January 8, 2024 • 14 mins
Are you ready to navigate the security guard insurance market? Prepare to arm yourself with the essential knowledge shared by industry specialists Vince Polese and Greg Zschiesche . In our latest episode, we tackle the shrinking pool of insurers, dissect the nuances of liability concerns that have come to the forefront with cases like the Surfside Condo collapse, and analyze the diverse risks associated with various security environments. This is a must-listen for understanding the complexities and challenges that security guard firms face in securing adequate insurance in today's marketplace.
Vince and Greg shed light on the labor dynamics within the security sector, emphasizing the growing presence of retirees and veterans in the field. They share valuable insights on establishing fair contracts and a meticulous vetting process that's critical for recruiting top-tier talent. Furthermore, we discuss how wholesalers like CRC Group can be a guiding light through these intricacies, underscoring the importance of fostering strong relationships and staying abreast of market trends. Whether you're an agent, a client, or simply intrigued by the inner workings of insurance for security firms, our discussion offers a wealth of knowledge that is sure to assist you in charting a course through these challenging times.
Visit REDYIndex.com for critical pricing analysis and a snapshot of the marketplace.
Do you want to take your career to the next level? Join #TeamCRC to get access to best-in-class tools, data, exclusive programs, and more! Send your resume to resumes@crcgroup.com today!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Scott Gordon (00:00):
Hello everyone.
Today, Amanda and I are joinedby Vince Polese, a senior
casualty broker and senior vicepresident with our Jericho, New
York office, and Greg Zschiesche, an associate casualty broker
with CRC Group's Houston, Texasoffice.
They're going to talk with ustoday about the challenges
around ensuring security guardfirms.
Amanda Knight (00:22):
This is the Placing you First podcast from
CRC Group.
Scott Gordon (00:26):
This podcast features news and insights from
a vast knowledge base of over5,100 associates who write more
than 35 billion in premiumannually.
Amanda Knight (00:35):
Plus, we give you the latest information on
what's happening at CRC.
This is the Placing you Firstpodcast.
Vince Polese (00:43):
And now the hosts of the podcast Amanda Knight and
Scott Gordon.
Scott Gordon (00:47):
Thanks for joining us guys, thanks for having us,
thank you for having us.
Amanda Knight (00:50):
You know I think this is the first time we've
ever broached this topic on thepodcast, and the companion piece
that we wrote to go with this,I'm pretty sure was the first
time we've really gone in depthon security guard firms.
So for those who maybe haven'tdug into that article yet, can
one or both of you sort of giveus the short version of what the
(01:12):
market looks like for securityguard firms right now?
Greg Zschiesche (01:16):
I would say in a nutshell that the state of the
security guard market is ashard as it's ever been.
A number of programs that havehistorically played into space
have either cut back limits, cutback capacity or exited the
space altogether.
We were noticing it seems likeeither monthly, weekly,
(01:38):
quarterly there are updatesrelative to carriers positions
in this space.
For example, I just found outearlier this week that a go to
excess market that has beenwriting lead access for us in
the space is changing theirposition, likely non renewing
their entire security guard bookfrom a lead access perspective,
(01:58):
and is really not interested inplaying in the space in a lead
position going forward.
So it's those types of changesthat just make the what's
already a difficult situationthat much more difficult.
You know, I think that with thebirth of a number of different
MGA's that have sprung up orpopped up over the course of the
past, you know, two years or soSome of those folks have
(02:22):
interest, many of them do not,and so, unlike many other
classes of business where you'veseen sort of seen this influx
of capacity that's come in,unfortunately that influx of
capacity just hasn't really beenavailable to insurers in this
space.
Vince Polese (02:37):
Yeah to add to Greg's commentary.
It's kind of we can go on andon and on about what the
marketplace is looking like, buttaking a view of the last 20
years, because we've beeninvolved with it in that time
period, it was a foregoneconclusion that you could get
any guard deal done in a program.
(02:57):
There was always a program thatwould fit the mold the auto,
the GL and the access.
When we were getting brought,when we were brought in on to
the deals more times, many werebrought into the access.
