Kate

The Californian 2019 Q1 – AN INSURANCE GUIDE: THE MINDSET OF AN UNDERWRITER IN THE PRIVATE SECURITY INDUSTRY

AN INSURANCE GUIDE: THE MINDSET OF AN UNDERWRITER IN THE PRIVATE SECURITY INDUSTRY

Blair Brownyard, Brownyard Programs

To the business world, insurance is a necessary evil. However, with insurance costs increasing each year, many security companies would go naked, if their clients didn’t insist that they carry insurance. No doubt after your latest renewal increase, this seems like a reasonable proposition. To minimize your next rate increase, here is the mindset of an insurance underwriter who is asked to underwrite and price the liability insurance of a private security company.

With most products, you know what the cost is when they are sold. Not so with insurance products; an insurance company doesn’t know how much their product costs until 5-10 years after they have sold it. And that’s why the pricing of liability insurance is so unpredictable. To give themselves an edge in predicting how much they pay in claims versus how much they received in premiums, insurance companies develop underwriting guidelines/criteria/signposts, which are supposed to help them determine the probability of losses with a specific type of insured to help them make a profit. The four basics of underwriting guidelines are:

  • Prior Loss/Claim Experience
  • Type of Operations
  • Company Management and Sophistication
  • Contract Language
  1. Prior Loss/Claim Experience

This is one of the most critical elements in underwriting a company. Review your current claims through your insurance broker and be aware of your current claim expenses and reserves annually. A poor claim history has a big impact on your premium costs. A poor claim history is due to a number of factors, some of which can be avoided based on the factors below.

  1. Types of Operations

Different clients will bring different risk to your company because many types of operations have historically brought more likelihood of claims. Your large contract with a fast food chain could be enticing for the money but may result in adverse loss experience and a higher insurance premium. Conversely, a gated community client may help reduce your underwriting factors to the carrier, thus decreasing your premiums. Here is a general list of high risk operations that create higher than average premiums. The locations of these operations are also a big factor – the higher the crime in the area, the higher the risk:

  • Anywhere alcohol is served or sold
  • Crowd control at stadiums, events, or concerts
  • Low-income housing
  • Fast food chains
  • Schools
  • Movie Theaters or Malls
  1. Company Management and Sophistication

Underwriting will typically look at a number of factors relating to how well the company is run from a management perspective. Here are three items that help decide how well the company operates.

Screening, Training, and Supervision

Insurance companies look to the business practice of a company in their requirements for education, training, and supervision of employees. This varies across states and the industry as a whole. The 2018 28-member ASIS standards and guidelines commission has decided there would only be guidelines suggested within the industry and not a set industry standard for all to achieve. With regard to underwriting, underwriters will still look for the highest required guidelines in the industry and rate the company to those suggested guidelines.

Pay Scale and Benefits Given to Employees

Offering higher pay attracts higher qualified, better trained applicants. This translates to smarter, more qualified employees who perform better. And if the company provides health, life, or pension/profit sharing plans, this makes for a more satisfied and healthier employee who is less likely to act negligently or file frivolous workers comp or employee practices claims.

What is the Education/Background of the Principals

Experience in private security, law enforcement, or military, etc. as well as involvement in security management training through organizations like ASIS International or other business programs are positive impacts on the operations of the company and show underwriters an ability of management to overcome obstacles.

  1. Contract Language

Insurance companies may look at your contracts to see how you are protecting yourself in the event of a claim. Unfortunately, your Clients, the Public, and sometimes even the courts think guard companies are deep pockets to cover losses in the event of personal injury. This is attempted by clients in two ways:

  • Indemnification Agreements
  • Additional Insured language

INDEMNIFICATION AGREEMENTS

In construction or service contracts, a hold-harmless or indemnity agreement will be included in the general contractor’s contract to the subcontractor. In order for your security company to limit claim expense and payments, the clause should not include the liability and mistakes of anyone except your own employees. The larger property managers/owners force many broad form indemnity agreements on the security companies for a deep pocket in the event of any accidents on premises. The good news in California is that an indemnity clause for your client’s sole or willful acts is void by public policy. However, be aware, many will still try to pass it through in their contracts.

Additional Insured LANGUAGE

Closely related to indemnity agreements discussed above, additional insured endorsements are used to increase the obligation of your company to defend and indemnify the owner. This indemnity is usually confirmed to them by a certificate of insurance. Your underwriter will be asked to approve additional insured endorsements for many companies by contract. But as parties requested have less and less relation to the contract, the underwriter will likely question the need for such an endorsement. Any additional insured and indemnity requests need to be scrutinized here to limit the exposure for claims. Like all contracts and RFPs, it is advised to have counsel review these clauses to ensure your client is not trying to shift a disproportionate amount of risk to your company.

 

All factors discussed above are the basics for all underwriting in the security industry. Many might dive deeper into data on location of operations or screening processes. And many might try to look at seemingly unrelated issues. This is all part of the investigative process to ensure the risk is being adequately evaluated for claim potential. This is not an exact science, maybe someday we will have exact predictions of claims, but we are not there yet. It is important to note that security risks are high-severity risks and not high-frequency; e.g. many companies can go decades without one liability claim and then get hit with a monster claim. That is the nature of a security risk; a very unpredictable nature. For now, the underwriting process is a moving target for all carriers, and security companies will be best served by building a trusting, open relationship with a reliable carrier who truly understands their industry.

