A former police officer in Doral finally gets his Class B agency license and lands his first contract: overnight coverage at a warehouse complex near the Palmetto Expressway. The property manager sends over a vendor packet that asks for a certificate showing $1 million in general liability, the client named as additional insured by endorsement, a waiver of subrogation, workers’ compensation and a fidelity bond. He bought a policy to get licensed, and he assumed that was enough. Reading the packet, he realizes the license requirement and the contract requirement are not the same thing, and that he is not sure what his policy actually covers.
That gap is common among new security agencies, and it does not close on its own as a company grows. The insurance a security company needs is shaped by three things at once: what Florida requires to hold the license, what clients require to award contracts and what the work itself exposes the company to.
What Florida Requires for a Class B Agency
Florida regulates private security under chapter 493 of the Florida Statutes, administered by the Division of Licensing. A Class B license is the agency license for the security business itself. Individual officers hold Class D security officer licenses, armed officers also hold Class G statewide firearm licenses, and an agency needs a licensed manager.
Before a Class B license is issued, the agency must file proof of commercial general liability coverage with a combined single limit of at least $300,000, covering the liability of all licensed employees acting within the scope of their employment. The department must be listed so it receives notice of changes or cancellation, the agency must notify the department of claims, and if the policy is canceled, the license is suspended as of the cancellation date unless new proof of insurance is filed first. A coverage lapse is therefore a licensing problem, not only an insurance problem. Our article on Class B security agency insurance requirements covers the filing in more detail.
Why the State Minimum Is Not Enough
The statutory limit is a floor for licensing. It is not what clients ask for, and it is far below what a serious claim can cost. Property managers, associations, retailers and commercial clients commonly require $1 million per occurrence and $2 million aggregate, and larger accounts often require an umbrella on top. A company that carries only the licensing minimum will lose contracts and, more importantly, may face claims that exceed its coverage.
General Liability Written for Security Work
A standard general liability policy written for an office or retail business is not designed for security operations. Security programs are written by specialty markets that understand the class, and the details of those forms matter more than the limit on the declarations page.
The most important detail is assault and battery. Physical confrontation is the claim this industry produces, and the related allegations of negligent hiring, training and supervision usually arise out of the same incident. A policy can cover assault and battery at the full limit, sublimit it or exclude it, and the difference is often buried in an endorsement. Personal injury coverage for wrongful detention and false arrest, coverage for keys and client property in the officers’ care, and professional liability for security services are other provisions worth reading closely.
Armed Officers Change the Program
Whether officers carry firearms is the largest underwriting factor in this class. Armed work narrows the market, raises pricing and brings questions about use-of-force policies, firearm qualification and Class G licensing. A company that adds armed posts without telling its agent is operating outside the operations its policy describes, which is one of the most common ways a security company ends up insured on paper and uncovered after a claim. If you provide both armed and unarmed services, the policy and the workers’ compensation classifications should reflect both.
What Your Contracts Will Require
Client contracts are where most of the insurance detail comes from. Expect stated liability limits, the client named as an additional insured by endorsement rather than only on a certificate, a waiver of subrogation, primary and noncontributory wording, and sometimes a specific assault and battery limit. Contracts also include indemnity clauses that shift responsibility to the security company, and those promises are only as good as the coverage behind them. A certificate should reflect only what the policy actually provides. Before signing, it is worth having your agent compare the contract against your forms.
Workers’ Compensation
Security officers are employees doing physical work, and Florida requires workers’ compensation for non-construction businesses with four or more employees, counting part-time workers. Most security companies pass that threshold quickly. Classification, officer exemptions for owners and the choice between a traditional policy, pay-as-you-go or a PEO all affect cost and administration. Our article on workers’ compensation for security guard companies walks through those choices.
Bonds, Crime and Employment Coverage
Clients increasingly ask for a fidelity bond or crime coverage that protects their property from theft by the security company’s employees, since general liability does not cover dishonest acts. Employment practices liability addresses claims from officers for wrongful termination, discrimination and harassment, which are common in a large, high-turnover workforce.
Vehicles and Patrol
Mobile patrol, alarm response and officers driving between posts bring auto exposure. Company vehicles need commercial auto coverage, and employees using their own cars for work create a hired and non-owned auto exposure that general liability does not address. Our guide to hired and non-owned auto explains that coverage.
Umbrella Coverage
An umbrella policy adds limits over general liability, auto and employer’s liability. It helps meet larger contract requirements and protects against claims that exceed primary limits. For security companies, it is important to confirm whether the umbrella follows the assault and battery terms of the underlying policy or applies its own exclusion.
Worth Confirming With Your Agent
-
That your general liability meets the Class B filing requirement and the department is listed for notice
-
Whether assault and battery is covered at the full limit, sublimited or excluded
-
Whether the policy describes armed work, patrol, events and any detention activity you perform
-
Whether your contracts require additional insured, waiver of subrogation or primary wording by endorsement
-
Whether you carry a fidelity bond or crime coverage for client property
-
How workers’ compensation, EPLI, auto and umbrella coverage fit into your program
This article is general information and is not legal advice.
Talk to Prestige Insurance Group
Prestige Insurance Group insures security guard companies across Florida, from newly licensed Class B agencies to established operations with armed and unarmed officers. We handle the liability, bond and workers’ compensation pieces together and review your contracts so your certificates match what your clients require.
Call the office nearest you. Se habla español.
Orlando: 407-993-2331
Miami: 305-969-8776
Stuart: 772-247-3788
Prestige Insurance Group, License L057894
