In June 2013, a California jury awarded $55 million to a teenager shot by a gang member at an apartment complex after a security officer failed to break up a gang party. The teenager, who was permanently disabled by the shooting, sued the officer’s security firm for damages, contending the officer did not warn residents of danger.
Just a month later, a California house painter was awarded $58 million after a beating by a security officer at a bar left him disfigured, disabled and unable to speak. The security officer was allegedly untrained and unlicensed, but was hired by a security firm and the bar. This settlement was one of the largest in California history.
These are very different cases, but with similar outcomes – large jury awards stemming from security officers’ apparent negligence or violence. Cases with settlements of this magnitude are not yet common, but they are on the rise. Just one large settlement has the potential to put a security firm out of business and damage the reputation of their clients. To prevent the worst effects of these lawsuits, enterprise security executives need to examine hiring practices, contract wording and insurance coverage.
The Importance of Security Officer Training
Regardless of a jury settlement outcome, lawsuits and their resulting publicity leave a stigma and often result in loss of business, not to mention difficulty finding insurance coverage. A security executive’s primary strategy should be to prevent lawsuits from happening, so hiring practices and vetting of security firm partners are the first defense.
All security officers must be subjected to criminal background and employment history checks. When seeking to work with a security firm, learn about their hiring processes before signing a contract.
But training is just as important as background checks. If a security officer does not have training to work in your particular industry, then she or he might not know how to react appropriately to an incident. Such “situational training” prepares security officers for the risks inherent to your industry.
Additionally, training in litigation awareness and proper documentation can keep settlements from ballooning. Litigation awareness ensures a security officer has an understanding of how an incident may later play out in lawsuits, while proper documentation is a crucial defense against bogus lawsuits.
When contracting with a security provider or firm, determine their areas of expertise and ask them if they have experience in your industry. Ensure they have a strong internal training program, but also have your own training protocol and standards.
Reducing Liability and Securing Proper Insurance
Security officer training is one factor to consider when contracting with a security firm, but you should be careful about the contracts themselves, too. They become a venue for either a company or a security firm to push liability onto one another – a strategy that leaves everyone insufficiently protected, particularly in multimillion-dollar jury award cases.
Ensure contracts have a sufficient “hold harmless” agreement, which means one party agrees to hold the other party free from responsibility for any liability or damage that may arise. Insurance agents and brokers are helpful when reviewing contracts for liability language. Also, in order to eliminate ambiguity about the responsibilities of the security officers, contracts should include post orders, which clearly outline the specific duties of the security officer firm.
But even if security executives are careful about who they hire, and even if security officers are well trained and behave professionally, companies and security firms are still at risk for massive claims. It is important to understand that security officers and the enterprises that hire them do not need to have done anything actively violent or harmful to be held liable for a customer’s or visitor’s injuries.
For example, in a recent case, two boys pushed a shopping cart off of a pedestrian walkway and injured a woman walking below. The woman is suing the adjacent mall complex for negligence, claiming they failed to provide adequate security – though they provided security cameras and there was security in stores near the walkway.
Though we often read about lawsuits like this in the newspaper, we usually do not hear about what happens when the trial is over. The truth should be disconcerting for security executives: depending on whether or not a company or security firm’s professional liability coverage had high enough limits or if they had policy gaps, the defendant could go out of
Since we live in a litigious society, the right security officer liability insurance coverage is the best defense against large jury awards. Many security insurance policies have limits of only $1 million, and start-up security firms often have the state minimum insurance coverage, which is insufficient in light of these large awards. Security firms need to have limits high enough to deal with large jury awards, and, if possible, commercial excess and umbrella coverage to cover any policy gaps.
If your company is not prepared for the possibility of large jury settlements, now is the time to fortify security practices. Many security executives are familiar with ways to prevent lawsuits, such as hiring responsible officers and maintaining safe environments. But these lawsuits cannot always be prevented; it’s cliché to say, but accidents do happen. With carefully worded contracts, responsible security firm partners and the right insurance coverage, your company will be best able to survive a multimillion-dollar settlement.
About the Author:
Tory Brownyard is president of Brownyard Group, a program administrator that pioneered liability insurance for security officers firms more than 60 years ago.