 

Blair Brownyard has been the VP of Brownyard Programs, Ltd. and has worked exclusively with the security industry for the past 8 years. He has a J.D. from Touro Law in Central Islip, NY. Brownyard Programs, Ltd. has underwritten the security industry for the past 25 years and was purchased by Crum & Forster Insurance in 2015 to join forces with the other oldest name in security insurance, CoverX Specialty. Together, Brownyard Programs and the experienced team rebranded as Crum & Forster Specialty, have a suite of innovative products and services to grow with the security industry into the next generation.

This information contained herein is provided for information purposes only and is not intended to be a representation of coverage that may exist in any particular situation under a policy issued by one of the companies within Crum & Forster. All conditions of coverage, terms, and limitations are defined and provided for in the policy. This information is intended for use as a guideline and is not intended as, nor does it constitute, legal or professional advice. In no event will Crum & Forster or any of its affiliates be liable in any manner to anyone who has access to or uses this information.

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Kate

The Californian 2019 Q1 – INSURANCE, TERRORISM & THE TERRORISM RISK INSURANCE ACT (TRIA)

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INSURANCE, TERRORISM & THE TERRORISM RISK INSURANCE ACT (TRIA)

Nick Langer, Turner Surety & Insurance Brokerage, Inc.

First passed into law in 2002, the Terrorism Risk Insurance Act (TRIA) requires commercial insurers to make terrorism insurance coverage available. Since then TRIA has established a federal backstop program, providing the necessary stability to the private terrorism risk insurance market by guaranteeing both the availability and affordability of terrorism insurance coverage for U.S. commercial properties and businesses.

The initial intent of TRIA was to provide a temporary federal backstop program that would allow the economy to recover following the 9/11 attacks. While the reinsurance industry has become increasingly willing to cover terrorism risks over the years, the private market still cannot assume all the risk alone.

On January 12, 2015, President Obama signed H.R. 26, the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA 2015) into law, which extends the federal backstop program for an additional six years through December 31, 2020. As was the case with the prior reauthorization in 2007, TRIPRA 2015 calls for new structural changes to be implemented, which reduces the federal role in the program.

Similar to the TRIPRA 2007 program, TRIPRA 2015 requires certain criteria to have been met before federal coverage under the program begins. First, Property & Casualty insurance losses resulting from a terrorism-linked attack must meet the minimum damage certification level of USD 5 million. If losses are expected to meet this minimum threshold, then the event must also be officially certified as an “act of terrorism.” This certification is determined by the U.S. Secretary of the Treasury in concurrence with the Attorney General of the United States and—new under TRIPRA 2015—the U.S. Secretary of Homeland Security. As an example, insured losses resulting from the Boston Marathon bombing were not expected to meet this minimum threshold, and the event has not been certified as an act of terrorism—even though President Obama referred to it as an act of terrorism during a speech he gave soon afterward. The certification requirement can be frustrating for policyholders, who are left wondering when or if their claims will be covered.

If an act of terrorism has been officially certified, then compensation under the program will still not begin until aggregate insured losses in a calendar year reach the “program trigger.” Under TRIPRA 2015, the program trigger will gradually be raised each year from USD 100 million in 2015 to USD 200 million by 2020. The increase to the program trigger is considered to be one of the most substantial changes to the program and aims to transfer more of the risk to the private insurance market. Some argue that this may negatively impact the solvency of small, insufficiently diversified insurers who are not well positioned to absorb losses up to this level.

Once all the initial criteria for federal coverage have been met, an insurer who incurs losses resulting from a certified act of terrorism is required to first cover a portion of the losses—the insurer deductible. The amount of each individual insurer’s deductible is calculated as 20% of the insurer’s direct earned premiums in TRIPRA-eligible lines of business for the previous calendar year. For losses in excess of the insurer deductible, each insurer is also required to cover a pro-rata share of the losses, or copayment, with the federal government providing compensation for the remaining losses. Under TRIPRA 2015, the insurer copay will gradually increase each year from 15% ultimately to 20%.

The annual cap on liability also still applies under TRIPRA 2015, which means that no federal or private insurer payments are compensated for any portion of aggregate industry insured losses exceeding USD 100 billion. TRIPRA 2015 also increases the industry annual aggregate retention from USD 29.5 billion to USD 37.5 billion in 2019, the fifth and penultimate year of the program. In 2020, the final year of TRIPRA 2015, the retention will rise to an amount equal to the average of all participating insurers’ deductibles over the previous three program years. The Congressional Budget Office (CBO) has estimated that this amount could be as much as USD 50 billion.

If you have been involved in the process of securing insurance for your business, then you have received some version of a TRIA Disclosure giving you the option to “Accept” or “Reject” coverage for acts of terrorism. To better understand this coverage, it is important to understand the difference between “Certified Acts of Terrorism” and “Noncertified Acts of Terrorism.”

A Certified Act of Terrorism is eligible for coverage under TRIA. Insurance carriers paying claims in response to a certified act of terrorism will be reimbursed by the federal government. An act of terrorism is certified by the Secretary of Treasury and must meet the following criteria:

  1. Be a violent act or an act that is dangerous to human life, property, or infrastructure;
  2. Cause damage within the United States or other area of U.S. sovereignty
  3. Be committed as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the U.S. government by coercion; and
  4. Produce property-casualty insurance losses in excess of $5 million.

