The Essentials of Security Guard Service Agreements

An Overview of Security Guard Agreements

As the name suggests, a security guard service agreement is used to contract for the services of a security guard. The term refers to a written contract between the client and the guard services, and it will usually take the form of one of two types. Some companies will provide a standard contract that may be used for all contracts, while others may write a new agreement for each specific project. A security guard service agreement should include the following elements: 1. A provision describing the parties involved in the agreement. For example, the agreement may state that "XYZ Security Services" is agreeing to provide guard services to "ABC Company." 2. A provision describing the parties’ responsibilities. The agreement should designate who is responsible for doing what, such as providing the guards, compensating the guards, providing a workspace for the guards, or arranging for the guards to have transportation . 3. A provision describing the duration of the contract between the parties. The parties may agree to provide security at an event on a certain date for a certain period of time, or they may agree to work together for a period of time, such as six months or a year. 4. A provision describing how services may be terminated. A contract does not have to be terminated due to a breach or failure to hold up one of the terms. It may be terminated according to the rules the parties outline in the contract, such as when work is complete or after two weeks’ notice. When considering a guard service agreement, the parties should also analyze whether it would be beneficial to include terms for remedies if a party breaches or another type of termination clause.

Crucial Aspects of a Security Service Agreement

The first key is the "Services to be Provided" which should be a straightforward description of what the guards are going to do. Things to keep in mind as you are drafting this section are: (i) are the guards working under the direct guidance of a supervisor, (ii) is there supervision over the guards (iii) is there training required and if so is that paid for by the Company or the Security Company and (iv) are there types of services that will not be provided that should be noted. For example, if a security guard is not permitted to search bags or purses, this should be set out in the agreement.
While the length of time for the assignment is generally a matter of agreement between the parties, depending on the type of business, it may be desirable to have a provision in the contract whereby the agreement can be terminated upon less than sufficient notice. In that way the employer is not held to an agreement to retain the guards at a time when they may no longer be needed.
Pricing and additional charges are often matters that come into play that affect the bottom line. If a contractual provision is in place that sets out clearly how the rates and fees are calculated and what charges apply in the event of overtime or other special circumstances, there should be less risk of unexpected costs.
Without a confidentiality provision, there is a risk that confidential information that is acquired in the course of providing services may be disclosed directly or indirectly to competitors. For this reason it is desirable to have a broadly worded nondisclosure agreement that prohibits the security company’s representatives from directly or indirectly revealing key information that may include: the identity of the clients, who the employees are, where they work and what they do. This is particularly true when security companies provide security in a competitive field. The identity of the client can be highly protected if it is possible to keep the scope of services general without revealing the company’s key interests. Where the parties are in a highly competitive field, they may elect to also include a provision that prohibits the security company from utilizing its contacts and knowledge of the client’s organization in its own business.

How to Create a Solid Contract with a Security Guard

When writing a security guard service agreement, there are several things to keep in mind. Although the agreement can be modeled after other contracts and general outlines, security guard companies need to customize the language within their agreements to accommodate specific client needs. In doing so, it is crucial that the contract remain within the bounds of the law. Drafting an effective security guard service agreement can go a long way in helping to protect against a future liability lawsuit.
For instance, by defining all terms used in the contract, both parties can be assured of what is expected of them. Additionally, having clients sign a contract detailing the limits of liability for your security guards can insulate your company from liability. In doing so, it is important to note the value of the property and the valuables that are going to be covered under the contract. If the property is very valuable, it is important that the client acknowledge that their assets are worth more than the value defined in the contract. This will prevent a client from claiming that their assets were worth more than the specified amount when filing claims in hopes of being compensated for the difference.
It is also important that the defined limits of liability be stated in any area of the contract dealing with transport or movement of property from one location to another. When customizing the contract to meet specific needs of the client, it is essential to redefine responsibility for liability throughout the contract. In defining the liability of your security guards, take care to limit your company liability to the regular scope of the security guard’s duties. That is, if your security guard is assigned to a particular post, make sure to specify that the guard should be deemed liable for anything that happens on the post, and not responsible for damages that may occur outside of the post.
When customizing security guard contracts, most clients appreciate the opportunity to designate timeframes for the original contract as well as periods for renewal or termination of the guard’s authority. Allowing clients this opportunity is a great way to strengthen your business relationship while also assuring clients that they will be able to cancel services without penalty if they feel that it is necessary. In fact, in many cases you may find that clients work with you rather than look for another security guard company because they feel secure in knowing that you respect their concerns.
Taking the time to define the rights and responsibilities of each party will help to foster good relationships between your security guard company and your clients. In addition, making clients aware of their rights and responsibilities is a great way to offer peace of mind to both the client and your security guards. By doing so, you will contribute to building a satisfied customer base that will help your security guard company to maintain its reputation as a reliable provider of security guard service.

