Insurance is where a lot of new security companies quietly underspend, then get caught — either the state won't issue the license without it, or the contract they just won requires more coverage than they carry. Both are avoidable if you understand what you actually need.
Here's the insurance a security company needs, why the state minimum is only a starting point, and how it varies by where you operate.
- General liability
- $100K–$1M+ minOften required to get licensed
- Workers' comp
- From 1st employeeRequired in almost every state
- Commercial auto
- If you run vehiclesFor patrol vehicles
- Surety bond
- Some statesPart of licensing where required
- What clients want
- $1M / $2M+Well above the state minimum
- Armed operations
- Higher limitsAnd specific coverage terms
The coverages a security company needs
General liability (the one that gets you licensed)
Commercial general liability covers bodily injury and property damage claims arising from your operations. It's the coverage most states require before they'll issue the company license — some set a statutory minimum, commonly $100,000 to $1,000,000 per occurrence.
For security work specifically, watch for coverage of the intentional torts that come with the job — false arrest, false imprisonment, assault-and-battery allegations. Some states require these named explicitly, and general business policies often exclude security work in the fine print. Use a carrier that writes guard services.
Workers' compensation (the biggest recurring cost)
Once you have employees, nearly every state requires workers' comp — usually from the first hire. Because guard work is a higher-risk class, the premium is often your single largest recurring insurance cost, larger than general liability. Budget for it from day one.
Commercial auto, and a surety bond where required
If you run patrol vehicles, you need commercial auto. And some states require a surety bond as part of licensing — a guarantee, not insurance, whose amount the state sets. Many states require no bond at all, so check yours before buying one.
How requirements vary by state
Two things change state to state:
- The general liability minimum for licensing — from about $100,000 to $1,000,000 per occurrence, and some states specify the exact intentional-tort coverages the policy must name.
- Whether a surety bond is required at all, and its amount.
Your state's exact figures are in its guide. The security agency license requirements by state hub links every one — for example California, Texas, Florida and New York, each of which sets its insurance and bond rules differently.
Your insurance checklist
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Bonus: lower your risk profile with better records
Insurers price on risk, and claims are cheaper to defend when you have proof. A guard operation that GPS-pins every patrol, timestamps every checkpoint and files incidents with photos in real time has contemporaneous evidence when a claim comes — which is exactly what limits a dispute. See how Safetrac captures it.
Final thoughts
Get insurance right in two moves: carry what your state requires to get licensed, and carry what your clients require to win contracts — which is almost always more. Add workers' comp from your first hire, check whether you need a bond, and use a carrier that actually covers security work.
Next, price the rest of your startup with how much it costs to start a security company, and confirm the full list in what licenses you need.