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 (tbrownyard@brownyard.com), a program administrator that has been a leader in meeting the insurance needs of the security industry for 75 years.