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THE CALIFORNIAN 2026 Q4 – A DIFFERENT WAY TO GIVE YOUR GUARDS A RAISE – WITHOUT RAISING PAYROLL

Insurance, Miscellaneous, The Californian

A Different Way to Give Your Guards a Raise – Without Raising Payroll

Bruce Monteith, ProVision Health, CALSAGA Associate Member

For most California security companies, labor is the business.

Your officers are your largest expense, your most important asset, and increasingly, one of your biggest operating challenges. Wages continue to rise. Recruiting is difficult. Turnover is expensive. At the same time, many security companies operate on margins that make simply increasing wages by another $1 or $2 per hour difficult to absorb.

So what if there were another way?

A properly structured Section 125 wellness program can potentially increase an employee’s take-home pay, provide meaningful healthcare benefits to employees and their families, and reduce an employer’s payroll-tax expense – without requiring the security company to increase its payroll budget.

That sounds almost too good to be true. Which is exactly why it deserves a closer look.

What Is a Section 125 Wellness Program?

Section 125 of the Internal Revenue Code allows employers to provide certain qualified benefits on a pre-tax basis.

When a program is designed and administered correctly, participating employees can reduce the amount of compensation subject to certain payroll taxes while receiving qualified benefits.

The employee benefit is fairly easy to understand: more money can remain in the employee’s paycheck.

In a typical program we see, the increase in take-home pay can average approximately $200 per month for a participating employee.

For a security officer working full time, the economic effect can be similar to receiving roughly a $1.75-per-hour increase in gross wages, depending on the employee’s individual tax situation.

Think about that for a moment.

A security company may be able to give a substantial portion of its guard force the financial equivalent of a meaningful raise – without actually increasing the company’s hourly wage scale.

In an industry fighting every day to recruit and retain good officers, that deserves attention.

The Employer Can Benefit Too

The economics do not stop with the employee.

Because properly structured pre-tax benefits can reduce taxable payroll, the employer may also reduce certain payroll-tax expenses.

Using a simple example, assume a security company has 100 eligible guards and approximately 60% participate.

At roughly $900 in annual employer savings per participating employee, that could produce approximately:

$54,000 per year in employer payroll-tax savings.

At the same time, those 60 participating guards could collectively receive approximately:

$144,000 in additional annual take-home pay.

That is an unusual combination: improving employee compensation while also improving the employer’s bottom line.

And the benefits do not stop there.

Meaningful Benefits for Employees and Their Families

A well-designed program should provide real benefits people can actually use – not simply a tax mechanism with a benefits label attached to it.

In the PH125 structure, the participating employee receives an insured hospital indemnity benefit. In addition, participating employees and their families receive access to a broader package of healthcare services that can include:

Virtual primary care
Virtual urgent care
Behavioral health and counseling
Approximately 1,000 covered prescriptions
Approximately 80 covered laboratory tests
Care navigation and other healthcare support That family component matters.

For many hourly workers, the real value of a benefit is not simply whether they personally can use it. It is whether their spouse or children can access care when they need it without another large out-of-pocket expense.

At a 60% participation level, a company with 100 eligible guards could potentially provide these supplemental healthcare resources to approximately 60 participating employees and their families.

That makes this more than a paycheck strategy.

It becomes part of the company’s overall compensation, benefits and retention strategy.

But Not All Section 125 Programs Are Created Equal

This may be the most important point in this article.

If someone describes a Section 125 program as “free money,” be skeptical. Your skepticism is doing its job.

These programs involve tax law, benefit-plan rules, payroll administration and documentation. They need to be structured correctly.

Before implementing any program, a security company should ask some basic questions:

Has the structure been independently reviewed by qualified tax and legal professionals?

Are the underlying benefits legitimate qualified benefits?

Are the plan documents, payroll procedures and employee communications properly structured?

Who is responsible for administration and ongoing compliance?

What financial protection exists if the tax treatment is later challenged?

That last question is particularly important.

Some providers simply offer an opinion that their structure complies with the Internal Revenue Code. More robust programs go further.

For example, the PH125 program we work with includes independent legal and tax review and also incorporates tax-indemnity insurance designed to cover specified tax liabilities, penalties, interest and defense costs, subject to the terms, conditions and limits of the policy.

That does not eliminate the need for proper compliance. It adds another layer of financial protection behind it.

For an employer considering any Section 125 strategy, that distinction matters.

Why Security Companies Should Pay Attention

Private security may be one of the industries best suited for this type of strategy.

Security companies employ large numbers of hourly workers. Margins are tight. Wage competition is intense. Benefits are difficult to provide economically. And employee turnover remains one of the industry’s most persistent problems.

That creates a difficult equation:

Employees need more. Employers cannot simply keep spending more.

A well-designed Section 125 wellness strategy can change that equation.

