Patrol Business Liability Insurance

[Sampson]

Hello,

I am in the process of creating a private patrol business and I am wondering if anyone can direct me to a good insurance carrier. What should I expect to pay for a 3 man, armed operation?

[N. A. Corbier]

The rub about general liability insurance that you basically need to open the phonebook, pick some insurance agents, and ask.

You'll need the SIC for "Security Guard and Patrol Services," from the Department of Labor.

American Family Insurance does NOT provide liability insurance for security companies, armed or unarmed.

Before you approach a prospective agent for a quote, have printed training material, advertisements, policy manual, etc. The insurance agent will require to send copies of this to the underwriter, who will then decide if your training/tactics/ads/policy are risk or safety factors in your quote.

Minimum underwriter pool insurance was 750 a year.

[Bill Warnock]

May I suggest you do the following:
When you register your corporation and they tell you what types of insurances and fees you have to pay, they will at that time provide you with a list of those insurers registered with and licensed by the state Attorney General (AG) or Secretary of Commerce (SC).
Were I you, I'd follow the rules assiduously.
You are aware of health care insurance scams. The same can be said of any industry.
If you choose a bogus, nonexistant company, and something were to happen you could be sued for failing to exercise due dilligence.
N.A. Corbier, can you provide more precise guidance?
Enjoy the day,
Bill

[N. A. Corbier]

May I suggest you do the following:
When you register your corporation and they tell you what types of insurances and fees you have to pay, they will at that time provide you with a list of those insurers registered with and licensed by the state Attorney General (AG) or Secretary of Commerce (SC).
Were I you, I'd follow the rules assiduously.
You are aware of health care insurance scams. The same can be said of any industry.
If you choose a bogus, nonexistant company, and something were to happen you could be sued for failing to exercise due dilligence.
N.A. Corbier, can you provide more precise guidance?
Enjoy the day,
Bill

Here's how I looked for insurance:

1. www.netquote.com - This is a multi-company site that will put you in contact with agents in your area. These are generally American Family Insurance, though, so any quote you get will go through the Insurance Pool - not AFI. Due note, they wouldn't touch my operation with a 10 foot pole, due to the possiblity of having armed security, patrol security, low income housing contracts, and banks. The risk index was too high.

2. The Hartford Companies - These folks do municipal public safety insurance. You can guarantee that if a company provides insurance services for law enforcement operations, they'll be familiar with private security. These are the people who will give discounts for retention holsters, proper training, etc. They're also the ones who will make demands on your operation to keep insurance coverage.

3. I got out and started going to agencies. I don't have enough information (You need LOTS, including advertisement samples, business plan, training manuals, policy and procedure manual, use of force manual, firearms policy, hiring procedures manual) for a realistic quote, but from what I talked with several insurance agents, the more high speed you are, the less agency pools that will touch you.

Another thing that you don't think about, because the State doesn't mandate it usually, are those "other insurances." General Liability is good and all, but what about employee malpractice, business continuity, business operations, and "that one that deals with HR," where they cover your liability for bad employer-employee practices. There's also Worker's Compensation and Unemployment Insurance policies.

These are all good insurances to have, in and above the mandated minimum coverage by the state.

My state does not provide lists of insurance carriers from the security regulatory body, they only require that you get insurance from a "insurer licensed in the State of Wisconsin," or from the statewide high risk insurance pool.

There is a company I am looking at which does business operations management consulting, in other words: They help you write all these manuals and other things, they help get you insurance, they play accountant, and they play HR. I don't know the ins and outs of WI Insurance, Worker's Compensation, Revenue, and Taxation laws the way I eventually will right now. Why not hire someone to do these things, so that you can concentrate on what you DO know.

[Sampson]

Insurance

Thank you for the information. Right now, I run a P.I. business that is bonded, but the State requires, understandably, liability insurance for security companies. I am going to start off working alone and then, hopefully, hire one or two people to help me out. I am ex-LE and only plan on hiring people with the same background. I don't expect to be to high profile beyond using some basic marked cars to patrol businesses and residential areas.

[Intelsgtnypdssc]

You can try Costanza or Izzo...they handle patrol agencies.....yearly amts are based on income and payroll...but watch if you say 20g a year and you do 80g a year then you'll get an audit by the insurance agency, the tax man and workers comp....which can put u out of business if u don't have the capital to backpay. If you have any good contacts you may think about joining a firm in some capacity and folding them into the deal....Good luck....

