What Insurance Do Security Guards Need to Get Contracts?
- Jun 4
- 6 min read
Updated: 3 days ago
Landing new contracts is one of the biggest challenges for security guard companies. Many business owners focus on hiring staff, finding clients, and meeting licensing requirements, only to discover that insurance is often a key part of the bidding process.
If you're wondering what insurance security guards need to get contracts, the answer depends on the client, the type of security services you provide, and state requirements. In many cases, clients will not sign an agreement until they receive proof that your business carries the proper insurance coverage.
Why Insurance Matters When Bidding on Security Contracts
Insurance does more than protect your business from financial losses. It also shows potential clients that your company operates professionally and understands risk management.
Property managers, construction companies, retail centers, schools, hospitals, and event organizers often require security vendors to carry certain insurance policies before work can begin. These requirements are commonly listed in contract documents and requests for proposals (RFPs).
Without the right coverage, you may be unable to:
Qualify for certain contracts
Meet vendor requirements
Access job sites
Work with government agencies
Secure agreements with larger organizations
For many security businesses, insurance is not just protection. It is a business requirement.
What Insurance Do Security Guards Need to Get Contracts?
The exact requirements vary by client and location, but most security guard companies are commonly asked to carry the following coverages:
General liability insurance
Workers' compensation insurance
Commercial auto insurance (if vehicles are used)
Professional liability insurance
Umbrella liability insurance
Property or equipment coverage
Many contracts also require a Certificate of Insurance (COI) showing active coverage and policy limits.
If you provide armed security services, executive protection, patrol services, or high-risk security work, clients may require additional insurance or higher coverage limits.
General liability insurance is often the first coverage clients look for when reviewing a security contractor.
This policy may help cover claims involving:
Third-party bodily injury
Property damage
Legal defense costs
Advertising injury claims
Example Scenario
A visitor trips over equipment left by a security team during an event and suffers an injury. Depending on the circumstances and policy terms, general liability insurance may help address resulting claims.
Because security guards regularly interact with the public, this coverage is often considered essential.
Workers' compensation insurance is required in most states when a business has employees.
This coverage generally helps provide benefits for employees who suffer work-related injuries or illnesses.
Security work can involve risks such as:
Slips and falls
Physical confrontations
Repetitive motion injuries
Vehicle-related accidents
Many clients require proof of workers' compensation insurance before allowing guards on-site.
Why Clients Require It
Clients want to reduce the chance that injured workers will seek compensation from them directly. Requiring vendors to carry workers' compensation insurance helps manage that risk.
Professional Liability Insurance for Security Guards
Professional liability insurance, sometimes called errors and omissions (E&O) insurance, protects against claims that a security company failed to perform its professional duties properly.
For security firms, these claims may involve allegations such as:
Failure to respond appropriately
Inadequate monitoring
Missed incidents
Negligent security services
Example Scenario
A client alleges that a security guard failed to follow agreed-upon procedures, contributing to a loss. Depending on policy language and the circumstances, professional liability coverage may help address defense costs and covered claims.
Many commercial clients increasingly request this coverage as part of their vendor requirements.
Commercial Auto Insurance for Patrol Services
Companies that operate patrol vehicles typically need commercial auto insurance.
Personal auto policies usually are not designed to cover vehicles used for business operations.
Commercial auto insurance may help cover:
Company-owned patrol vehicles
Liability arising from accidents
Vehicle damage
Certain medical expenses
Uninsured or underinsured motorist situations
If your business performs mobile patrols, alarm response, or site inspections, clients may expect this coverage.
Umbrella Liability Insurance
Some contracts require higher liability limits than a standard policy provides.
Umbrella liability insurance offers an additional layer of protection above certain underlying policies.
This coverage may become important when:
Working on large commercial properties
Serving government entities
Providing security at public events
Managing higher-risk locations
Many larger clients specify minimum liability limits that can only be achieved through umbrella coverage.
Equipment and Property Coverage
Security companies often invest in equipment that is essential for daily operations.