Imagine being able to tell your workforce that participating employees can increase their take-home pay, receive an insured hospital indemnity benefit, and give their families access to meaningful healthcare services – while the company itself may reduce payroll-tax expense.

That is not the same as simply adding another benefit. It is a different way of looking at compensation.

It will not solve every workforce problem. It will not replace good management, competitive wages or a strong culture.

But if a security company can increase employee take-home pay, provide useful benefits to employees and their families, and improve its own bottom line at the same time, it is at least worth understanding.

For many companies, the biggest mistake may not be deciding against one.

It may be never running the numbers in the first place.

To learn more or request a confidential financial impact analysis for your company, contact Bruce Monteith at [email protected] or 609-977-7925.

October 28, 2026/by Aley Moyer

THE CALIFORNIAN 2026 Q4 – THE HIDDEN LIABILITY TRAP: WHY ADDING YOUR CLIENT AS AN ADDITIONAL INSURED CAN BACKFIRE

Insurance, The Californian

The Hidden Liability Trap: Why Adding Your Client as an Additional Insured Can Backfire

Shaun Kelly, The Liberty Company, CALSAGA Preferred Broker

If you operate a contract security company in California, chances are you have received a client request that reads something like this: “Please add us as an Additional Insured on your general liability policy.” On the surface, this sounds like a routine administrative task a simple endorsement to keep your client happy and the contract moving forward. In reality, agreeing to this request without fully understanding its implications can expose your company to significant financial and legal risk.

Let’s break down exactly why this is a problem and what you should do instead.

What Does “Additional Insured” Actually Mean?

When you add a party as an Additional Insured on your commercial general liability (GL) policy, you are extending the coverage of your own insurance to protect them. That means your policy, and your policy limits, are now on the line for claims that arise not just from your own actions, but potentially from your client’s actions as well, depending on how the endorsement is written.

This is the crux of the issue. Security contractors are hired to manage risk on someone else’s property. When something goes wrong, an incident involving a visitor, a premises liability claim, or an allegation of negligent security, the question of who is responsible can become deeply complicated. If your client is an Additional Insured on your policy, your insurer may be compelled to defend and indemnify them, even when the incident had nothing to do with your guards’ conduct.

The Core Risks for Security Contractors

Erosion of Your Policy Limits: Every dollar paid to defend or settle a claim on behalf of your client comes out of your aggregate policy limits. A single large premises liability suit brought against your client could exhaust the limits your own business depends on for protection.
Coverage for Your Client’s Own Negligence: Broad Additional Insured endorsements can require your policy to respond to claims caused by your client’s independent negligence, conduct entirely outside your control. You could find your insurance paying for a client’s slip-and-fall claim that has nothing to do with your security services.
Premium Increases and Non-Renewal Risk: When claims are paid on behalf of Additional Insureds, those losses are attributed to your policy’s loss history. This can trigger premium increases at renewal or worse, prompt your insurer to non-renew your coverage altogether.
Contractual Liability Overreach: Many service agreements include indemnification language that, when combined with an Additional Insured endorsement, creates a scenario where you are contractually obligated to hold your client harmless for a much broader scope of liability than your original work warrants.

Not All Additional Insured Endorsements Are Created Equal

The specific language of the endorsement matters enormously. There is a significant difference between an endorsement that extends coverage only for liability arising out of your operations (a narrower, more defensible form) versus one that extends coverage for the Additional Insured’s own acts and omissions. Many clients and even some brokers unfamiliar with the security industry will request or issue the broader version without recognizing the consequences.

Security contractors should work with a broker who understands the nuances of these endorsements in the context of your industry and can help you negotiate endorsement language that is reasonable, limited in scope, and protective of your interests.

Best Practices for Managing Additional Insured Requests

Before agreeing to any Additional Insured request, consider the following steps:

Review the contract language carefully. Understand exactly what indemnification obligations you are agreeing to alongside the Additional Insured status.
Request a narrowly worded endorsement. Insist on language that limits coverage to liability “arising out of your ongoing operations” on behalf of the Additional Insured, not their independent acts.
Consult your broker before signing. Do not simply hand over a certificate of insurance with an Additional Insured endorsement without first understanding the downstream exposure.
Ensure your contract includes a mutual indemnification clause. Your client should bear responsibility for their own negligent acts, and your agreement should reflect that clearly.

The Bottom Line

Adding a client as an Additional Insured is sometimes a contractual necessity but it should never be done reflexively or without careful analysis. For security contractors operating in a high-liability environment, the stakes are too high to treat insurance endorsements as a formality. Every agreement you sign has the potential to reshape your coverage, your costs, and your risk exposure.

Shaun Kelly serves as Vice President of the Security Practice at The Liberty Company Insurance Brokers, one of the nation’s leading independent insurance brokerage firms. With deep expertise in the contract security industry, Shaun has built a reputation as a trusted advisor to security company owners and executives across California, helping them navigate complex coverage decisions, manage contractual risk, and build insurance programs that actually protect their business when it matters most. As the preferred insurance and risk management partner for CALSAGA, The Liberty Company is proud to support the California security industry with specialized knowledge and dedicated service.