So fast forward 20 years, it'salmost as if there's a perfect
storm.
A lot of things have happenedin the marketplace that's just
caused a lot of these firms toexit out of the space.
(03:18):
They've been unprofitable forat least one or two lines of
business.
It could be casualty, it couldbe auto, it could be access, it
could be verdicts.
It's just a real challenge of amarketplace right now and
luckily for us, we've got someexpertise in the class and we're
starting to get a lot moreopportunities, as they've
presented themselves.
Scott Gordon (03:39):
Yeah now, one of the things that struck me as
kind of amazing about theSurfside Condo collapse a few
years ago was that the securityfirm ended up on the hook for
more than 500 million of the $1billion settlement.
That just blew my mind.
Is that a common thing forsecurity firms to be left
(03:59):
pulling the bag like that?
Vince Polese (04:02):
Not necessarily what happened.
So a lot of times what happenswith the guard space is, in fact
, when they are protecting aproperty such as this, they're
responsible for the safety ofthe people that are inside of it
.
I'm not necessarily sure whatthe allegations were at the end
of the day, but I think it mayhave been a part business
(04:24):
decision from the insured andcarers to pay the claim.
They felt that it was wordingthat they provided in their
policy, which was the carecustody control peril, so the
property was under their carecustody control, so to speak.
So there were allegations thatthey could have warned people to
evacuate and didn't.
(04:45):
But I think it was a businessdecision that all the carers
made to make this settlementhappen.
Now, if you look at some of thecarers that are offering
coverages right now, they areputting building collapse
coverages exclusions on it.
So there are a couple of MGU'sthat have actually put that on
it, which I thought was a littleheavy-handed, but they don't
(05:07):
want to necessarily bend thehook for building collapse.
The carer of the insured is ahuge insured, a multi-billion
dollar conglomerate, and theyhad the limits and, as a result
of them having limits, they madethe decision to do it, or the
carers made the decision to payit.
So not common practice, but inthis particular case they felt
(05:29):
it was within their duty to payit, so they did.
At least that's what I can tellfrom the article that was
provided, that was published.
Amanda Knight (05:36):
I mean, I think, even if that's a rare occurrence
, when I think about securityguard firms and the variety of
places you now find securityguards that maybe we didn't have
years ago, the different sortof establishments of all kinds,
it seems like the role can varypretty widely from one security
(05:57):
guard situation to another.
And in my mind you guysobviously correct me if I'm
wrong you're the podcast starstoday, but it seems like, with
such a varying sort of role,that that creates more
opportunity for different kindsof liability.
Does that make sense?
Vince Polese (06:14):
It does 100%.
Amanda Knight (06:17):
With that in mind , are there some tougher venues
or tougher kinds of securityguard work, if that makes sense
that are more difficult toensure because of where or what
they're doing?
Greg Zschiesche (06:30):
So, just like we just talked about regarding
the condo collapse, there's beenother unfortunate instances
that have transpired in recentyears, for example, the Travis
Scott concert, the Jason Eldineconcert in Las Vegas.
So, using those two examples,those firms that are providing
services in the form of crowdcontrol or trying to manage
(06:55):
those types of festivals, events, really anything with a high
number of patrons who areparticipating has become much
more difficult.
Oftentimes, these events arebeing put on by a common
promoter, or a common entity, ifyou will, who has some pretty
strong language where they pusha lot of the liability down to
(07:19):
the security guard firm, and sobeing able to comply with those
contracts makes it difficult forespecially those that are
smaller operators, those thatdon't necessarily have the more
chest behind them, to be able toafford a robust policy or one
that can necessarily meet all ofthe contract requirements, and
so to be able to meet thoserequirements or be able to
(07:41):
satisfy those requirements.
I think that what these agentsand insurers are quickly
learning is that the number ofavailable markets who are
willing to play and willing towrite the risk it comes at a
very nice or very high premium.
I should say it's not cheap and,quite frankly, I just I don't
see it.
I don't see the marketssoftening anytime soon until I
(08:04):
think we can get, as a societyand as a country, better
controls around this very thing.