Security Provider Roles and Responsibilities

An agreement for security officer service usually sets forth four different roles and responsibilities between the parties. There are the roles and responsibilities of the provider of the service (the "Security Company"), the purchaser of the service (the "Client" or "Customer"), the officers who are contracted to perform the service (the "Security Officers") and the employer for whom the officers work (the "Employer"). The following is a discussion of these respective roles and responsibilities in the context of common contractual terms.
The Security Officer contract with the Employer typically specifies that he or she will serve "solely as an independent contractor." This is to confirm that the Security Officers are not employees of the Security Company, but rather are employed by a separate entity. The separate entity is often given a name similar to the Security Company with a different suffix (i.e., Corp., Inc., LLC, etc.). The business may also be identified elsewhere in the agreement as an "Employer" or "Contractor" but will not be specified using the same name as the Security Company. The contract should also include compensation terms to specify that the Security Officers Contract with the Employer pursuant to a "Collective Bargaining Agreement" or "CBA" (if applicable), and in accordance with the terms of any applicable federal, state and/or local wage and labor laws. Without more, the inclusion of this term in the contract does not require that Security Officers be paid "union" rates but that they be paid fairly. When contracts include this type of language, many clients and contractors assume that the Security Company pays the Officers in accordance with the CBA. That assumption is often wrong. It is very common for the CBA between the Client’s Employer and the union to explicitly set forth rights to payment (including prevailing wage set-offs) for service subcontractors. However, the CBA often only binds the Client’s Employer, unless it is incorporated into the Security Officer’s contract with his or her direct employer. Many employers and customers assume that payment to the Security Company is in full satisfaction of all Service Provider obligations to the Officers, except for provisions guaranteeing overtime and benefits. These assumptions are sometimes unfulfilled.
The Security Company’s role is typically to provide officers, uniforms, schedules, supervisors and, importantly, insurance coverage. The Security Company is also responsible to provide all tooling, welfare and training necessary for its Officers to perform the security service. But who is responsible for training if the Client wants a different level of competence than what is required by the CBA? What if the security service is provided without a CBA?
Security Companies sometimes prefer to accept extra pay for officers to obtain the required training, but many do so by arranging with third party trainers who then charge extra than what the Officers pay normally pay, or simply pushing the cost to obtain the extra training onto the officers through a payroll deduction, when desired. Client preferences, industry practices and the local labor market can also influence the result. Also, the desire or need for additional or specific training may not be addressed in an officer’s contract with the Employer or even be clear to the parties until after the officers have been assigned to work. This liability for training can be negotiated, but this is the exception rather than the rule.
Sometimes, the Security Company will lease trained officers to other Security Businesses as these services are not performed by employees of the former but rather by persons who have been trained and hired by the latter Security Business. During the lease, the Officers work for the particular Business to which they have been leased, but also remain as employees of his/her original employer. In this way, the Clients of independent Security Businesses get to choose from a pool of already trained and experienced officers.
The Client’s primary responsibility is usually to procure the security service for its own benefit. The Client also has responsibility to pay for the service agreed to and the consequence of so doing is generally apparent. Other obligations, such as to post additional bond or insurance coverage, to pay certain extra mandatory taxes, and/or to specifically exclude liability for standards not required by law are sometimes spelled out in detail in the agreement. Not all Client responsibilities are so clear; some can even be burdensome. For example, Security Companies routinely request to see audit histories for security businesses, without regard to whether such histories are revealed to all customer-competitors. While Security Companies are obligated to meet certain insurance, bonding and financial thresholds, few, if any, routinely recognize similar obligations on their part to their customers. Consequently, clients sometimes perceive that at least negligent performance by an officer becomes their liability.

