How To Select A Security Company For Your Business

Due Diligence

Due diligence in a nut shell is doing your home work, what a reasonable person would do, to ensure that the Security Company you are about to hire is properly licensed, insured, and is able to perform the services you require.

This article relates directly to the State of California, but all States that I am aware of have similar licensing and insurance practices. Have companies submit a proposal of the services they offer and the costs. This should also include copies of their State licenses issued by the California Bureau of Security and Investigative Services BSIS), local business license and a statement of all insurance coverages required by law. Insurances range from general liability, errors and omissions, workers compensation, and vehicle insurances if they offer patrol services. Additionally, I would require a list of current and past employers as references. I would also want to see copies of their vehicle registrations.

Now that you have this information your are set to hire a company, NO NOT YET!!! You have only completed the first step, now you have to verify the information that you have received. It is actually very simple and can be done with in several hours. Checking the information can save you thousands or hundreds of thousands of dollars down the road, so take the time and do it right.

To check the Private Patrol Operators (PPO) license thru the State is very simple, google BSIS and go to the verify a license section. This will tell you if the license is currently active, the license number or PPO #, the name of the company the license is under, and the individual that actually holds the license.

To check insurances you simply call the insurance company and check to be sure that the Security Company has the proper insurances, in the proper amounts required by law, that they are current and that they are for armed or unarmed security officers. BSIS requires $500,000.00 for liabilities for property damages and for injury or death, however, the more coverage they have the better protected you are. Most companies today range from 1 to 5 Million in coverage for general liabilities and umbrella policies. In California there is vicarious liabilities that the employer of the security company could be faced with ( this is where you can get sued for actions of the security company and its employees).

Be sure and check vehicle registrations to insure that the vehicles are registered to the Security Company or to the owner of the company. Believe it or not some disreputable companies require their employees to use their personal vehicles and make them put the company logos on them. If that is the case odds are the employee has private vehicle insurance, which if they are involved in an accident while working for you the odds are pretty good that the employees insurance will refuse to pay since a business coverage should have been in place, and guess who the injured parties will go after next.

Now it is time to contact the references and find out how the security company served its prior employers. It is best to ask direct questions such as, did they meet your expectations, where their security officers neat, clean and presentable? Where they professional in their dealings with customers and employees? You get the idea, if you just asked if the company was good you usually get a short answer that really doesn't mean a lot. Always ask if they know of any other business that the Security Company worked for that they were aware of. Why ask this, sometimes security companies will only list satisfied customers. In fairness when ever I finish checking references I like to talk with the Security Company face to face, to get their side of any negative references.

Almost done, but just to do everything possible, even if it may cost a couple hundred dollars I would pay a Private Investigator to do a background check on the Security Company and the owner of the company, just to look for criminal records, liens, or any civil actions that may have been brought against the company/owner or that maybe pending.

NOTE: A review of BSIS records is not 100%, read their disclaimer which in a nut shell makes it almost useless. What ever BSIS shows follow up with a phone call to them and double check, make sure you document the date and time you called, who you spoke with and what was said.

Remember, pricing for security companies can be negotiated, and in most cases companies will give discounts for long term contracts. By doing a good job on your due diligence you can avoid a lot of problems down the road. Remember due diligence will not keep anyone from filing civil litigation against you, but it does give you a defence against losing a case in court.

Once you hire a company, check and make sure that they are doing what you want them to do. Also as the employer you can check Security Officers to verify that they are properly licensed as security officers, and properly licensed to carry firearms, batons, mace or any other weapons they may carry. All security officers are required to carry their licenses while working and a drivers license to verify their identity and as the employer you have the right to see them when you ask. If they don't have them on their person call the security company immediately as any security officer without those documents can not work. They may have left them at home, in their car or they may not be properly licensed.


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