Security Guard Company Insurance Gaps to Check

The coverage gaps worth checking first at a security guard company sit between what the customer contracts promise and what the policies deliver. Start with five places. Endorsements may limit assault, battery or use of force claims. Certificates may say more than the policy does. Patrol and personal cars may sit on the wrong policy. Crime cover may not reach guard theft. Employment practices cover may exclude pay claims. This guide is for a buyer who has inherited a guard company's policies and wants to know where to look; only the full policy wording tells you what yours say.

The short answer

The standard general liability form has no assault and battery exclusion, but carriers add endorsements. Whether your inherited policy has one, a sublimit (a lower cap on one type of claim) or a professional services exclusion is the first gap to check.
A certificate of insurance is information only. Customers' additional insured, primary and noncontributory (your policy pays first) and waiver terms must be backed by endorsements on the policy.
Auto is a separate policy. Guards who drive their own cars between posts can leave a gap that general liability does not fill.
Crime cover for theft of a customer's property, employment practices cover for pay disputes and umbrella cover each have wording that can narrow them, so read it.
Many gaps can be closed with an endorsement or a different policy rather than a larger limit, though what is available depends on carrier underwriting.

Which coverage gaps should you check first at a guard company?

The table lists the gaps worth checking, with how to spot each and a usual fix. It is a checklist for reading the inherited policies, not a statement that your company has any of them. The core policy list is in what insurance you need after you buy a security guard company.

Gaps to check at a contract guard company
Gap	How to spot it	Usual fix
Assault, battery or use of force limits on general liability	An exclusion or sublimit in the endorsement list, or wording that ties coverage to how the company operates, and whether the wording reaches assaults by third parties as well as guards	Ask the broker to market the account with and without the limit, and read what each version excludes
Professional services exclusion, and no errors and omissions policy	The endorsement list shows a professional services exclusion, and the schedule has no professional liability policy	Ask whether a missed patrol or access error would be treated as bodily injury or a professional claim, and price a professional policy if the answer is unclear
Contracts promise more than the policy gives	A customer contract asks for additional insured status, primary and noncontributory wording (your policy pays first and does not ask the customer's insurer to share) or a waiver of subrogation (your insurer gives up the right to recover its payout from the customer), and the endorsement list does not show them	Add the endorsements or negotiate the contract term
Guards driving personal cars	The auto policy lists only owned cars, and guards use their own cars between posts	Add hired and non-owned auto cover (cover for cars you do not own), and set a rule on personal car use
Guard theft of a customer's property	The crime form covers money and your own property but not clients' property, or the limit is low	Ask whether the form includes employee theft of clients' property, and compare the limit to the contract
Pay claims excluded from employment practices cover	A wage and hour exclusion, or a reduced sublimit for that kind of claim	Read the wage and hour language and treat it as an uninsured exposure unless it says otherwise
Posts staffed by another guard company	You subcontract overflow posts and assume the sub's certificate protects you	Ask for the sub's policies and endorsements, not only a certificate, and check your own policy for any subcontractor conditions
Limits below what customers expect	Contract limits above the combined primary and umbrella limits, or defense costs that reduce limits	Compare each contract to the limits, and ask whether defense costs sit inside or outside the limit. A commercial umbrella usually does not sit over employment practices or professional liability, so ask the broker which policies yours follows
Add-on lines nobody told the carrier about	The company also does alarm work, investigations or cash transport but the application describes guard posts only	Describe every operation to every carrier and confirm each is rated and covered

How do you read the endorsements on the general liability policy?

The declarations page lists the limits. The endorsements decide what those limits mean. Ask for the full policy, then look for these items by name:

An assault and battery exclusion or sublimit. Whether these are common on guard company policies is not something anyone should assume. If one is present, ask what it covers instead and whether a separate policy fills the space.
A professional services exclusion. It may remove claims that arise from the guard company's own judgment calls, such as how it staffs or patrols a site.
Abuse and molestation limits. Relevant where guards work at schools, hospitals or residential sites.
Firearms, weapons or K-9 limits. Relevant for armed posts and guard dog services, which the government's industry code includes.
Wording on training, post orders or background checks. Ask whether any condition ties coverage to how the company operates. This guide has not verified that guard policies contain one.
Whether defense costs reduce the limit. Every legal bill then shrinks the money left to pay a claim. The standard form pays defense outside the limit. Not every policy does.

These are questions to ask, not a list of what guard policies contain. For the general method, see insurance exclusions that quietly kill coverage and the library page on general liability insurance.

Does a certificate prove your customers are protected?

A hypothetical example. At closing, you find the seller issued certificates to ten customers. Each shows additional insured status and primary and noncontributory wording. The policy does carry a blanket additional insured endorsement, but it also carries an assault and battery exclusion. A resident is hurt at one customer's apartment complex and sues both the owner and your company. The owner tenders the claim to your insurer. Whether the insurer defends the owner depends on the endorsement wording and on the exclusion, not on what the certificate shows.

