Did you know that a residential break-in happens every 90 seconds in Canada? Most break-ins are by amateur burglars without any sophisticated tools.
The goal of protective services is to protect Canadians and their homes and businesses. Security services are not limited to security personnel or armed guards. Any company that provides alarm installation, remote monitoring, and private investigation services also falls within the ambit of protective services.
There’s a high risk that customers can sue protective services companies for failure to respond or responding late to an alarm. Consider protective services liability insurance if want to protect your business from liability. Keep on reading for a thorough review of protective services liability insurance.
Who Is Protective Services Liability Insurance For?
You may think that protective services liability insurance is only for companies that employ security personnel. Security personnel can include security guards, bouncers, and private bodyguards. The first thing you should know is that that protective services liability insurance is broader than that. It is broad enough to cover everyone from private investigators to locksmiths.
As expected, protective services liability insurance covers security guard services. Security guard services can be broad enough to cover security in all different sectors from aviation to retail.
Statistics Canada defines security guards and related security services occupation in detail. They consider security guard services to include:
- Workers who protect property against theft, vandalism, fire
- Maintain order at public events
- Maintain order at various establishments
- Conduct private investigations
It may surprise you to know the wide range of services that fall under security guard services. For example, security guard services include:
- Airport security
- Armed guards
- Automated teller services (ATM) guards
- Rescue services
- Canine units
The concierge and security at your condo also fall within the same category. Companies that provide security consulting or security training are security guard services. These are all covered by protective services liability insurance.
Private investigators and detective agencies are also protected under protective services liability insurance. Private investigators are licensed under provincial security services. They are also bound by a strict code of ethics.
They conduct background searches, surveillance, vehicle tracking, and even find missing people. With this wide range of activities, there can be errors and mistakes made that can lead to claims against them.
Arson investigators, skip traces and private insurance adjusters may also qualify for protective liability insurance.
If your company conducts electronic sweeps or polygraph testing, you have the same level of risk for third-party claims. You should also consider some form of liability insurance.
Locksmiths sell mechanical or electronic locking devices, safes, and vaults. They can assist with the installation and repairs of these devices. For example, you could be in a situation where the device malfunctions or there were any errors in its installation or repair. In this case, locksmiths can deal with irate clients that have lost millions who will bring claims against them.
A simple mechanical lock may not have as high of a risk as an electronic lock. A small home may not carry as much of a risk as a large business. Either way, locksmiths can be subject to significant claims that can result in losing revenue or even the business. Getting protective services liability insurance can help protect your business.
Alarm Monitoring Stations
Alarm monitoring plays an important role in protecting Canadian homes from illegal entries. A client pays fees and relies heavily on its alarm monitoring. If the alarm monitoring does not work, the client can sue the company for any damages it incurs.
You can be in charge of protecting millions of dollars worth of equipment or possessions. If so, you may be facing significant damage claims if the alarm monitoring fails on your watch. Manufacturers of alarm monitoring are also subject to the same risks.
Inspectors of Fire and Security Alarm Systems
Protective services liability insurance also covers inspectors of fire and security alarm systems. Inspectors must review fire alarm systems monthly and annually under the National Fire Code of Canada. Inspectors are also required to be certified.
For example, a fire inspector conducts inspections regularly and finds no issues. Soon after, the client's premises has a fire and incurs property damage. In this case, clients and third parties can sue the fire inspector for not doing their contracted job.
As inspectors, their job is to find faulty alarms. Where client discovers a fault, customers can sue them for failure to perform their jobs. These companies should also consider getting protective services liability insurance.
What Does Protective Services Liability Insurance Cover?
Before you take the steps to get protective services liability insurance, you must understand what they cover. General liability for third-party claims is the normal part of any business insurance policy. Protective services need additional coverage because of the nature of their work.
Assault and Battery
Assault and battery insurance is specialized insurance for companies that deal with this issue daily.
When providing security guard services, your employees can end up in situations where they have to break up fights. They may also have to deal with aggressive customers who may be under under the influence of drugs or alcohol. In such cases, third parties can sue them for assault and battery.
Assault covers threats to someone’s safety. This can include verbal or physical threats that cause someone to be afraid for their safety. On the other hand, battery deals with physical conflicts. This means your employees hit someone or even touched them without their permission.
If the clients can show medical evidence, your company will have to pay for medical costs and additional damages. An assault and battery claim will protect your company in these situations, so you won’t have to pay for damages out of pocket.
Failure to Perform
Failure to perform insurance is another type of insurance that is specific to protective services. The alarm company is at risk of getting sued if:
- The security, alarm, or fire services is not installed properly
- The security, alarm, or fire alarm fails to operate
Your standard business insurance coverage would likely not cover failure to perform. Ensure you review the fine print of your insurance policy. Take a look at what activities the insurance policy excludes from coverage.
