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Which Types of Insurance a Security Company Needs? [2025 Update]

Discover what types of insurance a security company requires for adequate coverage for liabilities, vehicles, personnel, and labor, along with strategies that may assist in meeting your client’s requirements and reducing your overall costs.

A security company may incur significant risks related to property damage, injury, and legal liabilities. Knowing what insurance a security company needs can greatly reduce risks, because the proper insurance greatly aids in protecting the business, personnel, and profits.

This article addresses the following:

Importance of having a security insurance
There are 6 types
How to choose the right type
The type of costs
The top 3 providers
Risk management strategies that help reduce costs

Let us begin with security insurance importance.

What do security companies need insurance for?

When a security company takes on a contract, the personnel are tasked with the more dangerous frontline roles of protecting other people, property, and highly valuable pieces of equipment. With such duties comes a significant amount of risks and liabilities which can lead to lawsuits.

These aspects make insurance for private patrol operators essential:

High-nrisk jobs: Security guards face confrontations requiring decisions. They work in places where an injury to them or damage to property can occur in seconds. For example, armed guards pay a premium for liability insurance because they face higher risks.

Legal exposure: Law firms can sue the company for incurring expenses for medical treatment, damage to property, or for defending a guard who did not owe any wrongful duties.

Client expectations: Several clients will not sign a contract without proof of insurance, and in the absence of insurance, your business may be unable to capture substantial contracts.

Employee protection: Under workmans’ compensation policy, your guards who may sustain physical injuries while on duty will be compensated, and in case they are charged for negligent acts, professional liabilities. Hence, business covers them too.

Regulatory compliance: For licensing purposes, to maintain your legal standing in your state, you will be mandated to possess certain insurance covers. Not taking insurance is dangerous because you will be barred from taking legal actions or incurring hefty fines.

Who owns the insurance company? 6 Types What to Consider

Every security company needs more than a single policy. Some coverages are legally mandated due to specific jobs and services offered, while others mitigate against financial exposure.

The cost estimates below are from Progressive Commercial, Trusted Choice, HowMuch.net, and sector estimates. These are typical costs for small to mid-sized U.S. security companies.

General liability insurance and liability insurance

The oversight here is the very least hazard within the insurance plan. General Liability covers additional risks that security companies incur in the course of their business, including injuries to third parties, property damage, and legal costs.

Example: a guard empties a speaker cabinet that would cost a lot of money to replace and accidentally drops the speaker at a concert venue. The client then sues. General Liability Repair & Replacement reimburse (legal fee).

A Guard’s Liability policy et al. balances legal exposure against other risks. It is not universal in all jurisdictions, but the majority of customers have General Liability Insurance long before entering a contract.

Cost: $3,000 to $4,000 annually, with coverage restrictions based on risk factors.

Workers’ compensation insurance

This policy pays for the medical expenses and the costs for recuperating under the cover of wage loss if a guard is injured on the job. It also shields the business from legal action.

As an example, an employee of the organization sustains a back injury resulting from slipping on a wet floor. Workers’ compensation insurance takes care of the treatment expenses and covers for the income lost.

Applicable for every state as soon as you have a workforce.

Cost: $0.75 to $0.74 per every $100 of payroll.

In case company vehicles are issued to your security staff, it necessitates you to acquire commercial auto insurance coverage.policies do not provide coverage for business use.

Example: A guard gets into a collision with a different vehicle while responding to a call. In the case of commercial auto insurance, vehicles are insured against damages along with the guard’s and claimant’s medical expenses and any other third-party medical expenses that are incurred.

Cost: $1,200 to $1,500 per vehicle per year.

Professional Liability Insurance (Errors and Omissions)

This insurance covers you for any claim by a client that a guard/manager posted made an error, advisory blunder, or failed to avert an incident.

Example: A client claims your team did not follow protocols during a client break-in. This policy pays for all the legal expenses as well as the settlement and any judgement that may be awarded.

Cost: $500 to $1,800 a year

The Commercial Umbrella Insurance

This covers the additional exposure that is not covered by your other policies for the limits of a covered claim.

🔐 Security Business Insurance FAQs

What is security business insurance?
It’s a type of insurance designed to protect security companies from risks like liability claims, property damage, and employee injuries.
Why does a security company need insurance?
Because security businesses face high-risk situations—like guarding property, handling weapons, or dealing with the public. Insurance protects against lawsuits, accidents, and losses.
What types of insurance does a security company need?
General liability, professional liability, workers’ compensation, commercial auto, and business property insurance are common policies.
What is general liability insurance for security companies?
It covers third-party injuries, property damage, and legal costs if someone sues your company.
What is professional liability insurance?
Also called errors and omissions insurance, it protects against claims of negligence, mistakes, or failure to perform services properly.
Do I need workers’ compensation insurance?
Yes, if you have employees. It pays for medical bills and lost wages if a guard gets hurt on the job.
What if my security guards carry firearms?
You’ll likely need firearm liability coverage or endorsements—standard policies may not cover armed security operations.
Is vehicle insurance necessary?
Yes. If your security team uses company vehicles, you’ll need commercial auto insurance for accidents, theft, or damage.
What’s the difference between general and professional liability?
General liability covers bodily injury/property damage, while professional liability covers performance-related errors.
Can I get coverage for stolen or damaged security equipment?
Yes, through business property or inland marine insurance, which covers portable equipment like radios, vests, or cameras.
Do clients require proof of insurance?
Often yes. Many clients won’t sign a contract unless you provide a certificate of insurance (COI).
Does insurance cover lawsuits from false arrest or excessive force?
Specialized liability coverage (like assault and battery or personal injury coverage) may protect you in these cases.
How much does security business insurance cost?
It depends on your location, number of employees, services offered, and past claims. Small companies may pay $1,200–$6,000/year.
Can I bundle all policies into one?
Yes, with a Business Owner’s Policy (BOP), which combines general liability and property insurance. Add other coverage as needed.
Do I need insurance for subcontracted security guards?
Yes, or require them to carry their own insurance and list your business as an additional insured.
What happens if I don’t have insurance?
You risk huge financial losses from lawsuits, injuries, or damaged property—and may lose clients or licenses.
Are background checks and training part of risk management?
Yes. Insurance companies may offer discounts if your guards are well-trained and background checked.
Does security business insurance cover cyber liability?
Not automatically. You need separate cyber insurance to protect against data breaches and online threats.
How can I lower my insurance premium?
Maintain safety protocols, train employees, avoid claims, and shop around for the best rates.
How do I choose the right insurance provider?
Look for insurers with experience in the security industry, solid reviews, and customizable policies.