Is it true that California now requires private security firms like mine to carry special liability insurance?
In California, to get or keep a license as a private patrol operator (PPO), you must get and keep a certain amount of general liability insurance. If you fail to maintain the necessary insurance, your license is automatically suspended. Or if you fail to provide proof of insurance at the time you apply for a license, your application will be denied.
Is this in addition to the general liability insurance I carry for my business? How does private security liability insurance work?
Yes, the special liability insurance you need to maintain as a private security firm with a PPO license in California is in addition to the general liability insurance you have for the business and the space it occupies. Private security liability insurance provides coverage for property damage or destruction and bodily injuries or deaths that occur in connection with the performance of work-related duties and tasks by people in the private security and investigation industry: security guards, security patrol officers, private investigators, armored car personnel, bodyguards, and the like.
Your employees are covered wherever they may be assigned and whatever the duties they perform in those assignments. If one of them, or your company, is found to be financially responsible for losses stemming from an incident that occurs during the performance of the job, your private security liability insurance pays, not you or your employee. So, whether a claim is for the cost to replace an expensive piece of jewelry stolen from a store being guarded by your company, or for medical bills for the innocent bystander accidentally bowled over by your guard in hot pursuit of the fleeing thief … it won’t come out of the guard’s own pocket or your company’s bank account.
Given the risks associated with providing private security services, particularly for those licensed to carry firearms, the cost of private security liability insurance pales in comparison to the potential size of a jury award.
How much private security liability insurance does the state of California require me to have?
Your private security company must be covered for at least a million dollars, divided evenly between bodily injury or death ($500,000 per loss) and property damage or destruction ($500,000 per loss). You must provide a Certificate of Liability Insurance in at least that amount to the Bureau pf Security and Investigative Services, which is part of California’s Department of Consumer Affairs.
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