Have questions about your Additional Insured endorsements, contract language, or your current coverage program? Reach out to Shaun directly!

Shaun Kelly, VP Security Practice

The Liberty Company Insurance Brokers, LLC

[email protected]

October 27, 2026/by Aley Moyer

THE CALIFORNIAN 2026 Q4 – HOW SECURITY GUARD FIRMS CAN STAY INSURABLE IN 2027

Insurance, The Californian

How Security Guard Firms Can Stay Insurable in 2027

Tory Brownyard, Brownyard Group, CALSAGA Associate Member

What will the 2027 insurance market look like for security guard firms in California? The answer depends on how well firms balance a host of market pressures.

Demand for security services is soaring, a trend that is expected to carry into the new year. So will labor shortages, wage pressures, technology disruption and a challenging insurance market. Security firms that invest in the right areas can position themselves to secure favorable insurance coverage, capture their fair share of demand and stay profitable.

Finding High-Quality Guards

Firms seeking to attract top security talent may have to re-evaluate their salary structures in 2027. California’s minimum wage will increase to $17.40/hour starting January 1, as workers across industries have been struggling to make ends meet.

An April study by the UC Berkeley Labor Center shows why this is the case for security guards. Nearly half of security guards statewide (45%) are low-wage workers, and 80% say they do not earn enough to meet their basic living needs.

The wage pressures are running headfirst into increased demand. Our team at Brownyard Group audits every security guard account at year’s end, and our analysis shows that many firms are generating more payroll and more work. At the same time, the U.S. Department of Labor projects roughly 26,420 security guard job openings in California each year through 2034. That means firms may need to recruit experienced guards away from other employers, which will require paying a higher wage.

Using Technology to Fill the Gaps

As wages increase, security firms are assessing how technology can help mitigate wage pressures, assist human guards and provide affordable options to their clients. Security trade shows now feature countless vendors selling everything from closed circuit television (CCTV) systems to robotic dogs and drones.

Yet firms must balance automation, efficiency and effectiveness, especially when technology is intended to replace human guards. An ideal mix might include using drones or other systems to monitor less populated areas, while using guards to patrol high-traffic areas.

Moving into New Classes of Business

We have seen an incredible demand for executive protection among private companies, including top tech and artificial intelligence (AI) firms, in recent years. While some companies may hire third-party firms to do the work, many others are creating their own in-house security teams.

Companies creating in-house teams are setting high salaries to attract former Navy SEALs and Secret Service agents. Some team leaders earn up to $300,000 annually, while other frontline guards make $100,000 a year or more. Because these teams are staffed by highly skilled professionals and the work is generally low-profile, executive protection is desirable from a risk standpoint, although the 2024 shooting of UnitedHealthcare CEO Brian Thompson stands as a stark reminder of the dangers that exist.

Firms looking to add executive protection to their services in 2027 should be aware that clients often require very high liability limits in terms of insurance, which can be hard to find in today’s market.

Navigating a Rocky Insurance Market

The overall insurance market has softened, but the security class has not. Several longstanding carriers have pulled out of the space over the past few years due to persistent hard market conditions, leaving many guard firms with limited options.

As some insurance carriers fight to remain profitable, they are adding multiple exclusions to their policies. Some exclude coverage for firearms or assault and battery. Others have put $100,000 sub-limits on care, custody and control coverage, which is arguably a guard firm’s biggest exposure.

To see why, consider a firm securing an office building. If someone commits arson while the guard is on break, the firm’s policy would pay only $100,000 toward what could be full liability for a multimillion-dollar loss.

Guard firms that require higher limits may have to shop for umbrella coverage, which is becoming more expensive. Umbrella premiums rose by an average of 5.3% in Q2 2026, marking the 35^th consecutive quarter of premium increases, according to data from The Council of Insurance Agents & Brokers.

For firms that need to insure patrol vehicles, a persistently hard commercial auto market can add to the financial burden. Net losses incurred increased to a five-year high of nearly $50 billion in 2025 due to a rise in nuclear verdicts (jury awards that equal or exceed $10 million), causing commercial auto premiums to keep rising with no apparent end in sight.

How to Maintain Insurability

As insurance capacity decreases and premiums rise, security guard firms would be wise to position themselves as best-in-class risks in 2027. A few ways to achieve this:

Prioritize guard quality over labor costs. Insurers will feel more comfortable writing policies for firms that hire experienced guards. Firms should consider hiring former police officers, Secret Service and FBI agents and others with law enforcement backgrounds. If you cannot afford those candidates, look for guards with four to five years of experience in the security field. Firms that screen new hires thoroughly and invest in adequate training are also more likely to have a favorable loss experience and generate better coverage options.