A Non Certified Act of Terrorism is simply that… an act of terror that is not certified by the Secretary of Treasury and therefore does not trigger the federal reimbursement provisions of the Terrorism Risk Insurance Act (TRIA). As discussed earlier, TRIA mandates that commercial insurers offer coverage for “certified acts of terrorism,” however they are free to exclude (or cover) “noncertified acts of terrorism.”

 

As you can see there are many moving parts of TRIA and thus far the claims process remains untested. Since TRIA is a backstop, in essence a federal reinsurance program for Insurance carriers, it is likely that carriers will be measurably slower in the adjusting of claims should an act of terrorism occur. Couple that with the fact that the act itself expires December 31, 2020, and the federal government looks to diminish their role as reinsurer to the carriers there simply are no guarantees as to the future.

Nick Langer is a Senior Risk Advisor at TSIB with more than 15 years of property & casualty broker experience. He specializes in the Construction, Energy and Security Industries. Nick enjoys the challenge of finding solutions to his client’s unique needs and is committed to learning the intricacies of each client’s business operations.

Prior to joining TSIB Nick had his own insurance agency that specialized in both personal and commercial lines of insurance. After 7 successful years of growing his property and casualty agency he joined Tolman & Wiker Insurance Services, LLC.

Nick regularly presents at trade associations on risk management topics including: Workers’ Compensation, Claims Management, Risk Management, Contractual Risk Transfer and Employment Practices Liability.

Nick is committed to improving the lives and success of his clients for the benefit of the community through his various roles and leadership positions. He has served as the Insurance Advisor to the Board of Directors of The California Association of Licensed Security Agencies, Guards and Associates (CALSAGA). He is President of The Bakersfield Young Professionals in Energy (YPE), a member of the Associated Builders & Contractors (ABC), and the former Government Affairs Committee Chair for the Central California chapter. Nick is a member of the Associated General Contractors (AGC) and the American Society of Safety Engineers (ASSE).

Nick has Bachelor of Science in Business Economics from University of California, Santa Barbara. Nick and his wife have three children and three rescue dogs. In his spare time, Nick is an avid fisherman and enjoys golfing, hiking and fitness training.

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Kate

THE CALIFORNIAN 2018 Q4 – SECURITY GUARD VS. SECURITY OFFICER- WHICH SHOULD YOU USE?

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SECURITY GUARD VS. SECURITY OFFICER- WHICH SHOULD YOU USE?

Kwantek Team

So, you have a position opening up in your contract security firm. Now is the time to post the job in various places using your standard job description and other boilerplate materials you use when hiring.

You know you need systems in place for this, so you arm yourself with tools like an applicant tracking software or detailed hiring spreadsheets.

The question now becomes, what should your job title be?

Security Guard or Security Officer?

Many people in the industry will tell you there is no difference in the two.

Some say an Officer is armed and a Guard is not.

Some say the Officer has greater training and/or responsibility.

As we look at today’s hiring and retention landscape, there are two main reasons you should prefer the term “Security Officer” rather than “Security Guard.”

1) “Security Officer” is Searched More Often on Indeed

Thanks to data made publicly available by Indeed, we are able to know exactly how people are searching for security jobs.

In September of 2018, “Security Officer” was searched 725,027 times.

“Security Guard” was only searched 392,036 times, nearly half that of “Officer.”

If you want your job to be seen, the first logical step is to make the title what people search the most.

But it goes deeper than just what the candidate is searching. While it might help you edge out “Guard” in the search results, Indeed is smart enough to show jobs with both titles.

Making sure you get good placement is one thing, but how many people actually click your job?

In September of 2018, jobs titled “Security Officer” received 3,688,632 clicks.

Jobs titled “Security Guard” received only 975,338 clicks.

Not only does “Officer” get nearly twice as many searches as guard, it gets nearly FOUR TIMES as many clicks.

We like to let the data speak for itself. This is one of those cases.

2) Appeal to Your Audience

The first rule of copywriting is to appeal to your audience.

Your audience (your current and prospective employees) wants to feel respected and important.

Put simply, “Officer” has an implication of greater responsibility than “Guard.”

Implications aside, perhaps you actually believe there to be a fundamental difference between the two titles.

Here’s the reality…

A good guard, officer, or watchman is alert and observant.

They are ready and able to defuse a situation with words rather than weapons.

They are helpful to others and they follow rules of the management and client.

All of these responsibilities are those of an officer, and labeling them as such works to enhance their sense of self-worth and pride in their job.

When making this decision, we ask ourselves: what’s the goal?

Is the goal to be “right” in a semantics discussion?

Or is our goal to attract the best and most talent and keep them employed on our teams?

At Kwantek, we much prefer the latter, therefore “Security Officer” is the title we recommend.

If you insist on there being a difference between the two, consider using “Senior Security Officer” and “Security Officer” job titles. The difference could mean greater retention and/or more applicants.

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Kate

THE CALIFORNIAN 2018 Q4 – HOW INTEGRATED TECHNOLOGY FOR SECURITY CONTRACTORS CAN ENABLE GROWTH AND INCREASE EFFICIENCY

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HOW INTEGRATED TECHNOLOGY FOR SECURITY CONTRACTORS CAN ENABLE GROWTH AND INCREASE EFFICIENCY

TEAM Software

Why security management software is worth the spend.

