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 35th 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.