Be selective about clients and assignments. Firms that cover low-profile risks such as office buildings, warehouses, government contracts and security consulting will be looked on favorably by insurers. Firms that cover high-profile risks such as hospitals, retail, schools, low-income housing, special events, dispensaries or anywhere that crowds gather may struggle to find favorable insurance coverage.

Strengthen your contracts. Look to limit your liability in any way possible. If you are covering high-profile risks, consider limiting your services to observe-and-report and make it clear that your guards will call law enforcement in an incident rather than engage with the perpetrators. Firms that use technology in place of guards should make sure their contracts limit liability, as technology may not be as effective as a physical guard.

Maintain strong fleet safety practices. Firms that implement defensive driver training, prohibit distracted driving, track driver behavior with telematics and keep their fleets up to date can keep their auto insurance premiums in check.

Negotiate liability limits with clients. Clients in hard-to-insure categories may ask you to carry high liability limits that are not financially feasible for your firm. In these situations, honesty is the best policy. Consider informing clients that higher limits are not available for that particular class of business, then negotiate a lower limit that satisfies the client and will not strain your budget.

Rising wages, staff shortages and insurability challenges may make guard firms nervous heading into 2027, but those that commit to hiring experienced guards, choose clients selectively and improve their loss history will be best suited to find favorable coverage.

Tory Brownyard, CPCU, is president of Brownyard Group, an insurance program administrator with specialty programs for select insurance groups. In addition to his responsibilities as president, he spearheads the Brownguard® Security Guard Insurance Program. The firm can be reached at Brownyard.com or 1-800-645-5820.

October 26, 2026/by Aley Moyer

THE CALIFORNIAN 2026 Q3 – HIGH-PROFILE EVENTS, HIGHER STAKES: INSURANCE CONSIDERATIONS FOR SECURITY FIRMS

Insurance

High-Profile Events, Higher Stakes: Insurance Considerations for Security Firms

Tory Brownyard, Brownyard Group, CALSAGA Associate Member

California is a well-known hub for some of the world’s largest, most star-studded events, from sporting events like the Federation Internationale de Football Association (FIFA) World Cup to award shows like The Oscars and countless celebrity gatherings. Such events are often highly publicized, attracting thousands of attendees and international interest, requiring specialized security to properly protect those involved.

While not California-based, Taylor Swift and Travis Kelce’s recent wedding at Madison Square Garden in New York stands out as a prime example of a high-exposure event. Attended by nearly 1,000 celebrities and topping the headlines of major news outlets, many listed this as the event of the year. Among the coverage of the event was mention of the level of security involved. Photos of the extensive security presence, including the New York City Police Department, circulated online, with security costs reportedly reaching $160,000.

While such prominent events can present new business opportunities for security firms, they come with increased risks that could outweigh the profitability of the work. Large-scale gatherings require significant security, introducing unique insurance exposures, including public safety concerns, vendor coordination and a higher potential for severe, costly claims. With such high stakes, security firm leaders must carefully evaluate the insurance risks involved and ensure they have adequate coverage before accepting a high-profile assignment.

Risk Exposures to Consider

High-profile security jobs come in a variety of forms, from celebrity events and entertainment gatherings to conferences and even legal proceedings, like the well-covered Luigi Mangione trial. One key factor that makes these jobs different from securing a commercial building or residential neighborhood is the number of people involved. High attendance rates naturally increase the likelihood of incidents, whether it’s a slip or fall, or a more complex issue such as a crowd surge or serious medical emergency. At the same time, mass gatherings are often considered attractive targets for malicious acts, like terrorism or other intentional violence. These factors place increased responsibility on security personnel to anticipate and mitigate evolving threats.

Additionally, the more high-profile an event, the more public the consequences of an incident will be. While a security issue at a shopping mall or corporate office may attract local attention, an incident at a nationally televised sporting event or celebrity gathering can become headline news within minutes. Such visibility can create reputational damage for the security firms involved, potentially impacting future business opportunities as a result.

High-profile claims also tend to involve greater legal scrutiny and higher settlement costs, making comprehensive risk management practices even more important. Complex contractual language involving liability and indemnification makes the stakes even higher. In the case of a claim, security firms may be questioned to ensure contractual obligations were met, proper safety measures were implemented, and industry standards were followed. Without a clear understanding of contract terms and their legal implications, firms may face unexpected responsibilities or financial exposure.

Security firms should also consider operational issues when planning for liability risks. Larger events require increased staffing and coordination, from event coordinators and venue managers to law enforcement agencies, emergency responders, production teams and numerous third-party vendors. The need for more staff and organization can create liability issues, and even small breakdowns in communication or unclear lines of responsibility can increase the potential for insurance claims.