In their July 2018 annual U.S. Contract Security white paper, Robert H. Perry & Associates, Inc. estimates the outsourced contract security industry in the U.S. to be worth $25.5 billion. That’s a four percent increase over previous estimates. And, while analysts expect steady growth over the next few years, security contractors still deal with high labor costs, wage creep and a narrow profitability margin of about four percent of revenue, according to IBIS World’s 2018 report on the industry. That means keeping a laser focus on labor and operating costs is critical. The businesses who can juggle these demands will have the most to gain. It’s no secret that technology can help. In fact, investing in holistic enterprise-level software with a proven track record can pay off quickly in increased efficiency and site-level profitability insight, enabling security companies to grow in fiercely competitive markets.

Maximize efficiency and automation with one holistic system

According to the IBISWorld’s April 2018 Security Services in the U.S. report, efficient work practices are one of the key factors to success in the contract security industry. Eliminating redundant work and manual processes offer a one-two punch in maximizing operational efficiency, and a holistic software platform can solve those challenges by connecting the financial, operations and workforce management components of the business in one system. It’s cheaper in the long run, too, with no need for multiple software packages, expensive integrations or custom interfaces.

The WinTeam ERP for security contractors includes financials, accounting, guard scheduling, time and attendance, human resources, payroll, compliance business analytics and employee self-service features. Combined, they connect executive-level decision-making, back office functions and field-based operations.

“For us, the biggest advantage of using an integrated system has been the ease of use. There’s only one platform to use,” said Gail Tutt, controller at First Alarm Security & Patrol, a California-based firm with 1,600 employees. “It’s global, go-anywhere functionality.”

For Phelps Security, Inc., a 300-employee contract security firm operating in the Memphis, Tennessee, area, cumbersome manual processes and multiple subpar software systems sent the company on the hunt for a better solution. The company implemented TEAM Software’s solutions and  reduced payroll processing time by 90 percent.

“Before our software did 10 percent of the work, and we put in 90 percent of the effort,” said Andy Phelps, business manager for the company. “Now, as long as we have it set up correctly, we can put in 10 percent of the effort and WinTeam will do 90 percent of the work. I don’t have to deal with file exports or cross-integration between systems anymore.”

Bogged down by clunky plug-ins and manual spreadsheet-driven processes, Paladin Security Group, Canada’s largest independent security provider, was also in the market for technology that could help accelerate the payroll and billing processes. The company also needed the flexibility to keep up with and customize province-based pay requirements. In 2012, company leadership began evaluating software solutions that could rise to the challenge.

 

“Our main goal was improving efficiency on the billing and payroll side. We needed to find a way to mitigate errors and speed up that process,” said André Albert, Vice President of National Quality Standards and Support at Paladin, who was part of the team evaluating software providers. “What it comes down to is flexibility. Having everything integrated into one platform allowed us to break down pay requirements by province. We can set pay and overtime rules and billing by province to comply with legislation or by client to meet our contract obligations. We can even customize notifications based on branch or province.”

The benefits of integrated technology span the organization, so almost every department gains an efficiency advantage. Jaime Brosnan, Director of Marketing and Communications at Brosnan Risk Consultants, a security contracting firm based in New York, saw onboarding time for new employee paperwork decrease from 20 minutes to an average of three minutes per employee thanks to TEAM’s workforce management and employee and customer self-service components.

Drive profitability and enable growth

The power of shared data in a holistic software system is invaluable. In industries where margins are narrow, understanding which jobs are profitable and having a clear financial picture drives better business management. Job costing, a crucial outcome of shared data in one system, gives contractors site-level profitability insight, enabling smarter decisions that reduce costs, maximize revenue opportunities and enable real, measurable growth.

“One of the big reasons we’ve stayed with WinTeam is the ability to drill down, all the way to the source to get the exact information you we need,” said Tracy Ver Mulm, Accounting Manager for Per Mar Security Services, a 2,400-employee security firm headquartered in Davenport, Iowa. “When you have everything in one system, all it takes is one update to automatically give you the most updated financials. That’s huge.”

“We had been using another solution with no integration to financials,” said Dave Pack, who has been the Executive Vice President of Titan Security for the past eight years. Titan is a Chicago-area contractor that schedules more than 54,000 hours per week and manages more than 1,600 security staff. “It was only a scheduling package, and it had nowhere near the level of detail or reporting capabilities that TEAM has.”

Pack points to that shared data as a big benefit for the business while building financial awareness and eliminating silos of information.

 

“With the benefit of the integrated operational and financial data, we can put the right information into our operators’ hands,” Pack said. “We can have a dialogue about expectations and results on the job level and share that information and data with our clients. It helps increase transparency and provides a sense of ownership.”

 

There’s no denying that integrated technology is a significant investment, so it needs pay for itself in efficiency and scalability. Security management software must enable growth and set businesses up for success now and well into the future.

The software system has proven to be a scalable solution for First Alarm Security and Patrol that has driven growth for the guarding company. Through strategic purchasing contracts and organic growth, the company has seen a minimum of 35 percent year-over-year growth without having to increase staff significantly to keep up.

