ‍
• Keeping detailed reports: Documenting incidents properly can help defend against false claims. Have your guards use software like Belfry, which has a mobile app that allows them to submit detailed incident reports with evidence attachments.
  ‍
• Using security technology: Cameras, patrol tracking, and real-time reporting add an extra layer of protection, so consider implementing them in your security operations.
  ‍
• Keeping your business insurance up-to-date: Your security business evolves over time with new contracts, bigger jobs, and different risks all affect the type of coverage you need. That’s why it’s a good idea to review your policy at least once a year or whenever there’s a big change in your business.

‍

How Belfry can help you stay in compliance

General liability insurance for security guard companies is a legal necessity that protects you and your business from the financial effects if something goes wrong. It’s a good idea to use tools that can help you stay in compliance more easily — that’s where Belfry comes in.

Belfry is an all-in-one security management platform that helps you manage your team more efficiently while staying on top of compliance.

Here’s how:

• Licensing compliance: It can be challenging to keep track of your guards’ compliance status. With Belfry, you can input their licenses and certifications to get alerts when they’re up for renewal.
  ‍
• Simpler payroll: Belfry automates time and attendance tracking, making it easier for you to get accurate payroll to support insurance audits.
  ‍
• Client transparency: Belfry’s real-time client portal provides your clients with access to patrol activities, incident reports, and compliance information to help build trust.

Want to see how Belfry can help with compliance? Schedule a free demo today.