Security Company Business Insurance

Security firms can use Insuranceopedia to view business insurance quotes from top insurers. You can find the right plan for general liability and property damage. It is also simple to get coverage for your staff.

Why Do Security Companies Need Insurance?

Operating a security firm comes with higher risks than most other industries. Your guards work in high-pressure environments where split-second choices are frequently necessary. These tense situations can accidentally result in someone getting hurt or property being damaged. Without the right policy in place, your business would have to pay for those expensive medical bills and repairs directly from your own funds.

Insurance is also a vital tool for business growth and compliance. High-value clients often demand proof of coverage before they will hire you. Additionally, you need to protect your employees against the physical hazards of the job. General liability insurance is specifically critical because it covers settlement costs and legal fees if a guard is sued for negligence or misconduct. Finally, maintaining active insurance is usually required by state laws to keep your operating license valid.

What Insurance Do Security Companies Need?

Running a security business involves high risk. You are responsible for protecting people, guarding assets, and managing potentially dangerous situations. From armed guards to mobile patrols, the nature of the job invites unique liabilities. You need specific coverage to handle lawsuits regarding excessive force, on-the-job injuries, or property damage. Here is a guide to the types of business insurance policies that keep your operation safe.

Workers’ Compensation Insurance

What it is: This insurance protects your staff if they get hurt or sick while performing their duties. Most states require you to have this coverage as soon as you hire employees.

What it covers: It pays for medical bills, rehabilitation costs, and lost wages. It can also provide death benefits.

Example: A security guard breaks a leg while chasing a trespasser at a construction site. Workers’ compensation pays for the ambulance, the hospital stay, and their wages while they recover at home.

Professional Liability Insurance

What it is: This is crucial for security firms. It covers claims that your company was negligent or made a mistake. This is vital if your team carries firearms.

What it covers: It handles legal defense costs and settlements if a client claims your failure to act caused them a loss.

Example: A guard wrongfully detains a customer at a retail store, leading to a lawsuit for false imprisonment. Professional liability insurance helps cover the legal fees.

The average cost for this coverage usually falls between $1,000 and $1,000+ per year based on your specific risk factors.

Business Owner’s Policy (BOP)

What it is: A BOP is a package deal. It combines general liability and commercial property insurance into a single plan. It is usually cheaper than purchasing these policies separately.

What it covers: It protects your business location from damage and provides liability coverage for third-party injuries.

Example: A fire damages your main office and destroys your records. A BOP helps pay for the physical repairs and protects you from financial loss.

Commercial Auto Insurance

What it is: Personal car insurance rarely covers accidents that happen while driving for work. You need this policy for any vehicles owned by the company.

What it covers: It pays for medical costs and property damage if your company vehicle causes an accident.

Example: A patrol officer backs a company car into a resident’s fence while doing rounds. Commercial auto insurance pays for the repairs to the vehicle and the fence.

Security companies typically pay an average of $1,200 to $2,400 per year for this coverage.

General Liability Insurance

What it is: This is the starting point for most businesses. It protects you against claims of bodily injury, personal injury, and property damage caused to others.

What it covers: If your operations hurt a bystander or break something, this pays for the medical bills and legal fees.

Example: A guard accidentally knocks over an expensive vase in a client’s lobby. General liability covers the cost to replace the item.

Cyber Liability Insurance

What it is: This protects your business from digital threats. It is essential if you store sensitive client data, alarm codes, or payment information.

What it covers: It helps pay for legal fees, credit monitoring for customers, and notification costs after a data breach.

Example: A hacker breaches your scheduling system and steals the home addresses of your high-profile clients. Cyber liability helps manage the crisis and legal fallout.

Umbrella Insurance

What it is: Umbrella coverage provides an extra layer of protection. It sits on top of your other policies, like general liability and commercial auto.

What it covers: It kicks in when a claim costs more than the limit of your primary policy.

Example: You are sued for $1.5 million after a serious incident involving a guard, but your general liability limit is only $1 million. Umbrella insurance pays the remaining $500,000.