Best Practices for Security Success

It is important for security firms to consider the risks related to any contract before accepting the work. While high-visibility assignments may present an exciting growth opportunity, the risks may be outside the scope of the firm’s risk appetite and insurance coverage. Before accepting the job, security firm owners and operators should consider carefully reviewing their insurance policies and potential work contracts. In particular, they should consider:

Coverage Gaps: Not all insurance policies include coverage for special events. Some carriers specifically exclude security services conducted at large public gatherings unless coverage has been added or approved in advance. Before committing to event work, firms can speak with their agent or broker and thoroughly review their insurance policies for exclusions related to special events, crowd control or high-profile venues. Assuming policies include event work could result in denied claims and costly losses.
Coverage Limits: Firms should also consider carefully reviewing their insurance coverage limits to ensure they are appropriate for the size and risk profile of the event. A policy that is sufficient for day-to-day commercial security operations may not provide adequate protection for an event involving tens of thousands of attendees or substantial property values. The security firms may also be contractually required to provide higher limits of liability.
Contractual Liability: Contracts related to event work also require scrutiny to avoid risk exposure, especially when working with third parties. Event organizers and certain venues may require specific endorsements or indemnification agreements that transfer liability to the security firm should something happen. Security firm owners and operators should carefully review all contractual language to ensure clear responsibilities are defined and negotiate against accepting liability where possible in the case of a claim.

Security firm owners and operators who consult their insurance agent or broker before accepting a contract, for a high-profile event particularly if they are outside the scope of the firm’s usual operations, can save them from the potential of significant losses. An insurance agent who is well versed in the security space can identify potential coverage gaps, explain exclusions, recommend additional coverage and help determine if adjustments to the policy are warranted.

High-profile events are a mainstay for the Golden State. Understanding insurance coverage details and limits, as well as the risks ahead related to an assignment, before accepting complex or large-scale event assignments can help security firm owners confidently pursue new business while avoiding costly coverage surprises.

Tory Brownyard, CPCU, is president of Brownyard Group ([email protected]), a program administrator that has been a leader in meeting the insurance needs of the security industry for 75 years.

July 27, 2026/by Aley Moyer

THE CALIFORNIAN 2026 Q3 – HOW SECURITY FIRMS CAN REDUCE COMMERCIAL AUTO PREMIUMS

Insurance, Uncategorized

How Security Firms Can Reduce Commercial Auto Premiums

Shaun Kelly, The Liberty Company, CALSAGA Preferred Broker

For many security contractors, commercial auto insurance has become one of the most frustrating line items in the budget. Even companies with solid operations and strong client retention are seeing auto costs climb because the market has become more sensitive to frequency, severity, distracted driving, vehicle theft, repair costs, and nuclear verdict exposure.

The good news is that while you cannot control the broader insurance market, you can control how your company presents risk. Carriers reward disciplined operations. The firms that take driver management seriously, document their controls, and reduce preventable losses are typically in a stronger position at renewal.

Why Auto Premiums Keep Climbing

Commercial auto is no longer priced solely on the number of vehicles you own. Underwriters are looking deeper at driver quality, loss history, radius of travel, vehicle use, after-hours driving, hiring practices, and whether your company has a real fleet safety program or just a handbook sitting on a shelf.

For security firms, the exposure is even more nuanced. Patrol units, alarm response vehicles, supervisor cars, and employees driving between posts all create additional movement and more opportunities for claims. The more miles your business puts on the road, the more important your controls become.

Practical Ways to Improve Your Auto Profile

Tighten driver selection. Use MVR reviews, minimum age and experience requirements, and clear hiring standards before anyone gets behind the wheel.
Create a written fleet safety program. Document expectations for phone use, seat belts, speed, distracted driving, accident reporting, and post-incident review.
Use telematics or dash cameras thoughtfully. Programs that monitor harsh braking, speeding, and unsafe habits can create coaching opportunities and show underwriters that management is engaged.
Control who drives what and when. Limit personal use, overnight use, and unauthorized drivers whenever possible.
Train and retrain. A one-time orientation is not enough. Ongoing driver coaching and documented corrective action matter.
Get ahead of claims. Fast reporting, evidence preservation, and active claims management can reduce severity and improve how your account is viewed at renewal.

What Underwriters Want to See

When an underwriter reviews your account, they want confidence that your company does not treat vehicle exposure as an afterthought. They want to see accountability. That includes driver lists, MVR protocols, written policies, telematics use, disciplinary standards, vehicle maintenance, and leadership involvement.

In other words, reducing premium is not just about shopping harder. It is about becoming a better risk.

The Bottom Line

Security contractors that invest in disciplined driver management are usually better positioned for improved pricing, better carrier interest, and more stable renewals over time. The strongest results come when operational controls, claims management, and broker strategy all work together.

Have questions about your insurance program or contract language? Reach out to Shaun directly.
Shaun Kelly, VP Security Practice
The Liberty Company Insurance Brokers, LLC
[email protected]

Shaun Kelly serves as Vice President of the Security Practice at The Liberty Company Insurance Brokers, helping security company owners and executives navigate complex coverage decisions, contractual risk, and insurance program strategy.