Legal Issues and Compliance in Guard Services

As with any services agreement, there are legal considerations to be addressed before entering into a security guard services agreement, particularly regarding liability, insurance requirements, and regulatory compliance. Toward the end of every security guard service agreement, an end-user may often see that the vendor "assumes all responsibility for any damages caused by its negligence and/or intentional subsequent acts or omissions that should have been performed."
Those provisions are important because, pursuant to the Occupational Safety and Health Administration, the customer and the vendor are considered "joint employers." This OSHA regulation is meant to hold the end-user accountable as well for unsafe work conditions. So if an end-user makes demands or cuts corners with regards to security, the customer shouldn’t be surprised if OSHA finds that the vendor’s work environment was unsafe. In addition to OSHA regulations, there are regulations that require the end-user to be compliant with laws applicable to the nature of its business. For example, if the end-user operates a high security facility, then it must meet certain regulations and standards, some of which may be state-mandated. But it’s not only the vendor’s responsibility to be in compliance with those standards. The end-user must also monitor the vendor’s compliance with governing laws and the terms of the contract. For example , some contractual terms permit on-site inspections so that the vendors’ records and responses to customer inquiries can be confirmed.
There are also insurance requirements. Reputable vendors will carry general commercial liability coverage, which protects the vendor from instances of negligence on the job. But in addition to general commercial liability coverage, end-users should ensure that the right endorsements are included on the policy. For example, ensuring that the vendor’s insurance policies contain an employment practices liability exclusion endorsement is a critical step to ensure coverage if the vendor is sued for harassment or discrimination claims. Additionally, end-users should require minimum amount of general liability coverage, both per occurrence and in the aggregate as well as providing the vendor with the opportunity to request an increase in the minimum. It is not uncommon for an end-user to demand a minimum of 2 million per occurrence and in the aggregate, but a vendor might counter that with 1 million per occurrence and in the aggregate. Another consideration involves an indemnification clause. End-user may consider adding a provision to the contract that indemnifies the end-user for instances where its negligence has been the cause of injury suffered by the vendor. Conversely, vendors should request an indemnity provision that protects its interests in defending against claims brought against both the end-user and the vendor, provided, however, that the claim is based in the vendor’s own negligence.

Typical Issues and Solutions When Dealing with Private Security

The implementation of security guard service agreements can be fraught with challenges, particularly when the obligations are not clearly understood. First, and foremost, there is a common misconception amongst security guard companies and clients that contractual requirements are set in stone and can be changed only by an executed amendment to the contract. The reality is that the parties can negotiate amendments to and/or waivers of the contract for any changes that they deem necessary. Security guard service providers must be prepared to discuss these matters openly and with a willingness to adjust as may be required. In fact, open communication amongst security guard contractors, the clients, and the officers can go a long way in preventing future disputes from arising.
The devil is in the details. For this reason, documenting everything is essential. The client should expect to be kept apprised of all communications, in writing, and logs that document all incidents that occur on site or here any trespassing, damage, or injury occur. Furthermore, such logs and records, along with written reports of incidents, should be retained for a period of seven years from the date they were created so that the information can be recalled if needed. Providing the client with copies of these records can demonstrate to the client that the provider is on top of things. Otherwise, a missed report could lead to misunderstandings of events or could imply that the other reports are incomplete or non-existent.
Clients and customers must be told that breaking equipment requires immediate attention and that the security company will fix or replace broken equipment as soon as possible. The officer should also alert the security company as to any lapse in service, such as a malfunctioning telephone that is inhibiting his ability to communicate with dispatch. If the officer fails to notify the security company of the lapse in service, it may be considered to have been waived. This can be crucial if the client has an emergency and no one is able to reach the officer.
In order to combat issues that might otherwise precipitate premature contract termination, security companies should establish and maintain a good working relationship with the client. Frequent communication is an important aspect of strengthening this relationship. At the same time, both the client and the guard officers should be treated as valued customers who are deserving of prompt and courteous service. The provider must be prepared to respond to both customer and client needs. This is an integral element of success in this industry.