And I'm certainly not trying togo the into the direction of
gun control or whatever.
That's not what I'm saying.
I'm simply saying that you know, the more that these instances
show their rear, their ugly face, I think it will continue to
warrant or justify needingsecurity.
(08:26):
As an example, I know that inTexas we just recently wrote an
account where the schoolsthemselves are now starting to
hire off duty officers to patrolthe schools themselves, and so
it just sort of is really a signof the times and kind of where
we're at.
You know, good, bad orindifferent.
Vince Polese (08:45):
Yeah to Greg's comment.
Retail exposure, publicexposure that the guards are
responsible for is becoming moreproblematic from coverage
standpoint and getting correctlimits needed and also coverage
is needed and it's at a premium.
So what was in a program, acompetitively price, is not
(09:09):
coming out of the program and asa result of that, we're seeing
massive increases and or notmassive increases, a slight
increase so, but everything'sincreasing.
So it's a bad story that we'retelling to these folks but
unfortunately, as a result ofthe school shootings, the
special event issues retail,hospitality, overall public
(09:33):
safety Guard firms are justtaking the teeth really.
So it's really a problem.
Amanda Knight (09:39):
With that in mind you know, knowing that it's
tough no matter how you cut itMaybe just not as tough for some
as for others, depending onwhere and what they're doing Are
there things that these firmscan do or keep in mind to try to
give themselves the best shotat obtaining optimal coverage at
the best possible price?
Vince Polese (10:01):
I think right now, what's really important is the
contracts that they sign, makingsure that they're not punitive
for them.
Sometimes these guys need thework and they'll sign whatever
they can get their hands on.
So you got to watch that.
I think that the labor forceout there Sometimes it's a
challenge for these guys to stepup.
It's really important them tohave a really good vetting
(10:22):
process and a screening processso that they are hiring the best
they can and they're gonna haveto pay for it.
So a lot of the hourly chargesthat these guys are getting now
are getting much more.
It's much more for these peoplethat they're getting and which
is a good thing for a lot ofpeople.
More retirees are coming on tothe stage.
(10:43):
More people that are retiringfrom the military or police are
being employed.
So there's a labor pull outthere.
But you got to be really,really careful and you got to be
really really you got toscrutinize a lot.
Scott Gordon (10:56):
There's a lot of, a lot more variables that come
into play in this, like theknittingwood, would imagine.
I didn't know that they werelike the shepherds of the
well-being of the establishment,like in surfside.
That's crazy.
And speaking of shepherding, itseems like you could use some
shepherding through themarketplace out there.
It's pretty daunting right now.
How does working with the rightwholesaler like oh, I don't
(11:19):
know CRC group, make adifference for agents and
clients?
Vince Polese (11:24):
We've been at it.
It's such a long time I'd liketo think that we've been In
building our expertise for thelast 20 odd years.
I do believe that, at the endof the day, most of the
companies that we work with knowthat and they appreciate that
and they look for us forguidance.
We've got Greg, myself, lyles,we've got a few of the folks
(11:47):
that really sort of like focusin on this space, and it's
really something that you can'tdabble in.
You really need to understandthe nuances of the policy forms.
You really need to understandthe nuances of the marketplace,
and I will tell you that thereare carers that do do deals for
us that may not necessarily dothem for other wholesalers, and
(12:08):
the same applies to some otherwholesalers that we compete
against.
So it's really a heavyrelationship driven situation
where CRC brings that to themarketplace, where we know the
marketplace, we know thecoverage forms, we know the
pitfalls and we try to walkthese guys through the forest as
(12:29):
best we can.
Greg Zschiesche (12:30):
So I think one of the things that Vince pointed
out and I really do want tomake sure that we sort of drive
this point home is that Icertainly can't speak to our
competition or competitors orhow they approach this space.
But one thing I will tell youis that within CRC, those that
actually do focus in this areaor spend a great deal of time,
(12:51):
such as Vince Liles and myself,we collaborate very well and
often so.