Commercial Property Insurance

What it is: If you own or rent an office, this covers the physical building and its contents.

What it covers: It protects against risks like fire, theft, vandalism, and storm damage that impact your headquarters.

Example: A severe storm destroys the roof of your dispatch center. Commercial property insurance pays for the structural repairs.

Hired And Non-Owned Auto (HNOA) Insurance

What it is: This covers liability when you or your staff use personal or rented vehicles for work tasks.

What it covers: If an employee causes a crash in their own car while running a work errand, this covers the liability where their personal insurance might stop.

Example: You send a supervisor to pick up uniforms in their personal truck, and they hit another car. HNOA covers the damages to the other driver.

Business Personal Property (BPP) Insurance

What it is: This is a specific type of property insurance for movable items. It covers the gear and equipment inside your business.

What it covers: It pays to repair or replace items like computers, desks, and radios if they are damaged by fire or theft.

Example: Burglars break into your office and steal laptops and communication radios. BPP covers the cost to replace this essential gear.

Cheapest Security Company Professional Liability Insurance

The Hartford is currently the cheapest option for Professional Liability coverage for security companies, with an average annual cost of approximately $1,124.

Note: Estimates are based on 2024–2025 rate data for a standard unarmed security guard business with a moderate risk profile ($1M/$1M coverage limits). Actual premiums will vary based on your claims history, state, and specific services offered.

Cheapest Security Company General Liability Insurance

Hiscox is currently the cheapest option for General Liability coverage for security companies, with an average annual cost of approximately $372.

Note: Estimates are based on 2024–2025 analysis of “base” general liability policies for small security firms (unarmed). Actual premiums will vary depending on your location, number of guards, and whether you conduct patrols or stationary guarding.

Cheapest Security Company Business Owner’s Policy

Hiscox is currently the cheapest option for a Business Owners Policy (BOP) for security companies, with an average annual cost of approximately $557.

Note: Estimates are based on 2024–2025 market data for a bundled policy (General Liability + Commercial Property) for a small security business. Actual premiums will vary significantly based on the value of your business property, equipment, and chosen deductible.

How Much Does Security Company Business Insurance Cost?

For general liability coverage, security companies pay about $141 per month. This comes out to approximately $1,692 every year. However, your actual rate of business insurance depends on exactly what your team does. Since armed guards face more danger than unarmed staff, they are more expensive to insure.

Location plays a big role, too. Insurers analyze the local area and the specific nature of your contracts. Guarding a community center is much safer than providing armed escorts for cash transfers. Because the risk is lower, the premium drops.

Finally, the cost depends on your coverage limits and whether you bundle policies. Avoid selecting a plan just because it is the cheapest one. You need to ensure the policy actually covers the specific hazards your business faces.

Note: The estimates above are based on an analysis of 2024–2025 rate data from major insurance aggregators and carriers. These figures represent averages for a standard small-to-mid-sized security firm with a moderate claims history. Actual premiums will vary significantly based on your specific location, number of employees, services offered (armed vs. unarmed), and previous claims record.

How Is Your Security Company Insurance Cost Calculated?

Insurance providers look at several specific risks to calculate the premium for your security business. The size and nature of your work are major factors. A small firm that only uses unarmed guards will usually pay a lower rate than a large operation with armed personnel.

Your location also impacts the price. Insurance costs change based on the state, city, and specific zip code where you operate. This applies to your commercial auto insurance as well. Areas with heavy traffic often lead to higher premiums. Providers also check the driving records of your employees. If your team uses company cars for armed transport services, the cost will likely go up.

Underwriters also review your claims history. If you have filed for insurance payouts in the past, you might be viewed as a higher risk. The total value of your equipment and whether you own or lease vehicles also play a part. Finally, your chosen coverage limits and your business structure, such as an LLC or sole proprietorship, affect the final price.

Following these steps helps ensure you’re properly insured and set up to handle risks confidently and professionally.