THE BESTGUARD NEWSLETTER

Do In-House/Proprietary Security Guard Services Need Their Own Professional Liability Insurance?

Institutions – such as schools, colleges and universities; hospitals and other life-care facilities; research facilities; religious institutions; cultural institutions; etc. – often have their own proprietary security operations and in our opinion, these in-house security divisions, definitely need their own Professional Liability coverage!

Generally speaking, a Professional Liability exposure exists when SPECIFIC KNOWLEDGE, SKILL AND LICENSING are required to do a job. And Security Guards do fit the bill:

1. In most states, Security Guards must be specifically licensed;
2. In most states, those licenses require completion of a specific training program, including a specific curriculum and minimum number of training hours;
3. Many states also require specific, additional training to renew licenses;

So the Security Guards would clearly be deemed to have knowledge, skill and licenses not commonly possessed by members of the general public.

However, the need for the in-house security guard division to have its own specialty coverage can sometimes be difficult to explain to an insured.

 First, WHY would a University or School District need special coverage for its Security  Guards?

   The University or School District’s insurance program generally includes    Professional Liability coverage, BUT:

• The policy definition of “Professional Services” generally includes educational activities – but may not include Security Guard services.
• The policy definition of “Who Is An Insured” generally includes licensed professional staff such as teachers, school psychologists, guidance counselors, school nurses – but the intent is to cover educators – and the list may not include licensed Security Guards.

   In most cases, Professional Liability for Security Guards simply isn’t something that    was contemplated by the carrier writing the Educators’ Liability policy. Most    knowledgeable Insureds/Risk Managers (and their agents!) don’t want to jeopardize    coverage in a limited market segment with an exposure that the professional    liability carrier didn’t contemplate and doesn’t want to cover.

 Next, WHY would a Hospital or Nursing Home need coverage for their proprietary  guard service?

   The Hospital or Nursing Home’s insurance program generally includes Professional    Liability coverage, BUT:

• The policy definition of “Professional Services” generally includes medical services – but may not include Security Guard services.
• The policy definition of “Who Is An Insured” generally includes licensed professional medical staff such as physicians, psychiatrists, psychologists; radiologists; nurses; occupational, physical, and speech therapists; medical technicians, etc. – but the intent is to cover medical personnel – and the list may not include licensed Security Guards.

   In most cases, Professional Liability for Security Guards simply isn’t something that    was contemplated by medical malpractice carrier – and the medical malpractice    market is SO limited, most knowledgeable Insureds/Risk Managers (and their    agents!) don’t want to jeopardize that coverage with an exposure that the    malpractice carrier didn’t contemplate and doesn’t want to cover.

What are some of the unique exposures of the in-house security guard operation, that aren’t covered by standard CGL policies?

1. Failure to provide adequate security (ie, the guard failed to act and something happened)
2. Use of excessive force or unreasonable force (ie, alleged assault & battery by the guard)
3. Improper use of firearms (ie, the guard shoots someone)
4. Other Negligence by guard (either a failure to act &/or an incorrect action)
5. Wrongful detention / false arrest / false imprisonment
6. Wrongful eviction
7. Theft of confidential information by a guard
8. Intentional, wrongful acts that could create Vicarious Liability exposures for the School District/employer (such as a criminal act by a guard; or use of unreasonable force by a guard)
   • For example: If a guard hits someone, shoots someone, molests a student or patient, etc. you can expect a claim will be filed against the guard and ALSO against the employer/Institution, alleging that the guard wasn’t properly screened / trained / supervised (etc.) and therefore, the employer/Institution is vicariously liable for the event and injury.

In most jurisdictions, the Guards need to be licensed. In many jurisdictions, the proprietary guard division or its employer needs to be licensed. In order to become licensed, proof of insurance generally must be provided to the State’s Licensing Division, which meets some specific requirements. Here are two examples:

In the State of New York, the applicable regulation is NY Consolidated Business Law Article 7A (§89-g.3.b.6) which reads as follows:

The Certificate of Insurance must SPECIFICALLY CONFIRM the following: “Coverage shall include false arrest or false imprisonment, malicious prosecution, libel, slander, and violation of right of privacy”

In the State of Wisconsin, Regulation # 2149 (6/06) Ch. 440.25 states:

• The comprehensive general liability policy must include coverage for bodily injury liability, property damage and personal injury.
• The policy must cover all licensed private detectives and private security personnel employed by the agency.
• If an agency permits anyone associated with it to carry a firearm in the course of duty, it must also have coverage for injury or damage resulting from the use of firearms.

Most states have similar requirements – and the policies covering most institutions that utilize in-house/ proprietary security guard operations simply won’t meet the stated requirements!

To summarize, schools, hospitals and other institutions that utilize in-house/proprietary security operations should check with their insurance professional to make sure that the unique liability exposures created by these operations are adequately covered by the institution’s existing insurance programs. If not, separate Professional Liability coverage needs to be obtained and Brownyard Programs has programs readily available to insure these in-house/proprietary security operations. Please don’t hesitate to call us for a quote.

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Police Use Texting for Crime Tips

Police Departments across the country are finding an increasing number of anonymous crime tips coming in through text messages. Earlier this month the Louisville Police Department became the newest addition to a growing number of cities utilizing this new technology. Citizens are able to send an anonymous text message through a third party server which scrambles the number before sending the contents to the police. The third party server then assigns a random code to the original number in case the police need to contact the sender for more information. The new software is helping police departments across the country to keep pace with new technology while continuing to increase the ways citizens can provide valuable safety information.

Source: USA Today

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Red Cross Alerts Public to Scam Targeting Military Families

Wednesday, June 11, 2008 — The Office of Investigations, Compliance and Ethics has been alerted to a scam targeting the families of military staff. A caller contacts a spouse or another family member of a military staff person and identifies himself/herself as a representative of the American Red Cross. The caller states the military staff person has been injured while on duty in Iraq and is being or will be air-lifted to Germany for treatment and care. The caller may ask for additional information about the military staff person; for example, date of birth or social security number. In a subsequent call, the caller updates the family member and asks for a donation to the Red Cross to help cover the cost of the air-lift and medical care.

This is a scam using the Red Cross brand. American Red Cross representatives typically do not contact military members or military dependents when a service member has been injured or killed in action. Rather the service member’s Command or the casualty assistance branch of the respective Service contacts the primary next of kin when a service member has been injured or killed in action.

Military families are urged not to give out any personal information or money over the phone if contacted by unknown/unverified individuals, including confirmation that a family member is deployed. Should any military family member receive such a call, they are urged to report it to their local Family Readiness Group or Military Personnel Unit.

Source: www.redcross.org

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Lost Cameras 'Phone Home' to Catch Thieves

Alison DeLauzon thought the photos and home videos of her son were gone for good when she lost her digital camera while vacationing in Florida. What she didn’t account for was her camera “phoning home.” Equipped with a special Eye-Fi memory card with wireless Internet capability, DeLauzon's camera had not only automatically sent her holiday pictures to her computer, but had even uploaded photos of the assailants who swiped her equipment bag after she accidentally left it behind at a restaurant. As the two men passed by an unsecured wireless network, the factory installed settings of the Eye-Fi memory card sent pictures not only of DeLauzon’s son, but also of the culprits who stole her camera. The two men turned out to be employees of the restaurant where she first lost the phone. DeLauzon decided not to press charges, but in the end both men were fired and her camera was safely returned.

Learn more about Eye-Fi at: http://www.wired.com/gadgets/wireless/news/2007/11/eyefi

Source: www.reuters.com

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