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
Shaun.Kelly@libertycompany.com
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.