A certificate is issued as a matter of information only and confers no rights on the holder. A customer can be named alongside the guard company when someone is hurt at a site, so these terms can become the real subject of a dispute. Do not wait for one. Pull every certificate the seller issued, match each to the policy endorsements and fix the mismatch. The full method is in certificates the seller issued that your policy does not back up, and the contract side is in contracts, licenses and bonds for a security guard company.

Where do auto, theft and pay claims fall through?

Three claim families land outside general liability, and each has its own gap.

Vehicles. The standard general liability form excludes injury or damage arising from the ownership, maintenance or use of autos owned or operated by or rented or loaned to any insured, even when the claim alleges negligent hiring or training of the driver. A patrol car crash belongs on the auto policy. Guards who drive their own cars between posts raise the non-owned auto question. The codes on the auto policy that say which cars are covered (covered auto symbols) decide which vehicles count, so read them. See new owner review: commercial auto.

Theft. Guards work alone inside customer buildings, with access to stock, keys and equipment. Some crime policies pay for theft discovered during the policy period, others only for theft that happened during it. The 2022 Insurance Services Office (ISO) crime forms include a part for employee theft of clients' property. Older forms and carrier forms may not. Check which form you have, what the limit is and whether it responds to a customer's loss. See new owner review: commercial crime.

Pay and employment. A large hourly workforce brings claims about discrimination, harassment, wrongful termination and pay. Employment practices cover is usually claims-made (it covers claims first made while the policy is active), and wage and hour claims are commonly excluded or carved back, though wording varies by form, so read yours. A California class action by security guards over on-call rest breaks produced a trial court award of about $90 million. The award was reversed on appeal, and in 2016 the California Supreme Court reversed that decision and held that state law bars on-duty and on-call rest periods. This guide does not state what was finally paid. Break rules are state law and differ elsewhere, but the case shows the scale a pay claim by a group of guards can reach. Treat wage and hour as an exposure the policy may not answer, and read wage and hour exposure you inherit from the seller.

Can a lapse or a gap threaten the license?

In some states it can: Florida and Texas can suspend a company license when required insurance evidence lapses, and the rules are in contracts, licenses and bonds for a security guard company. Under the base Insurance Services Office common policy conditions, an insurer may cancel for nonpayment on at least 10 days' notice and for other reasons on at least 30, but state law and endorsements often change those periods. So a premium that slips during the transition is not only a billing problem. Put renewal and premium due dates in one calendar and confirm who receives cancellation notices.

How do you close a gap without cutting the limits your posts need?

Get the full wording. Declarations pages hide the endorsements that matter.
Map the contracts. For each customer, list the coverage and limits it asks for and mark where the policy falls short. How to check your customer contracts against your policies shows the method.
Order the gaps by what a claim could cost you, not by what the fix costs. A use of force claim above your limit matters more than a small property gap.
Ask for options. Some gaps close with an endorsement, others need a new policy, and a few may not be available from every carrier.
Decide with your lender and board in view. Cheaper cover with a narrower wording can cost more after a loss.

A Morrow review can compare the inherited policies against your contracts, flag gaps and request quotes where it makes sense. A quote is not coverage, and any new terms depend on carrier underwriting.

Keep reading

Frequently asked questions

My guard company policy has an assault and battery exclusion. What does that mean for my guards?

It depends on the wording. Some exclusions reach only claims arising from the insured's own contact with someone. Others reach any assault or battery, including an attack by a third party at a customer site, which could affect a claim that a guard failed to protect someone. Ask the broker for the full endorsement text in writing, ask whether it applies to attacks by anyone or only by insureds and employees, and ask a lawyer how it applies to your posts.

Is a certificate of insurance enough for a customer contract?

No. A certificate is information only. Additional insured status, primary and noncontributory wording and waivers must appear as endorsements on the policy itself. Compare each endorsement to each contract.

Does employment practices insurance cover unpaid overtime for guards?

Often not. Wage and hour claims are commonly excluded or carved back in employment practices policies. Read the specific language before relying on it, and ask an employment lawyer about your exposure.

Do my guards' personal cars need to be insured by the company?

If guards drive their own cars on company business, the non-owned auto question applies. General liability excludes auto, so the auto policy has to answer it, and some policies need an endorsement. Ask the broker how the policy treats them.

Who pays if a guard steals from a customer?

It depends on the crime form, the limit, the contract and the facts. Crime coverage for a customer's property is a specific feature of some forms, not a given. Check the form and the contract before a loss, not after.

References

Just bought a business? Get your insurance reviewed.

Send Morrow the declarations pages, loss runs and key contracts you inherited. Morrow can review them against the business you bought, flag gaps and request quotes where it makes sense. Any new terms depend on carrier underwriting.

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This article is general information, not legal, tax or financial advice, and not a coverage determination. Coverage depends on the actual policy wording, carrier underwriting, your purchase agreement and your contracts. Ask your attorney and accountant about deal and legal questions.

Coverage Gaps to Check After Buying a Security Guard Company