[Helen Henner]

Patrol Business Liability Insurance

Liability insurance for Security Guard operations is considered "specialty coverage". Most of the insurance companies out there don't write this particular class of business.

There are a few Program Managers out there (including our firm), who can offer policies that include Errors & Omissions coverage. Minimum premiums for start-up operations generally are in the neighborhood of $2,500 or $5,000 (depending on the specific insurance company offering coverage).

Please ask a local Independent Agent to help you to find a market, and to compare policy forms. It's not easy to compare insurance policies, especially when they include specialty coverages like Errors & Omissions, Assault & Battery, coverage for property that's in your care, custody & control, etc.

In some states (NY for example), in order to obtain a license, proof of insurance must be submitted to the State Licensing authority, confirming coverage for false arrest, false imprisonment, malicious prosecution, libel, slander, and violation of the right of privacy. So a policy would have to cover these things.

Specific applications will be required, and must be signed by the insured.

I hope this is helpful.

[N. A. Corbier]

Liability insurance for Security Guard operations is considered "specialty coverage". Most of the insurance companies out there don't write this particular class of business.

There are a few Program Managers out there (including our firm), who can offer policies that include Errors & Omissions coverage. Minimum premiums for start-up operations generally are in the neighborhood of $2,500 or $5,000 (depending on the specific insurance company offering coverage).

Please ask a local Independent Agent to help you to find a market, and to compare policy forms. It's not easy to compare insurance policies, especially when they include specialty coverages like Errors & Omissions, Assault & Battery, coverage for property that's in your care, custody & control, etc.

In some states (NY for example), in order to obtain a license, proof of insurance must be submitted to the State Licensing authority, confirming coverage for false arrest, false imprisonment, malicious prosecution, libel, slander, and violation of the right of privacy. So a policy would have to cover these things.

Specific applications will be required, and must be signed by the insured.

I hope this is helpful.

It is. An amusing sidenote: Wisconsin requires only Comprehensive General coverage. If you work with firearms, you must have a rider protecting against negligent or wrongful injury/death with a firearm. That's it.

[hrdickinson]

General Liability Insurance

Hello,

I am in the process of creating a private patrol business and I am wondering if anyone can direct me to a good insurance carrier. What should I expect to pay for a 3 man, armed operation?

It's difficult to help you without knowing what state you're in. You need to find a broker who understands the industry. One such company is El Dorado insurance. They are headquartered in Houston but are licensed is several states. They have several programs and are willing to take on startups.

I know them well and believe they can be trusted or I wouldn't refer business to them

Here is a link to their website: http://www.eldoradoinsurance.com/

[Michael Ledgerwood]

Thank you for the information. Right now, I run a P.I. business that is bonded, but the State requires, understandably, liability insurance for security companies. I am going to start off working alone and then, hopefully, hire one or two people to help me out. I am ex-LE and only plan on hiring people with the same background. I don't expect to be to high profile beyond using some basic marked cars to patrol businesses and residential areas.

When I was working for a prior security company we had an apartment complex that was being remolded. The complex was ours but the construction areas belonged to a seperate company. Needless to say we got to be friends with the other officers. One of the officers I spoke with told me he was in the process of starting his own company. He told me his specialty would be construction zones and not patrol, he was also to be unarmed. I asked him if he was going to hire ex-cops and he told me no he wouldn't. It seems that hiring ex-cops increases your insurance premiums significantly. Insurance companies seem to think that the more training a "lowly security guard" has, the more likely it is they overstep their authority and try to play cop therby increasing liability. I don't know what companies he was looking at or anything, but might be something to keep cautious of.

[N. A. Corbier]

I've been told that when getting insurance for something as high risk as guard services, the easiest and cheapest way is "Crawl, Walk, Run."

Start by getting a minimum coverage policy. Unarmed guards, no arrest authority, no intervention. No weapons - AT ALL. This gets you your state licenses. Then, when you're ready, add additional provisions to the insurance policy. Provision for arrest authority. Provision for intermediate weapons. Provision for firearms liability. Demonstrate, of course, that you're agency is competent enough to be trusted with these policies.

Insurance is a form of legal corporate gambling. They bank on your policy not being called out. If it is, they lose. So, they want to ensure that every bet they take is in their favor.