July 16, 2026/by Aley Moyer

THE CALIFORNIAN 2026 Q2 – HOW SECURITY CONTRACTORS CAN PROTECT THEMSELVES CONTRACTUALLY

Insurance, The Californian

How Security Contractors Can Protect Themselves Contractually

Shaun Kelly, The Liberty Company, CALSAGA Preferred Broker

Insurance matters, but contracts often decide who carries the first and heaviest burden when a claim arises. Too many security contractors focus on certificates and policies while signing service agreements that quietly expand liability far beyond the scope of their work.

A bad contract can undo a good insurance program. A strong contract, on the other hand, can help define responsibility, manage expectations, and prevent your company from absorbing exposure that properly belongs elsewhere.

Why Contract Language Matters So Much

When an incident occurs, plaintiff attorneys and carriers alike will look at the contract to understand duties, indemnity obligations, insurance requirements, and the allocation of responsibility between the parties. If the agreement is overly broad, vague, or one-sided, your company may be defending more than your actual role in the event warrants.

For security contractors, that risk is amplified because many clients use aggressive vendor agreements that were never designed with security-specific exposures in mind.

Key Provisions to Review Carefully

Avoid language that requires you to indemnify the client for the client’s sole negligence or for liabilities beyond your own services.
Additional insured requirements. Make sure any additional insured obligation is narrow, reasonable, and aligned with your operations.
Limitation of liability. Where possible, seek language that keeps your contractual exposure proportional and commercially reasonable.
Scope of services. Define what your guards are and are not responsible for. Ambiguity creates room for blame expansion after a loss.
Incident reporting and cooperation. Spell out expectations for communication, access to evidence, and response protocols after an event.
Termination rights. Give your company a practical exit if the client creates unsafe conditions, fails to cooperate, or refuses to align on material risk issues.

Best Practices Before Signing

Do not assume the client’s contract is “standard” or safe. Have agreements reviewed by knowledgeable counsel and a broker who understands security-industry risk transfer. Compare the contract requirements to your actual insurance program before execution, not after a certificate request lands on your desk.

It is also wise to use consistent paper across your organization. A disciplined contract review process is easier to manage when operations, sales, legal, and insurance are not all working from different assumptions.

What Stronger Contracts Really Do

A better contract will not eliminate claims. But it can improve your position dramatically when one happens. It can narrow disputes, reduce unintended assumption of liability, support better insurance outcomes, and help preserve the limits your business actually needs for its own protection.

The Bottom Line

Security contractors should treat contracts as part of their risk management program, not just part of the sales process. The right wording can protect your balance sheet, strengthen your insurance strategy, and keep your company from paying for risks it never agreed to take on.

Have questions about your insurance program or contract language? Reach out to Shaun directly.
Shaun Kelly, VP Security Practice
The Liberty Company Insurance Brokers, LLC
[email protected]

Shaun Kelly began his insurance career is 1992 after graduating from California State University, Fresno with a BS in Business Administration with a major in Finance. In searching for a specific industry to specialize in, he recognized that the Security Industry was growing and expected to maintain significant growth for years to come. Since 1992, he has specialized in the security industry and has experienced the changes over the years. He is the Preferred Broker for CALSAGA, California Association of Licensed Security Agencies, Guards & Associates. He is a Partner at Liberty Company Insurance Brokers, LLC. He is proud to serve his clients and the security industry.

April 27, 2026/by Aley Moyer

THE CALIFORNIAN 2026 Q2 – GUARDING RETAIL ESTABLISHMENTS? WHY CONTRACTUAL CLARITY IS A MUST-HAVE

Insurance, The Californian

Guarding Retail Establishments? Why Contractual Clarity Is a Must-Have

Tory Brownyard, Brownyard Group, CALSAGA Associate Member

A smash-and-grab robbery in January at an Anaheim Hills jewelry store followed an all-too-familiar pattern. An SUV crashed through the front door. Eight suspects wearing ski masks entered the store, hammers and crowbars in hand, and fled with thousands of dollars’ worth of jewels.

These types of horrifying scenes are playing out with increasing frequency throughout the Golden State, raising risks for retailers and the security guards and firms who protect them. Without clear and specific contract language, a fast-moving crime can quickly turn into a slow-moving liability claim that puts a security firm at serious financial and reputational risk.

Retail Theft is Rising

While overall crime statewide is declining, retail theft is a particularly concerning outlier. The latest data from the Public Policy Institute of California shows that reported shoplifting and commercial burglary incidents increased by 3% from 2023 to 2024 and are now up 47.5% compared to 2019.

The Bay Area alone reported 30 violent jewelry store robberies between March and September 2025. About half were smash-and-grabs similar to the January 2026 Anaheim Hills robbery. The others were mob-style, a likely indicator of Organized Retail Crime (ORC).

