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Liability and insurance for security companies

Region: Ontario Answer # 6008

To protect themselves and their clients, security companies face specific liability and insurance requirements. These requirements are found in Part VI of the provincial Private Security and Investigative Services Act. In Ontario, a security company must have minimum general liability insurance of $2,000,000.

General liability insurance, also known as Commercial General Liability insurance covers risk of bodily injury or property damage to both clients and employees in the course of doing business. The insurance provider must be licensed under the Insurance Act for the kinds of liability insured, and in the amounts prescribed.

For help with security services, including corporate, business, and personal security, contact our preferred experts, Smith Security.

What types of insurance coverage are available?

  1. General Liability: Security companies typically require general liability insurance to cover third-party bodily injury or property damage claims that may occur during their operations.
  1. Professional Liability (Errors and Omissions): This insurance safeguards against negligence claims, errors, or omissions in providing security services. It’s especially vital for security consultants and advisors.
  1. Workers’ Compensation: Workers’ compensation insurance is a mandatory requirement, and it plays a crucial role in providing coverage for workplace injuries or illnesses suffered by security personnel. Security companies are obligated to pay a premium for each guard they employ to ensure adequate coverage.
  1. Cyber Liability: As security companies increasingly rely on technology, cyber liability insurance helps protect against data breaches and cyberattacks that could expose sensitive information.
  1. Commercial Property: This coverage safeguards the security of company-owned properties, equipment, and assets from various risks, including theft, vandalism, or natural disasters.

What are the benefits of insurance?

Insurance coverage serves as a legal safeguard for security businesses in multiple ways:

Risk mitigation: Insurance helps mitigate financial risks associated with legal claims, such as lawsuits or liability claims, reducing the impact on a security company’s finances.

Legal compliance: Maintaining insurance coverage ensures compliance with legal requirements in many jurisdictions, allowing security companies to operate legally.

Client assurance: Having adequate insurance can instill confidence in clients, demonstrating a security company’s commitment to protecting their interests.

Contractual obligations: Many contracts with clients or partners may require security companies to maintain specific insurance coverage, ensuring contractual compliance.

Types of claims covered by insurance

  1. Personal Injury Claims: If a security guard is accused of using excessive force during an altercation, general liability insurance can help cover legal costs and potential settlements.
  1. Negligence Allegations: Professional liability insurance can protect a security consultant if a client claims that their security advice led to financial losses.
  1. Worker Injuries: Workers’ compensation insurance provides financial support to security personnel injured on the job, helping with medical expenses and lost wages.
  1. Data Breaches: Cyber liability insurance can cover the costs associated with a data breach, including notifying affected parties, legal defence, and regulatory fines.
  1. Property Damage: Commercial property insurance can assist in repairing or replacing security equipment or facilities damaged in incidents like theft or vandalism.

For help

For help with security services, including corporate security, personal protection, construction site security and retail loss prevention, contact our preferred experts, Smith Security. If you are interested in becoming a professional security guard, they also offer a government approved security guard training course.

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