Depending on the policy selected, property coverage may help protect items such as:
Radios
Surveillance equipment
Computers
Office furniture
Uniforms
Security monitoring equipment
Companies that rely heavily on technology may also consider cyber-related coverage to address certain data and network risks.
Insurance Requirements for Armed Security Guards
Armed security operations generally face greater exposure to risk than unarmed services.
Because of this, clients often require:
Higher liability limits
Professional liability coverage
Workers' compensation coverage
Commercial auto insurance
Additional contractual protections
Insurance requirements for armed security guards can vary significantly depending on state regulations, contract terms, and the nature of the work being performed.
Companies providing armed services should work closely with a licensed insurance agent familiar with the security industry.
Certificates of Insurance and Additional Insured Requirements
Having insurance is only part of the process.
Many clients will request documentation before approving your company.
Certificate of Insurance (COI)
A Certificate of Insurance summarizes your coverage and policy information. It serves as proof that insurance is active.
Additional Insured Status
Some clients may ask to be listed as an additional insured on certain liability policies.
This endorsement may provide specified protections to the client under certain circumstances, depending on policy terms and conditions.
Always review contract requirements carefully before signing an agreement.
Common Contract Requirements Security Companies Should Expect
While every contract is different, many clients ask for:
Proof of general liability insurance
Workers' compensation coverage
Commercial auto coverage
Professional liability insurance
Additional insured status
Waiver of subrogation endorsements where applicable
Certificates of Insurance before work begins
Larger organizations often have formal risk-management departments that carefully review vendor insurance requirements.
How Security Guard Insurance Costs Are Determined
One of the most common questions business owners ask is how much security guard insurance costs.
The answer depends on several factors, including:
Number of employees
Annual payroll
Type of security services provided
Armed versus unarmed operations
Claims history
Vehicle usage
Business location
Coverage limits selected
Costs vary widely, but many small operators find premiums differ significantly based on their risk profile, state regulations, and insurance carrier underwriting guidelines.
A licensed agent can help compare options and identify coverage that aligns with both contract requirements and budget goals.
Tips for Winning More Security Contracts
Insurance alone will not win contracts, but having the proper coverage can remove barriers during the bidding process.
Consider the following best practices:
Review insurance requirements before submitting bids
Maintain active policies year-round
Keep Certificates of Insurance updated
Implement employee training programs
Document safety procedures
Maintain accurate records
Work with an insurance professional who understands security operations
Being prepared can help prevent delays and demonstrate professionalism to prospective clients.
Helpful Resources
Security business owners can learn more about workplace safety and regulatory requirements through these resources:
Occupational Safety and Health Administration (OSHA): https://www.osha.gov
U.S. Small Business Administration (SBA): https://www.sba.gov
These organizations provide educational information that may help security companies understand compliance, workplace safety, and business management responsibilities.
Frequently Asked Questions
Is insurance required for security guards?
In many situations, yes. State laws, licensing rules, and client contracts often require specific insurance coverage before security services can be provided.
What is the most important insurance for a security company?
General liability insurance is often one of the most commonly required coverages. However, many businesses also need workers' compensation, professional liability, and commercial auto insurance, depending on their operations.
Do armed security guards need different insurance?
Often, yes. Armed security operations may face higher risks and frequently require additional coverage or higher liability limits.
What is a Certificate of Insurance?
A Certificate of Insurance (COI) is a document that provides proof of active insurance coverage and summarizes key policy information.
Can one policy satisfy every contract requirement?
Not usually. Different clients may require different coverages, limits, endorsements, or documentation. Reviewing each contract carefully is important.
Get Help Reviewing Your Security Guard Insurance Needs
Whether you operate a small patrol company, provide event security, or manage a growing team of guards, having the right insurance can play a major role in securing contracts and protecting your business.
The experienced team at Wexford Insurance can help review your operations, explain coverage options, and provide a free, no-obligation quote tailored to your business.
Speak with a licensed agent today at 317-942-0549 or visit www.wexfordins.com to discuss your specific security guard insurance requirements.