These numbers in California are indicative of a national trend. U.S. retailers reported an 18% increase in the average number of shoplifting incidents per year from 2023 to 2024, according to National Retail Federation data released in October 2025. Threats or acts of violence during shoplifting or theft events increased 17% during that same time period.

Avoiding Liability Traps

As criminal activity rises in frequency and severity, we expect an increase in retailers hiring private security guard companies to protect their premises this year. While this represents a golden opportunity for security companies, it could also turn into a litigation nightmare if firm owners and operators do not pay attention to the wording in their contracts.

When contract language is ambiguous, firms may pay a hefty price. Numerous court decisions have deemed private security companies liable for injuries to third parties, such as contractors and delivery people, even though the firm was never intended to protect those individuals.

Other decisions have held firms liable for incidents outside the perimeter of a physical location, such as crimes that occur in the parking lot of an outlet mall.

These common liability gaps can cost firms thousands of dollars and could even put their future operations at serious risk. The best way to avoid such an unfortunate situation is to conduct contractual due diligence during your negotiations with retailers and other clients.

Insist on Legal Review

First and foremost, guard firms should have their attorneys review all contracts, especially non-standard contracts drawn up by or negotiated with the client. It is standard for clients to look to transfer as much risk as possible to your guard firm. Your lawyer should review the contract language to ensure it contains appropriate indemnification clauses and limitations of liability.

At a minimum, you and your counsel should clearly understand who is financially responsible in the event of an incident or lawsuit per the terms and conditions. Key phrases to look for include:

“No guarantee” language that states your firm cannot ensure the prevention of theft, violence or loss
“Hold harmless” wording that holds your firm harmless for any incidents resulting from negligent acts or omissions on the part of the client

Also, avoid naming clients as an “additional insured” on your insurance policy for their negligence. If clients are named as additional insured, claims related to that client, their property and their employees may fall under your insurance policy. Instead, include language that limits this to “liability arising out of your work and losses caused by your negligent acts.”

Clearly Define Post Orders

Contracts should clearly define the duties and expectations of security personnel in a given location. Firms should include specifics on the type of activities guards will conduct (observe and report, prevention, notify law enforcement in the event of a crime, etc.) and the duties guards will perform (monitor entry and exit points, check for suspicious behavior, follow incident response steps).

In some cases, clients may ask to expand post orders to specify duties beyond security guard services, such as helping with janitorial duties or sharing clerical duties like inventory management during staffing shortages. Do not include services in your contract that your firm is not insured to perform. If your insurance contains exclusions for these incidental operations, you could be left uninsured for claims related to slip-and-falls from spills you neglected to handle or accounting errors during inventory.

Conduct Thorough Site Reviews

Every retail location presents unique risks, from entry and exit points and visibility limitations to staffing levels and crime history. These factors all influence how security services should be deployed.

For these reasons, guard firms should conduct in-person site reviews before finalizing any agreement. Doing so enables firm owners and operators to better understand their clients’ expectations. It also helps firm decisionmakers develop more accurate post orders and avoid misunderstandings about security professionals’ responsibilities.

As Risks Rise, Seek Clarity

With retail crime on the rise and macroeconomic headwinds, like inflation, persisting, it is safe to assume that California storeowners will continue to battle with robberies and other violent acts in 2026. As risks increase, contractual clarity is one of the most effective tools security firms can use to protect their business. Firms that carefully review contracts, clearly define post orders, and align their contractual obligations with their insurance coverage can avoid liability gaps and safeguard both their operations and their clients’ businesses.

Tory Brownyard, CPCU, is president of Brownyard Group ([email protected]), a program administrator that has been a leader in meeting the insurance needs of the security industry for 75 years.

April 27, 2026/by Aley Moyer

THE CALIFORNIAN 2026 Q1 -THE MORE THINGS CHANGE, THE MORE THEY STAY THE SAME

Insurance, Miscellaneous

The More Things Change, the More They Stay the Same

Shaun Kelly, The Liberty Company , CALSAGA Preferred Broker

We are excited to announce that our team has changed to a new insurance brokerage firm, the Liberty Company Insurance Brokerage, LLC. As this is a name change for us, we want you to know that our team remains the same. We will continue to provide the same support to CALSAGA and all the Members.

The Liberty Company Insurance Brokerage, LLC operates in all 50 states with over 80 offices nationwide and growing. We are an independently owned full-service insurance broker that handles commercial, personal and employee benefits insurance needs of businesses, non-profits, and individuals for over 30 years. We are establishing a Liberty Security Program Group, in efforts to further support the Security Industry in California and other states.

Our goal is to continue providing Members with Risk Management and Safety resources to reduce claim frequency and severity. Any broker can go out and get insurance quotes; it is the service after the quotes that really matters. Liberty Company brings additional resources that will assist in creating positive results that reduce costs, improve efficiency and decision making.