You will need to get additional coverage for failure to perform. Not all insurance companies offer this additional coverage, so you may need to check a few insurance companies. This coverage can provide added protection for your business and employees.
Failure to Provide Warranted Protection
The role of protective services companies is to provide warranted protection to an individual or a business. Where a third-party claims that the protective services company fails to provide the protection, they can sue for damages.
Your standard insurance policy may not cover failure to provide warranted protection. Consider adding this as additional coverage.
This insurance also applies to private bodyguards, especially for celebrities. In this case, they can sue you for failure to complete your contract and provide the warranted protection.
Errors and Omissions
In some cases, the protective services company is being sued for errors and omissions. There is separate coverage for errors and omissions that you can add. This type of insurance covers your company for any claims of negligence or inadequate work.
Error and omission insurance can be especially helpful if you provide advice or consulting services. It can protect you from third-party claims that you or your employees were negligent. You can rest assured when you provide advice, so your advice is not influenced by the risk of potential claims.
Without this type of insurance, you can be liable for millions of dollars in claim payouts. Errors and omissions insurance will cover you for court costs, legal fees, and any settlements that you make.
Rather than external issues, you can also run into internal issues like employees embezzling or stealing from the company. Employee dishonesty insurance covers theft of money, property, or equipment. This can be part of a commercial crime policy.
You want to trust your employees and create a positive work environment. An employee dishonesty policy protects you in case the unexpected occurs. With this policy in place, you can protect yourself and maintain a positive trusting environment for your employees.
Just like any other business, you will have to deal with property damage if someone damages or breaks something your business owns. This can include vehicles, security or surveillance equipment, and regular office equipment.
With this type of coverage, you can protect your business even if your property gets damaged. You can ensure you're covered even if you can’t use the property because of extenuating circumstances.
What’s Not Covered by Protective Services Liability Insurance?
Protective services liability insurance may not cover cyber security. This would be additional coverage that you would need to pay for separately. Cyber insurance covers a wide range of cybercrimes like data breaches and hacking. You and your client's sensitive information is at risk.
Remember that general business insurance doesn’t cover medical costs for employees injured at work. You can get separate workers' compensation insurance to get the extra coverage. Workers' compensation insurance covers medical expenses, lost wages and death benefits.
You may also want to consider the extent of your property damage insurance. While these policies cover natural disasters, they may not cover earthquakes, flood damage or a sewer backup. These natural disasters can cost you a lot of money to rebuild or repair your property. Make sure to do extra due diligence to ensure you’re protected, especially if your office is in a high-risk area.
What to Look for in Company that Offers Protective Services Liability Insurance
Here's what you should look for in an insurance company that offers protective services liability insurance. First, you need to look for experience in the industry. Protective services liability insurance is a specialized area. Your insurance company should understand the specific risks that your company runs into daily.
Rather than review all insurance companies, you can work with companies that will compare quotes for you. Do your research and see which insurance company works best for you.
Some companies specialize in protective insurance liability only. By working closely with their insurance agents, you can determine whether they’re right for you. The right customer service can make all the difference.
You also want an insurance company that offers consistency. Premiums should not shoot up dramatically every year, especially if you haven’t made any claims. A company that offers consistent premiums means they are committed to a long-term relationship with you.
You also want an insurance company that cares. They should spend the time providing details and information without rushing. They should also be available 24/7 to deal with emergency claims.
You want a company that looks to the future of the insurance industry and stays up to date on changing technology. This means a digital experience, new innovative technology and dealing with the rise of cyber-attacks.
Typical Costs of Protective Services Liability Insurance
The premiums for protective services liability insurance vary, depending on many different factors. Because it’s a more specialized field, there may not be a single type of premium. The premium will be customized to you and your business.
Protective services companies can be small companies with a single person or thousands of employees.
The amount of premiums you pay depends on the size of your company. It will also depend on how risky your industry is. For example, condo security may not have as many assaults and battery claims as security in a bar or club. This is because patrons who drink are more prone to fights that security must break.
The scope of the coverage will also determine your costs. The higher the coverage, the higher the premiums you have to pay. You may also have to pay insurance deductibles. The amount of your insurance deductible will also impact the premiums you pay.
As a protective services business, you want to make sure you and your employees are protected. You don’t want your employees restricted in their ability to perform their duties because of fear of being sued. This is where protective services liability insurance comes into play. Here at Insurdinary, we have access to the best protective insurance policies on the market. Reach out to us today.