Because Paladin isn’t tied down to inadequate processes, the company has gained the flexibility to expand easily, according to Albert.

 

“We’ve been growing exponentially,” said Albert. “Last year for example, we grew our employee count by about 20 percent. And, we expanded into the U.S. so there’s a whole other market.”

 

“The technology has definitely allowed us to scale more effectively. A lot of our national competitors struggle in Chicago because it is a very unique, customer-focused market,” Pack of Titan Security said. “Each building is unique, so to be able to report operational data, financials and invoices in different ways is important to our clients. Our ability to bill in multiple formats allows us to never say no to clients or prospects. We provide high-touch customer service, so we want to say yes.

“In the Chicago market, there is a lot of activity and opportunities for Titan,” Pack continued. “We have very professional operators, and with a system like TEAM and all its bells and whistles behind us, we can compete with anybody.”

 

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Kate

THE CALIFORNIAN 2018 Q4 – ACTIVE SHOOTER INCIDENTS: HOW SECURITY OFFICERS ARE HELD LIABLE

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ACTIVE SHOOTER INCIDENTS: HOW SECURITY OFFICERS ARE HELD LIABLE

Tory Brownyard, President, Brownyard Group

The sheer volume of active assailant incidents in 2017 and 2018 has left many observers feeling the prognosis is grim for halting these incidents. Yet the security industry has remained a practical and hopeful voice in response, as experts seek to address the threat head-on with strategies and practices for access control, de-escalation and timely reporting.

However, one critical element is sometimes left out of these discussions: reducing potential liabilities. In the aftermath of active shooter incidents, as we all search for a cause, sometimes security is held up as the party at fault. Even if an officer behaves professionally, they may be held liable—whether it’s a verdict in the courtroom or the perception of those who read or view it in the media.

It may seem self-serving to focus on mitigating the risks associated with protection. I know security professionals want to focus on protecting the people and businesses they have been hired to serve. Yet they can’t do that job if they do not protect themselves as well.

Clients have high expectations for security officers. In fact, they sometimes expect security contracts to guarantee total safety and security, which no firm can promise. From an insurance perspective, I recommend firms seek to include indemnification clauses in their contracts, which transfer risk from the security professionals to the people who contract them, essentially holding the security professionals harmless. Similarly, contracts may include force majeure clauses, which remove liability in the case of an unforeseeable or extraordinary incident.

However, the reality is that contracts do not always include this language. When they do, the incidents that are covered by either clause can be up for debate. When that is combined with the very real and valid trust clients put in security professionals, it can result in litigation. These lawsuits may include allegations of negligent security, failure to protect or failure to anticipate foreseeable violence.

During litigation, attorneys sometimes raise the issue of poorly designed or improperly followed policies and procedures. For example, some businesses have a “zero tolerance policy” for workplace violence. This is communicated to security officers with little indication of how this impacts their post orders or how they should respond in specific situations. Instead, post orders communicated in contracts should create clear expectations for officers and, ideally, be developed in conjunction with security experts.

Clear policies and procedures not only protect everyone during an active shooter incident, but also can help security professionals defend themselves in the event of a lawsuit. A customized active shooter response plan—that details a security officer’s role—is a critical tool for reducing losses during a tragic incident.

It should also be emphasized that training supports post orders, policies, procedures and response plans, both for officers and for the people they are protecting. Without effective training, neither party will be able to execute even the most carefully designed plans.

Yet how do you plan when clients do not fully grasp their exposures and security flaws? Planning without a security assessment puts security professionals in a difficult position as they are asked to execute policies and procedures that they do not agree offer the best protection. Even if a client declines, offering a security assessment—and doing so in writing—allows the client to consider the option for the future and demonstrates the security firm was diligent in attempting to fulfill their obligations to the client.

I am sure security professionals would prefer to focus on their area of expertise—protection—not the threat of lawsuits. But taking a proactive approach to managing active shooter risks and attending to potential sources of liability can free officers to focus on what they do best.

 

Tory Brownyard, CPCU, is president of Brownyard Group (www.brownyard.com), an insurance program administrator with specialty programs for select industry groups. In addition to his responsibilities as President, he currently spearheads the Brownguard security guard insurance program. For more information, contact him at TBrownyard@brownyard.com.

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Kate

THE CALIFORNIAN 2018 Q4 – SB 1343 EMPLOYER ALERT – NEW SEXUAL HARASSMENT PREVENTION TRAINING REQUIREMENTS

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SB 1343 EMPLOYER ALERT – NEW SEXUAL HARASSMENT PREVENTION TRAINING REQUIREMENTS

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

With the changes that are happening in society regarding the “Me too” movement and the subsequent litigation surrounding the allegations, it does not surprise me that California legislators passed Senate Bill 1343, effective January 1, 2019.

The current law requires employers with 50 or more employees to provide at least 2 hours of prescribed training and education regarding sexual harassment, abusive conduct, and harassment based upon gender, as specified, to all supervisory employees within 6 months of their assumption of a supervisory position and once every 2 years, as specified.

The new law reduces the 50 employee trigger and now requires an employer who employs 5 or more employees, including temporary or seasonal employees, to provide at least 2 hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and once every 2 years thereafter, as specified.

