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S ecurity guard businesses are enjoying increased business, thanks to an improved economy and la growing demand for services. "The industry is recovering from the recent economic down- turn," explains Bruce Brownyard, president of Brownyard Programs, Ltd. "We're seeing staffing levels, payrolls and revenues rising."
But even as operating conditions improve, guard firms face a number of issues-some specific to their industry and others shared with the broader business community. Agents and brokers who understand these issues and their implica- tions can better serve existing security clients and attract new ones.
"A primary concern for security guard companies right now is the Affordable Care Act," says Karen Izzo, president of Izzo Insurance Services. "Many security companies don't have the profit margins to absorb the additional costs for health care."
She points out that some contracts between guard companies and their clients prevent the guard company from raising billing rates to cover additional costs. "Other contracts may provide the ability to pass through costs," Izzo notes, "but guard companies are afraid the increase may cause clients to shop for lower rates or reduce the num- ber of hours purchased."
Contracts continue to be a major area of concern for security guard firms. "When guard firms take on new cli- ents, they're anxious to sign the contract and close the deal as quickly as possible," explains Tory Brownyard, CPCU, president of Brownyard Group. "But they need to take a close look at what they're signing."
He adds, "They need to pay careful attention to the word- ing, especially regarding responsibilities in the case of an incident or a lawsuit. A lot of firms are signing contracts that are way too one-sided in favor of the clients they're protecting."
Several years ago, he recalls, an employee of a manu- facturing firm was driving a forklift recklessly and ran into and seriously injured a security guard. "By contract, the guard firm was responsible for claims involving the guard force; there was no wording that the guard firm had to be negligent," Tory Brownyard says. "It was a high six-figure claim that fell on the guard firm. Adding insult to injury, there was no coverage because the guard firm's policy only...