There will be more information to come in future articles.

Thank you and look forward to seeing everyone.

January 21, 2026/by Aley Moyer

THE CALIFORNIAN 2025 Q4 – Be Prepared for Higher Workers’ Compensation Insurance Rates

Insurance, Uncategorized

BE PREPARED FOR HIGHER WORKERS’ COMPENSATION INSURANCE RATES

Shaun Kelly, Assured Partners , CALSAGA Preferred Broker

Great seeing everyone at the CALSAGA conference!

I shared some of this information during the conference and thought it would be good to revisit and assist you in mitigating the potential increase in Workers’ Compensation rates that will be coming.

Over the past 4-5 years we have seen rate increases in all lines of coverage, except Workers’ Compensation, which has seen decreases in rates for the past 8 to 10 years, it was only a matter time before the claims costs caught up to the premiums paid. When rates were soft, the only time that you may have experienced a rate increase is if your Workers’ Compensation Experience Modification increased due to claims or a reduction in payroll or there was a significant change in the types of clients you serviced.

Here are some Cost Drivers for the upcoming rate increases:

Increasing Medical Cost Development
Higher Average Medical Costs
Increasing Cumulative Trauma (CT) Claim Frequency
Increasing Allocated Loss Adjustment Expense
- Legal Defense
- Investigation (Sub-rosa) Costs
- Additional allocation of payroll to service claims

To assist in Mitigating the expected increase in Workers’ Compensation premiums, please review the following:

First, try not to have claims!
Report claims immediately
- To provide medical treatment as soon as possible and return employee back to work
- To allow claims adjuster to manage the claim without delays
Investigate all claims to find the “Root cause”.
- Supervisor should be responsible to report and investigate claim to prevent similar claims in the future
Review “Open” claims quarterly with claims adjuster until closed.
- Important – “Unit Stat” time is 6 months after your policy expires. At Unit Stat time, claims and payroll are provided by your insurance carriers to the WCIRB to calculate your Workers’ Compensation Experience Modification. This is a very important time to work with the claims adjusters to reduce reserves and/or close claims.
Implement a “Return to Work” program and inform your employees and the medical facility of your program works to get employees back to work more expediently.
Identify an Occupational Medical Facility in your insurance carriers Medical Provider Network (MPN). Speak with the Medical Facility to make sure they have the save desire to get the employee back to work as soon as possible.
KEY – Implement a safety culture where employees are recognizing your Safety Policies & Procedures before they engage in their daily activities. SAFETY FIRST!

If you have any questions or if we can be of assistance, please do not hesitate to call.

Take care.

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005. He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or [email protected].

October 28, 2025/by Aley Moyer

THE CALIFORNIAN 2025 Q3 – CYBER INSURANCE

Insurance, The Californian

CYBER INSURANCE

Shaun Kelly, Assured Partners , CALSAGA Preferred Broker

Hope everyone is doing well, and I know all of you are working hard.

Recently, we are receiving more requests for Cyber Insurance coverage than we have in the past. In most cases the requests are a result of a contract requirement, growing concern for data breaches and/or a recommendation from a business legal consultant. In response to any request, we acknowledge that cyber claims should be a concern for all business owners to protect against cyber-attacks, data breaches and fraudulent activity that could potentially cost businesses hundreds of thousands of dollars.

The most common cyber claims are:

Ransomware attacks which lock up your operational data, shut down your ability to operate and then follows the extortion demand to unlock your data.
Social Engineering attacks are fraudulent and accidental payment(s) sent directly to the hacker’s bank account. These claims can occur through the disguise of a invoice from a hacker using one of your common suppliers letterhead and changing the bank account and routing numbers.

Cyber coverage is designed to protect you from First Party claims and Third Party claims. Most First Party claims are what is mentioned above (Ransomware and Social Engineering). Third Party claims are bought by clients, vendors, employees… who have suffered a financial loss because of a data breach or cyberattack to your system. All claims are costly; however, Third Party claims can become very expensive, time consuming and may destroy the trust between you and the other party involved in the claim.

If you do have a cyberattack or an unauthorized access , a forensic investigation will be required to determine if any data in your system was breached. Sometimes cyberattacks or unauthorized access can occur with no loss of data. The cost of the forensic investigation is or should be included in the Cyber coverage terms and conditions.

Protecting yourself from cyber claims includes educating your staff on cyber security best practices, implementing Multi-Factor Authentication (MFA is mandatory for most insurance carriers to provide cyber coverage), installing protective firewalls and any other preventative measures recommended by your service provider.

The coverage terms and conditions for Cyber Insurance are extensive and the information I provided is just the tip of the iceberg. You should contact your broker to obtain quotes and detailed coverage information regarding Cyber insurance.

Take care and be safe!

July 28, 2025/by Aley Moyer