Here is a brief summary of the new bill:

1. All employers with 5 or more employees, including temporary or seasonal, must provide all employees in a supervisory role a minimum of 2hrs of sexual harassment training (this does not include bullying, which is required and is in addition to the minimum 2hr requirement).

2. All employers with 5 or more employees, including temporary or seasonal, must provide all employees in a NON supervisory role a minimum of 1hr of sexual harassment training.

3. The period in which this is to be accomplished is 1/1/2020, if the employee is currently employed.
a. for new employees in supervisory or non supervisory positions, the training must be conducted at time of hire or within 6 months of hire
b. for employees entering a new, supervisorial role, the training must be conducted within 6 months of their new role
c. for temporary, seasonal or employees hired to work less than 6 months, the training must be conducted within 30 days of hire or 100 hours worked, whichever occurs first.

4. Training for both the minimum 2 hour training for supervisors and the minimum 1 hour training for non-supervisory employees must continue every 2 years, thereafter.

5. Post-training documentation must be retained for 10 years, irrespective of the employee’s employment status with the company.

6. The bill also requires DFEH (dept. of fair employment and housing) to develop or obtain and post 1hr and 2hr online courses. An employer will have the option to conduct online training or classroom setting training.

7. All employers must make sure that their sexual harassment policy is in line with the current policy revision of 04/01/2016.

8. The new sexual harassment policy requirements which went into effect on 04/01/16 in part require that you discuss your policy at time of hire and or during a new hire orientation.

9. Another requirement is that you provide each employee with a copy of your policy with an acknowledgement form for them to sign stating that they have received, read and understand your policy.

10. An often overlooked regulation that took effect in 2018 requires that employers display a poster regarding transgender rights prepared by the California Department of Fair Employment and Housing.Below is a link to more details of SB 1343:

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB1343

If you have any questions, please do not hesitate to contact us.

 

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 skelly@tolmanandwiker.com.

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Kate

THE CALIFORNIAN 2018 Q3 – FEELING THAT CANNABIS HIGH

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FEELING THAT CANNABIS HIGH

by Stephan P. Hyun, Esq.

 

Starting on January 1, 2018, cannabis-related business activity became legalized in California, resulting in a lot of questions about the opportunities that have now become presented.  We as legal counsel often get asked:  Should I do business with a cannabis company?  What should I look out for?  How do I protect myself?  After all, this legalization affects both the licensed cannabis businesses themselves as well as the businesses who do business with them.

Here are important issues that we frequently deal with in protecting our clients who want to start doing business with a cannabis company.

1) Typically in contracts, there are provisions that say how the agreement will be governed and interpreted, as well as where any claims can be brought.  Having these provisions properly drafted can be ‘life-savers’ because while cannabis is legal in California, it is not legal federal-wide.  Also since California has enacted additional protections to ensure that the contract can be enforced under California law, adding certain clauses and language in your contract can allow California courts to determine that your contract is valid and enforceable.  This will help you in instances when the cannabis business your dealing with is not upholding their end of the bargain.

2) We advise our clients to put into the agreement ways in which you can terminate or suspend your services immediately without any notice.  When advising our clients and drafting their contracts, we take into account the possibility of the federal government investigating or prosecuting cannabis activity even in states where it’s ‘legal’.

3) Our firm has negotiated key provisions to be incorporated into cannabis security service contracts.  One of the provisions that we insist be carved out is about when the cannabis business will defend you and cover your losses if the federal government comes after you for being seen as facilitating/assisting a cannabis business.

4) In the agreements we have worked on, we want to ensure our clients are protected by eliminating consequential damages.  Consequential damages are damages that go beyond the contract itself and flow from some type of failure in adhering to the contract.  Consequential damages in a cannabis-related situation would be the loss of the cannabis product that may have been stolen, or the cannabis company’s lost profits as a result of the security officer failing to show up at the dispensary on time.  For our clients, we advise them to limit their exposure, and draft contracts to meet that end.

5) Because many banks do not want to deal with cannabis businesses, cannabis businesses frequently pay in cash.  We counsel our clients to be wary of the temptation to be paid in cash.  By accepting cash, you could be accused of money laundering by the federal government.  Further, federal prosecutors may be suspicious that you are not simply a security services provider, but rather a pawn in the cannabis company’s scheme to hide where the money is truly coming from.  Certainly, this is unwanted attention for your business.

Recommendation:  We recommend that you get ahead of the ball and be proactive in preparing separate cannabis security service agreements, different from your standard contracts.  That way you lead in the negotiations for your services versus the other way around.  By understanding the intricacies and interplay between federal and state cannabis law, you will be able to fully capture this new opportunity and better protect yourself from this emerging cannabis high.

 

Stephan P. Hyun is an associate attorney at Bradley & Gmelich LLP, where he represents clients in a variety of business litigation and general liability matters, with a focus on providing legal counsel in business transactions and contracts, as well as business formation/development.  His practice also extends to handling licensing and compliance issues for both private security and cannabis industries.  He recently presented on the topic of Cannabis in California at the CALSAGA conference.  shyun@bglawyers.com  /  818-243-5200.

