Security Guard Firms Insurance

Security guard firms need a layered insurance program covering general liability (including assault and battery), workers' compensation, professional liability, and commercial auto. A small firm with 10 guards typically pays $25,000–$65,000 per year for a complete program. Most client contracts require at least $1M per occurrence GL and $5M umbrella.

Who this is for: Owners and operators of licensed security guard companies — armed or unarmed, static post or mobile patrol — seeking to understand required coverages, realistic costs, and how to place a compliant program.

TL;DR — Key Takeaways

• Assault and battery (A&B) is the #1 coverage gap. Standard GL policies routinely exclude A&B; security firms need an explicit A&B endorsement or a specialty excess/surplus lines policy.
• Workers' compensation costs are high. Security guard payroll falls under NCCI class code 7720, one of the more expensive codes; expect rates of $6–$14 per $100 of payroll depending on state and loss history.
• Contracts drive minimum limits. Most commercial and government clients now require $2M per occurrence GL, $5M–$10M umbrella, and professional liability (errors & omissions) for negligent security allegations.
• Armed vs. unarmed matters to underwriters. Armed guard operations face higher GL and professional liability premiums and require tighter hiring and training documentation.
• Experience modification rate (EMR) is a premium lever. A high EMR from frequent workers' comp claims can double the cost of your WC premium; injury prevention programs pay for themselves.

What Insurance Does a Security Guard Company Need?

A complete security guard firm insurance program includes six core coverages:

Cost ranges are illustrative estimates for a 10-guard unarmed firm in a moderate-risk state. Armed operations, high-claim histories, and major metro locations increase costs materially. Always obtain a formal quote.

Additional Coverages to Consider

• Crime / Employee Dishonesty: Covers theft by guards at client premises. Often required by financial-sector and retail clients.
• Employment Practices Liability (EPLI): Covers wrongful termination, discrimination, and harassment claims from employees — relevant for firms with high turnover.
• Cyber Liability: If your firm uses surveillance systems, access control software, or stores client data, cyber coverage is increasingly requested by clients.
• License and Permit Bonds: Some state licensing boards require a surety bond (typically $10,000–$25,000) separate from insurance.

Why Assault and Battery Coverage Is Non-Negotiable

Standard ISO Commercial General Liability (CGL) forms do not automatically exclude assault and battery, but many insurance carriers add an A&B exclusion endorsement — especially on policies marketed to habitational or bar accounts. Security guard policies are frequently written on surplus lines paper precisely because admitted carriers want to exclude A&B.

What A&B coverage protects against: - A guard uses force to detain a suspected shoplifter who then sues for excessive force or false imprisonment. - A guard is assaulted on duty and the client alleges negligent staffing. - A third party is injured during a physical altercation at a guarded post.

When reviewing any GL quote, confirm the policy form explicitly covers (or does not exclude) assault, battery, and false arrest. If you see a carrier-proprietary or manuscript A&B exclusion endorsement, the policy has a critical gap.

Workers' Compensation: Your Largest Cost Driver

Workers' compensation is legally required in virtually every state as soon as you hire even one employee [verify state thresholds]. For security guard firms, it is also the most expensive single coverage line.

How WC Premium Is Calculated

Premium = (Payroll ÷ 100) × Class Rate × Experience Modification Rate (EMR)

NCCI class codes apply in most states; monopolistic states (Ohio, North Dakota, Washington, Wyoming) use their own rating systems and require coverage through the state fund.

Reducing Your EMR

1. Implement a written injury-prevention program with documented training.
2. Require pre-shift safety briefings and site hazard assessments.
3. Establish a modified-duty / return-to-work program for injured guards.
4. Audit every claim quickly — early medical management reduces severity.
5. Review your NCCI unit statistical reports annually for errors that inflate your EMR.

How to Get Security Guard Firm Insurance in 5 Steps

1. Gather your submission data. Carriers need: number of guards (armed vs. unarmed), total payroll, client types (retail, event, government, cannabis, nightlife), states of operation, vehicle count, loss runs for the prior 3–5 years, and copies of any state security agency licenses.
2. Identify specialty markets. Most admitted carriers limit or exclude security guard risks. Work with a broker who has access to specialty program markets (e.g., Markel, Nautilus, Philadelphia, Burns & Wilcox facilities) that write armed guard and A&B-inclusive policies.
3. Request A&B confirmation in writing. Before binding, get written confirmation from the carrier that assault, battery, and false arrest are not excluded. Review the actual endorsement schedule, not just the binder.
4. Align limits with your contracts. Pull your three largest client contracts, locate the insurance requirements section, and build your program to match the highest required limits — then add excess if contracts conflict.
5. Bind and issue certificates. Once bound, issue certificates of insurance (COIs) to all clients requiring additional insured status. Confirm the additional insured endorsement form (CG 20 10, CG 20 37, or equivalent) matches what each contract requires.

Professional Liability (Errors & Omissions) for Security Firms

Professional liability covers claims that your firm failed to perform its security services with adequate professional competence — most commonly "negligent security" lawsuits. These are distinct from bodily injury claims under GL.

Common negligent security claim triggers: - A crime occurs on a guarded property and the victim sues the security company for inadequate patrol frequency. - A guard fails to respond to an active threat per post orders and a client employee is harmed. - A background-check failure allows a guard with a criminal record to be placed at a sensitive site.

Professional liability policies for security firms are typically claims-made, meaning the claim must be reported during the active policy period. Maintain continuous coverage and purchase tail coverage (extended reporting period) if you change carriers or wind down.

Real-World Example: Mid-Size Armed Security Firm in Texas

This is an illustrative scenario, not a guarantee of pricing or outcomes.