Real-Life Success Stories of Private Security Firm Agreements

In the world of security guard service agreements, positive relationships between customers and their guards can lead to transformative business outcomes and can foster long-term collaborations. Successful security services are built on the cornerstones of clear communication, defined expectations, and mechanisms to address issues as they arise.
Demar Security is intimately familiar with the good, bad, and the ugly of security guard service agreements and has seen firsthand just how much they can differ from one situation to another. With over 20 years in the industry, here are just a few examples of how security guard service agreements have come through for our clients:
A retail sales company came to us looking to fill a gap. At the time of our engagement, they had a group of "certified" officers that were providing over 60 hours of weekly service at two of their stores. However, the truth was that these officers weren’t really guarding the property. They were there for "moral support" and were not using their services to ensure that their assets were safe and secure.
We met with them and put together an agreement that would help meet their needs while still addressing the fact that they could not afford (or justify) a 24 hour customized solution. They wanted to dispense their current list of "non-required" officers within 30 days and were willing to pay them off with the current agreement and start fresh. They brought us in and we streamlined their position. We ended up with a handful of officers that met the new agreement and could provide both a visible deterrent and services that would keep their property from being damaged or robbed.
A large law firm found themselves in a situation where their previous security service agreement was expiring. Their officers were situated to report to both the front desk as well as another location in the same building. The issue that they ran into was that because the officers did not have a full set of responsibilities, they were tasked with additional responsibilities that were way above their agreed purview on the existing contract. As a result, the law firm was overpaying for additional officers, but not getting value for the additional money they were spending.
When Demar Security is introduced into this kind of situation, we look to renegotiate a new contract that fits the needs of both parties while also maintaining profitability. Here, we again placed the priority on the core duties of the officer such as preventing unauthorized persons from entering the premises and watching out for criminal activity. We recommended eliminating the need for specific officers to do unauthorized rounds and other security(rosa) related activity. As a result, we were able to provide a streamlined approach in which both demar and the law firm were happy with the outcome of our new security guard service agreement.
This last case speaks to a situation we see daily. Many companies feel as though hiring security officers is a matter of price and not taking the time to establish a long-term relationship with the guards that they bring on site.
We had a restaurant operator who reached out to us for assistance. They had a current provider but were unhappy with their services. Unfortunately, the operator allowed price to dictate their decision and was unable to develop a working relationship with their guards. They spent too much of their time with various actions trying to resolve issues rather than developing a healthy relationship with their officers.
Unfortunately, this caused the officer to leave. The restaurant operator now has a new provider but still has significant turnover because they still do not address the underlying issues at play. They rely solely on the ability to keep a guard and rely on price to do so. If they took the time to establish a good working relationship with their security officers and negotiated a security guard service agreement that provided value, then they would likely not encounter the issues that they face today. Our cautionary tale for others: never forget that a good working relationship with your security guard service company and the individuals who staff your accounts translates into better security for your company as a whole.

The Future of Guard Service Agreements

As technology continues to advance, so too do the methods by which these advancements will be incorporated into security guard service agreements. It is expected that a form of digital contract will emerge and that for the first time in many years, there will be an increase in the use of integrated security solutions. Whereas single-source or sole supplier services have predominated the security guard services market for several years, integrated security services are now in higher demand. These new IT systems, software packages, or cloud-based applications provide dedicated, tailored consulting services and offer customers comprehensive solution sets from one source that consist of multiple modules to address all possible physical security needs. A recent trend also involves the use of technology that contains built-in artificial intelligence. These A.I. systems, designed for the most part to defend against cybercrimes , are believed to have uses in other areas of cybersecurity as well as individual and organizational security. The future may see those systems expanded in order to address and defeat other kinds of threats to physical and digital security, and it will be interesting to see how this could affect the central role of human security guards. Even with these and other new technologies emerging, there remains significant challenges in the security services market generally. For example, the market for global security services differs significantly in size from the size of each country’s domestic market for security services. Considering the critical role that security plays in all businesses, as demographic trends and security challenges place more demands on security resources than ever before, there are plenty of opportunities for the private security industry to keep up with, and thrive under, the pressures of changing and expanding demands for security.