In-House Security

[Mr. Security]

Why is contract security so popular? When you look at the price per guard hour billed to the client verses what the guard is paid (profit margin) it seems as if a corporation could simply purchase the same $5 million dollar liability coverage that guard company buys using the profit margin expense. The guards could be bonded as well. What am I missing here?

[N. A. Corbier]

They're not your employees. You don't have to pay FUTA, Worker's Compensation, State Unemployment, file W-2s, file W-4s, ensure they're legal...

You're buying reduction of man-hours in administrating those people.

[Mr. Security]

They're not your employees. You don't have to pay FUTA, Worker's Compensation, State Unemployment, file W-2s, file W-4s, ensure they're legal...

You're buying reduction of man-hours in administrating those people.

Thanks Nathan, for bringing me to my senses.

[11B/PMC]

That's a fair question, Mr. Security, I'll add my pennies.

My employer paid just over $123,000 for liability insurance last year. That was just for U.S. based contracts within a very small region. Overseas, the costs are astronomical.

In-house: Bad conduct by security, property management gets sued and there is not much in the way of defense. PM pays the settlement.

Contract: Bad conduct by security, property management gets sued, PM says "we did all we could do by hiring contractor." Contractor gets sued, insurance covers, contractor pays the additional dividend.

Too easy.

[Mr. Security]

Thanks everyone. As with most things these days, it's not as cut and dry as one might think.

[FlashLightCop]

All in the name of expenses

I work for a large company that is a contract security provider. What they normally do, like for instance, Insurance. Rather than insuring a handfull of officers at an individual rate, why not do a blanket coverage plan that could cover multitudes of officers no matter where the parent company employs them for much less? This is one advantage that larger companies have over smaller companies as well as in house security. Do you see where I am going this?

[Investigation]

Contract vs. Proprietary Security

There seems to be more liability with contract security considering that they are not very selective when it comes to hiring and the training requirements are poor. This holds especially true when it comes to larger operations.

Proprietary security departments do have direct liability and the majority of these operations either hire persons with prior security and/or law enforcement training and college education (at least in this area).

[Eric]

If then, the InHouse Guard force is better educated / trained, would there not be a further reduction in insurance over Contract? (Assuming less trained for arguments sake)

Contract, as stated above is easier, just send 1 check a month. Of course there are pros and cons for each.

[N. A. Corbier]

I work for a large company that is a contract security provider. What they normally do, like for instance, Insurance. Rather than insuring a handfull of officers at an individual rate, why not do a blanket coverage plan that could cover multitudes of officers no matter where the parent company employs them for much less? This is one advantage that larger companies have over smaller companies as well as in house security. Do you see where I am going this?

You don't insure individual officers, though. You buy a policy for your business operations relating to X and Y. The power of the contract company is that they enjoy "risk modifiers" for being so big, and having so few claims, and doing things the insurer wants. (No guns, no arrests, no confrontation, deter and report only.)