Firm profile: Houston-based armed security company, 22 W-2 guards (18 unarmed, 4 armed), $1.4M annual payroll, clients include two retail shopping centers, one hospital, and a large construction site. Three vehicles. No losses in the past two years.

Insurance program placed:

The hospital client required a $5M umbrella and an additional insured endorsement naming both the hospital entity and its property management company. The broker obtained CG 20 10 (ongoing operations) and CG 20 37 (completed operations) to satisfy the contract language. Total certificate-to-bind turnaround: 4 business days.

Note: Texas allows employers to opt out of the workers' compensation system ("non-subscriber"). This example assumes the firm elected to carry standard WC. Non-subscription creates significant common-law liability exposure and is generally not recommended for security firms.

Frequently Asked Questions

Do security guard companies need professional liability insurance, or is GL enough?

GL covers bodily injury and property damage. It does not cover economic damages from alleged professional failures — like a negligent security lawsuit where no physical injury occurred but a client suffered losses. Professional liability (E&O) fills this gap. Most commercial and government clients now require both.

What is assault and battery coverage and why do security firms need a special policy?

Assault and battery (A&B) coverage pays defense costs and damages when a guard is accused of using excessive force, false arrest, or battery. Many standard CGL policies add an A&B exclusion endorsement. Security firms must verify their policy explicitly covers A&B, which often means placing coverage in the excess and surplus lines (E&S) market.

How much does security guard insurance cost per guard?

A rough benchmark for budgeting: $2,500–$6,500 per guard per year for a full program (GL, WC, professional liability, umbrella). Armed guards and firms with prior losses fall at the higher end. This is a planning estimate only — actual premium depends on payroll, client mix, states, and loss history.

Does workers' compensation cover guards injured during a physical altercation?

Yes. Workers' compensation covers injuries arising out of and in the course of employment, including injuries from assaults on the job. WC pays regardless of fault. The GL policy (with A&B coverage) responds separately to third-party claims against the firm.

Can a guard company use 1099 contractors instead of W-2 employees to avoid workers' comp?

Classification of workers as independent contractors when they function as employees is a serious legal risk. State labor and insurance regulators frequently audit security firms on this point. Misclassification can result in back WC premiums, penalties, and personal liability. Consult employment counsel before structuring guard relationships as 1099.

What additional insured language do security clients typically require?

Most contracts require the security firm to name the client as an additional insured on a primary and non-contributory basis using CG 20 10 (ongoing operations) and CG 20 37 (completed operations) forms. Some clients also require a waiver of subrogation endorsement. Read the contract's insurance section carefully and match endorsements to language before binding.

How does armed vs. unarmed status affect my insurance premium?

Armed operations add underwriting complexity. Carriers assess the caliber of training programs, weapon qualifications, use-of-force policies, and hiring protocols. Armed guard operations typically pay 20%–50% more for GL and professional liability than comparable unarmed operations, and some admitted carriers decline armed guard risks entirely, requiring E&S placement.

What happens to my insurance when I win a large government or hospital contract?

Your payroll and exposure increase, which triggers a mid-term audit on workers' compensation and possibly a premium adjustment on GL (if rated per guard). Notify your broker immediately when you add major accounts. Failing to report new exposures can leave you underinsured and may void coverage for incidents at unreported client sites.

Why Morrow for Security Guard Firms Insurance

1. Access to specialty markets that cover A&B. As an independent agency, Morrow places security guard risks with E&S and program markets specifically designed for this class — not standard markets that quietly exclude the exposures that matter most to your firm. [Morrow to confirm carrier relationships]
2. Fast COI and additional insured turnaround. Security firms win and lose contracts on certificate speed. Morrow's team issues COIs and additional insured endorsements same-day or next-day for active clients, so you never lose a contract award over paperwork.
3. Workers' comp expertise in a high-cost class. Morrow reviews your NCCI experience modification reports for errors and connects firms with carriers that credit injury-prevention and return-to-work programs — reducing the largest line in your premium.
4. Armed and unarmed firm experience. Morrow's commercial lines team understands the underwriting distinctions between armed and unarmed operations, the documentation underwriters require, and how to position your firm favorably at submission.
5. Claims advocacy when it counts. Security incidents generate complex, high-stakes claims. Morrow works alongside your carrier's claims team to ensure proper coverage is applied and your interests are represented — not just the insurer's.

Get a Quote

Ready to place or review your security guard firm's insurance program?

Request a Quote → or call [Morrow to confirm phone number].

Morrow compares coverage across multiple carriers so you get the right program at a competitive price — not just the first policy that looks close enough.

Trust strip: Licensed in [Morrow to confirm states] | Placing commercial P&C since [Morrow to confirm year] | Independent agency — no carrier quotas | Rated [Morrow to confirm review source and rating] by commercial clients

Related Resources

• Commercial Insurance Overview — parent pillar
• General Contractors Insurance — sister industry page
• Commercial Umbrella Insurance — extending your liability limits
• Workers' Compensation Insurance — full guide to WC for labor-intensive businesses
• What Is Additional Insured? — glossary explainer
• Commercial GL Insurance Costs — cost benchmarks by class

Author: Content reviewed by Morrow's commercial lines team. [Morrow to confirm named licensed agent/broker reviewer with designation, e.g., CPCU, CIC]

Published: June 2026 | Last updated: June 2026

Sources: - National Council on Compensation Insurance (NCCI) — class codes and experience modification methodology - National Association of Insurance Commissioners (NAIC) — state filing and market data - Insurance Information Institute (III) — commercial lines coverage definitions - ISO (Insurance Services Office) — CGL form language (CG 00 01, CG 20 10, CG 20 37) - Applicable state Departments of Insurance — WC rates, licensing requirements for security agencies - U.S. Bureau of Labor Statistics — security guard occupation data and injury rates