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Kate

The Californian 2018 Q4 – PREPARING FOR YOUR BSIS AUDIT

Bradley & Gmelich LLP’s Legal Corner

            In this issue, we address a couple of hot topics for Private Patrol Operators (PPOs).  Both come from our firm’s Private Security Business and Licensing Team.  The first is how to lawfully take advantage of the legalization of cannabis in California in providing security services.  The second addresses getting ready for routine audits of records from BSIS (which they affectionately call “inspections.”)  Our goal is to assist you in figuring out the maze of rules, statutes, regulations and case law that can keep you out of trouble and in lawful compliance.  Both are areas that our clients are frequently calling us about, and we want to share some best quick assistance.

Preparing For Your BSIS Audit

by Barry Bradley, Esq.

So, you received a letter from the Bureau of Security and Investigative Services advising that they will be conducting “a routine inspection” of your documents.  It should take no more than two hours (on the average) and the meeting should include the owner(s), executive principals and/or possibly administrative staff “to assess and discuss key aspects of your daily operations” as a PPO.

ALARMS should be going off for you!  There is nothing routine about this.  In every instance where our clients have contacted us, they have been out of compliance.  This, despite their best intentions.  The opportunity to fix your records before you are audited could mean the difference between no citation at all, versus an administrative fine, a cease and desist order, and potential suspension or revocation of your PPO license.  This all becomes very public, too. Make no mistake about it: BSIS is here to regulate, not to collaborate.

Areas Of Concern:

As a PPO licensee, you have obligations that will require you to address various areas:

PPO Records, Vehicles and Uniforms:

  • Are your PPO license and all branch licenses properly displayed.
  • Are your records kept at your principle place of business – as recorded with the Bureau?
  • Are your current badges and patches in conformity with the original BSIS approval?
  • Are your current badges, patches and insignias in compliance with the Private Security Services Act?
  • Are your Certificates of Insurance for both workers compensation and for General Liability in compliance with Business & Professions Code 7582.39 as well as the California Code of Regulations?
  • Do your advertisements display your PPO number? This might include websites, social media, vehicles, business cards and brochures.
  • Is your business structure in compliance with statutes?
  • Do your business records match the Secretary of State records, as well as BSIS records?
  • Are your patrol vehicles in compliance with the Vehicle Code and the B&P Code regarding their light bars and decals?
  • Are your uniforms in compliance with Business & Professions Code section 7582.26?

Employee Records:

  • Do you maintain the name, address, commencing date of employment, position, and date of termination of each employee in compliance with the Code?
  • Do you maintain current guard card and firearm qualification permit information?
  • Personnel Files: do they contain guard card information, training, and required certifications? (This may include pepper spray and baton permits, as well.)
  • Do you have proper credentials for your off-duty Peace Officers, including a letter from their agency?

Weapons:

  • Do you maintain the required log for all weapons used on duty, including firearms and batons?

Training Certificates and Records :

  • Do you have Certificates of Completion for each course or series of courses for each and every security guard?
  • Do your Certificates contain the required language and information?
  • Do you maintain proof of completion for the Powers to Arrest training for all armed
  • Do you maintain proof of completion of the 32 hours of security guard skills training for all guards. (16 in 30 days / 16 in 6 months) and continuing annual training (8 hours)?

RECOMMENDATION: This list is by no means exhaustive.  We recommend a quick legal review well before your audit date.  There will always be blind spots – some significant and some minor.  Our goal, and yours, should be to become compliant (and hopefully before your “routine inspection” by the Bureau).

 

CONTINUE READING THIS EDITION OF THE CALIFORNIAN

Barry A. Bradley is the Managing Partner of Bradley & Gmelich LLP located in Glendale, California, where he heads up the firm’s Private Security Team and oversees the Employment and Business Teams at the firm.  A former Deputy District Attorney, Barry’s practice concentrates on representing business owners in employment, business and licensing issues, as well as defending litigated cases involving negligent security, employment and business related issues.  The firm acts as general counsel for many security companies in California.  Barry is the Legal Advisor to CALSAGA.

He has been conferred an AV-Preeminent Peer Rating by Martindale Hubbell, the highest rating attainable, and has been named a Southern California Super Lawyer for the past 14 consecutive years in the area of Business Litigation.  Barry is also the recipient of CALSAGA’s Security Professional Lifetime Achievement Award. bbradley@bglawyers.com  818-243-5200.

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Kate

THE CALIFORNIAN 2018 Q3 – 5 SMART KPIs FOR YOUR SECURITY OPERATIONS

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5 SMART KPIs FOR YOUR SECURITY OPERATIONS

Mark Folmer, CPP,  TrackTik

This is a no-brainer: Why does a client prefer to work with a security services provider that can measure their own performance?

Because those numbers give your client the peace of mind that comes with knowing their business has been secured in the way agreed to.

So naturally, as an owner or manager of a professional security service solutions provider, you want to have key performance indicators (KPIs) for your business in order to measure performance and efficiency.

 

Choose your KPIs with care

checklistNow KPIs come in a slew of varieties. Today, let’s  focus on those related to your field service operation. So let us assume that the fact-finding questions you ask about your client’s needs, assets, risk profile, etc., lead you to this conclusion: Onsite guards and mobile guard patrols are part of a cost-effective solution to the client’s situation.

Being slightly obsessed (your business or life partner uses other words) with efficiency, you understand the value of adopting a Computer Assisted Dispatch (CAD) solution: It ensures your field security patrols and responses are coordinated as efficiently as possible.

