Can I Buy Security Guard Insurance That Covers Employees If They Steal From My Clients?

Dishonest employees are an unfortunate part of many security guard companies. But with the correct security guard insurance policy, you can cover your employee’s dishonest acts. The right security guard insurance coverages can give your customers some reassurance that you’ll be able to solve this kind of problem if your employee guards or subcontracted guards steal from them.

What Policies Do I Need?

First, you’ll want to add a “Third Party Endorsement” to your crime policy, since typical Crime insurance policies do not cover your employees stealing from others.

Second, since 1099 subcontractors are not normally covered by these Crime policies, a "Designated Agents as Insured" endorsement is needed to cover their dishonest acts.

With both of these endorsements added to your security guard insurance policy, you can assure your clients that the right insurance is in place to give them peace of mind about having your security guards on their property when no one else is there.

Real Life Example

Let’s imagine a security company owner hires his nephew to work part time, and leaves him on a 1099 instead of putting him on a W2. The nephew steals a few TV's from a customer. This event is NOT covered on a General Liability policy or on a regular Crime policy.

First, in order for there to be coverage for this act on your security guard insurance policy, the security company should have added the nephew as a Designated Agent on their Crime policy. Then, he would be treated like an employee.

Second, in order to protect the customer’s property (the stolen TVs), a Third Party Coverage endorsement should have been added to the security guard insurance Crime policy, since a typical Crime policy only covers the security company’s property, not the customer’s property.

Conclusion

Making sure these endorsements dovetail together to avoid coverage gaps often requires the help on an independent insurance agent. These security guard insurance coverages are not "everyday" coverages, and they must be specifically requested.

Don’t be caught off guard. Make sure your security guard insurance policy has the right endorsements that will pay in the event that your employees steal from your clients.

**For more information about Security Company Insurance contact me at JHall@SouthernStatesInsurance.com or call me at (678) 715-9634. **Our Workers Compensation and General Liability programs are designed for firms with more than $100,000 in annual payroll. Our General Liability programs Include a $1 million limit and start at $5,000 in annual premium in most states.**

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Tags: 1099, crime insurance, crime policy, designated agents as insured endorsement, endorsement, independent insurance agent, Insurance, Security Company Insurance, security guard, security guard insurance, third party endorsement, w2

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