Security Guard Contracts: Finding Your Inner Lawyer

Reviewing security guard contracts is tedious, but necessary

1. Check the agencyâ¬"s license. The contract guard agency should always provide you a copy of its license to conduct business. Contact the appropriate state agency to validate the license. You could also secure a Dun & Bradstreet report through your credit/finance department to ensure the solvency of the organization, or take other steps consistent with your companyâ¬"s policy for vetting new vendors.

2. Request a certificate of liability insurance. It is important that you know, understand and communicate your companyâ¬"s requirements for all contractors with respect to general liability, excess liability, workersâ¬" compensation and employersâ¬" liability. For example, a good policy is to have your vendor include you as an additional insured on its policy, which allows you to file a claim directly against the vendorâ¬"s insurance policy. Your risk management team should provide these requirements to you. They must be nonnegotiable.

3. Include a defense and indemnification clause. Also known as â¬Shold harmlessâ¬ language, this protects your company from lawsuits and claims generated because of the negligence of a guard company. For example, take the scenario above, where a guard company employee illegally detains a customer. Odds are good that that customer is going to file a lawsuit, and you can be sure he will name your company as a defendant. The argument that your company â¬Sdidnâ¬"t do anything wrongâ¬ will not matter. Without a written contract that contains â¬Shold harmlessâ¬ language, your company could waste money and countless hours defending itself from the claim.

The â¬Shold harmlessâ¬ clause prevents your company from having to defend and pay for claims where your company was not negligent. More specifically, this language does two things. First, the defense language ensures that the contract guard company picks up the legal defense cost you generate in defending your company from a claim caused by the negligence of the security guard. Second, the indemnification language ensures that the guard company is responsible for paying out any financial rewards due the injured party.

4. Require that the guards meet your standards. The guards assigned to your property should meet your basic background qualifications, and they must be required to provide physical evidence of a valid individual security guard license in those states mandating such licensing. In addition, it is recommended that you mandate timing (for example, quarterly or semiannually) for ongoing background checks and license verifications for longer-term contracts. Other checks, such as a national sex offenders check, can be considered when possible and depending on assignment.