If you are forward thinking, you have linked your CAD solution to a security workforce management platform (that also includes a security guard tour system). Having this software allows you to fully automate your KPIs and also drive up field service business by offering data-supported Service Level Agreements (SLA) to your client.

Since you have taken the time to invest in the best training and equipment for your mobile teams, now you want to know how well they are doing. Consider these five smart KPIs for your field operations:

 

1. Completion Rate

Having spent time with your client analyzing security requirements, your ultimate goal is to achieve 100% of the site visits promised.
That number means that the client is receiving what they want and you can invoice all that has been agreed to.

2. Response Time

Measuring response time is the ultimate efficiency measure. So you want to respond as quickly as possible. It goes without saying that responding within the agreed-to response time is critical.

3. Overtime

You set your staffing levels based on the anticipated volume of calls and service delivery. That said, you want to minimize the unbillable overtime incurred by shared service units in order to be profitable and get a precise view of your productivity.

4. First-Time Fix Rate

By equipping mobile staff with all the information they need to properly access and respond to a site, you are driving first-time fix rates. Limiting the need to send additional or multiple units means you are more efficient.
Providing all the information your staff needs means that they are more accurate, can take appropriate action while onsite and can provide the client with a detailed incident or activity report.

5. Client Satisfaction

Have you ever had a client ask the operations center, “When will the response unit be onsite?” If your system is properly automated, you will be able to answer that question very easily, and support your client’s peace of mind.
Other items that can propel client satisfaction include: accurate invoices, incident reports sent to the right people and reports that accurately and richly provide details of any incident.

 

Stick to SMART KPIs

clockIf you wish to identify other KPIs specific to your business, ensure that the objectives are SMART (Specific, Measurable, Attainable, Relevant and Time-sensitive). Keep in mind that less is more. Having too many KPIs can be difficult to manage and lead to more confusion.

The items in the list above have focused on client and business owner satisfaction. It is worth mentioning that fair and clear KPIs can also motivate staff. In fact, using KPIs to align staff performance with business success is an alternate way for driving team performance and engagement.

Building your business based on clear and measurable performance indicators will drive client satisfaction, employee performance and build up your business’ reputation.

Mark Folmer, CPP, MsyI
Vice President, Security Industry
mark@tracktik.com
Twitter: @markfolmer

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Kate

THE CALIFORNIAN 2018 Q3 – CHANGE IS HERE

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CHANGE IS HERE

Steve Reinharz, President, Robotic Assistance Devices, Inc.

‘Change’ is one of the most overused words and concepts in most every industry. It gets people’s attention; it clicks and is therefore a powerful word for promoters to use. People generally are fearful of change because it challenges the stability that so many seek.

Change is opportunity and risk. Opportunity of being part of the ‘next big thing’ and risk that if you miss out it could be catastrophic. And although it’s an overused word I’m going to use it here: Our guarding industry is finally being changed by emerging technologies.

Historically we haven’t had much ‘real’ change in guarding because of the nature of guarding itself. Since the ‘sell’ of guarding is a human at a location(s) there has been little ability to innovate. Instead, much of the industry has been trading a similar commodity service and there’s been few opportunities to do anything other than compete on price in a race to the bottom. Naturally there are many exceptions; I’m simply talking about the part of the market with these characteristics.

But finally, for better or for worse, real change is here and we are going to have separation between adopters and resistors. And as always the adopters will prevail. Adopters can be characterized as more forward-thinking, risk-taking and engaged than resistors.

A parallel example is what happened in security integration industry in the late 90s. DVRs and IP based solutions started to emerge. Adopters thrived and resistors struggled. Same thing for many industries that had significant technologies introduced.

For guarding the revolutionizing technology is called ‘robots’. I write it like that because until the technology is perfected and given a real name we’ll call them ‘robots’. Someone once told me that ‘a robot is a robot until it’s called a washing machine’ which illustrates the point that immature technology gets a unique name and industry once it proves itself. But it will get better and it will get better faster.

Today’s rolling robotic solutions are far from perfect and in many cases have questionable usefulness but let this be notice that the technology is rapidly improving and the change is here today. Stationary artificial intelligence solutions are here today and proving themselves incredibly useful. In five years I expect this industry’s service offerings to be considerably more complex, lower cost, higher profit and better performing.

Change will bring opportunity and risk. Early adopters are noticing, learning more and experimenting with these new technologies. They’ll be the winners from this period of significant change that has started.

 

Steve Reinharz is the founder and President of Robotic Assistance Devices (RAD). A proven, seasoned leader in the physical security industry with 20+ years of experience holding various roles in multiple disciplines, Mr. Reinharz has led RAD to create and launch a successful line of artificial intelligence powered solutions specific for the guarding and concierge industries.

Mr. Reinharz’s experience is multi-faceted in that he’s been an end user, created and managed his own security integration firm and held various other industry roles. Mr. Reinharz speaks and works panels at ISC East and West and ASIS.

‘Force-multiplication’ has been the hallmark of Mr. Reinharz’ career. Specifically using technology to improve client security. Mr. Reinharz credits almost two years of work performed with the LAPD as the basis for many of the technological innovations he has launched.

Mr. Reinharz has called Orange County, California home since 1995 but grew up in Montreal and Toronto. He earned a dual-BS  in Political Science and Commercial Studies and currently resides in San Juan Capistrano, CA with his wife and children.

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