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INSURANCE
The contract service should be able to provide written proof from the agent or carrier of the following coverages as a minimum and it is strongly suggested that the contract service be requested to include the client as an additional named insured on the relevant policies. This can usually be accomplished at a nominal cost to the contract service and can be handled so the client will be advised in the event of a policy lapse or cancellation.
Coverage should include comprehensive general liability--including independent contractors' coverage, if applicable. (This latter provides protection against liability arising out of operations for the named insured by any independent contractors.) I generally recommend two million dollars coverage, however, from time to time the markets change. Insurance industry crises are not uncommon events and in these situations many companies cannot purchase anything over a million. (Not because the price is prohibitive, simply because the excess coverage is not available at any price.)
Less than one million basic coverage is, in my opinion, inadequate for any security operation. Of course, the coverage may be layered. For instance, there may be a general liability policy in the amount of $300,000 with an additional $700,000 covered by an umbrella policy or a following form excess policy.
The client should determine the deductible amounts of these policies and be satisfied that they are logical for the exposure. (A one million dollar policy with a $300,000 deductible, for instance, would not be acceptable if the assets of the contract agency were only in the $25,000 range. However this deductible might be perfectly acceptable if the consumer is dealing with one of the national companies with solid assets.)
There should be an assault & battery endorsement with the policy. It is strongly recommended that the client read the actual policy terms in this area particularly. Not too long ago, one of the top selling insurance policies for security agencies had unsuitable restrictions in this endorsement. Basically it stated that coverage was not in effect unless the officer used reasonable force while assaulting and ,battering. I question whether there was, in fact, any coverage.
There should be a personal injury part which provides coverage against false arrest, detention or imprisonment, malicious prosecution, libel and slander, wrongful entry and other events related to invasion of privacy. This should be covered to full policy limits.
There should be a broad form property damage endorsement providing coverage for damage to 'property in the care, custody, or control of the insured. Each situation is different but often $100,000 limit is considered adequate.
There should be an errors and omissions endorsement which provides coverage for all errors and omissions for which the insured is held legally liable. This is similar to malpractice coverage, but is not always available in the fickle insurance market.
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