We're constantly idea sharing,we're constantly feeding each
other information on what's new,what to look for, trends, new
entrants in the market, thosethat are exiting the market.
So anyway, I'd like to thinkthat when our agents contact us
(13:13):
with a deal, they're not justreally getting one broker within
CRC.
They're sort of getting thetribal knowledge of the main
players within CRC or those thatfocus in the space within CRC,
so it's the broader knowledge ofthe organization.
Scott Gordon (13:28):
This has been fun.
I like this one.
This is an interesting topicand, like Amanda said, this is
really the first time we'vecovered it.
Amanda Knight (13:35):
Vincent Gregg, thank you so much for taking
time out of your day to join us.
If you're a listener, thanksfor joining us too.
Providing current insights intothe marketplace is just one
more way CRC Group is placingyou first.
We'll see you next time.
Hello everyone.
Today, Amanda and I are joinedby Vince Polese, a senior
casualty broker and senior vicepresident with our Jericho, New
York office, and Greg Zschiesche, an associate casualty broker
with CRC Group's Houston, Texasoffice.
They're going to talk with ustoday about the challenges
around ensuring security guardfirms.
Amanda Knight (00:22):
This is the Placing you First podcast from
CRC Group.
Scott Gordon (00:26):
This podcast features news and insights from
a vast knowledge base of over5,100 associates who write more
than 35 billion in premiumannually.
Amanda Knight (00:35):
Plus, we give you the latest information on
what's happening at CRC.
This is the Placing you Firstpodcast.
Vince Polese (00:43):
And now the hosts of the podcast Amanda Knight and
Scott Gordon.
Scott Gordon (00:47):
Thanks for joining us guys, thanks for having us,
thank you for having us.
Amanda Knight (00:50):
You know I think this is the first time we've
ever broached this topic on thepodcast, and the companion piece
that we wrote to go with this,I'm pretty sure was the first
time we've really gone in depthon security guard firms.
So for those who maybe haven'tdug into that article yet, can
one or both of you sort of giveus the short version of what the
(01:12):
market looks like for securityguard firms right now?
Greg Zschiesche (01:16):
I would say in a nutshell that the state of the
security guard market is ashard as it's ever been.
A number of programs that havehistorically played into space
have either cut back limits, cutback capacity or exited the
space altogether.
We were noticing it seems likeeither monthly, weekly,
(01:38):
quarterly there are updatesrelative to carriers positions
in this space.
For example, I just found outearlier this week that a go to
excess market that has beenwriting lead access for us in
the space is changing theirposition, likely non renewing
their entire security guard bookfrom a lead access perspective,
(01:58):
and is really not interested inplaying in the space in a lead
position going forward.
So it's those types of changesthat just make the what's
already a difficult situationthat much more difficult.
You know, I think that with thebirth of a number of different
MGA's that have sprung up orpopped up over the course of the
past, you know, two years or soSome of those folks have
(02:22):
interest, many of them do not,and so, unlike many other
classes of business where you'veseen sort of seen this influx
of capacity that's come in,unfortunately that influx of
capacity just hasn't really beenavailable to insurers in this
space.
Vince Polese (02:37):
Yeah to add to Greg's commentary.
It's kind of we can go on andon and on about what the
marketplace is looking like, buttaking a view of the last 20
years, because we've beeninvolved with it in that time
period, it was a foregoneconclusion that you could get
any guard deal done in a program.
(02:57):
There was always a program thatwould fit the mold the auto,
the GL and the access.
When we were getting brought,when we were brought in on to
the deals more times, many werebrought into the access.
So fast forward 20 years, it'salmost as if there's a perfect
storm.
A lot of things have happenedin the marketplace that's just
caused a lot of these firms toexit out of the space.
(03:18):
They've been unprofitable forat least one or two lines of
business.
It could be casualty, it couldbe auto, it could be access, it
could be verdicts.
It's just a real challenge of amarketplace right now and
luckily for us, we've got someexpertise in the class and we're
starting to get a lot moreopportunities, as they've
presented themselves.
Scott Gordon (03:39):
Yeah now, one of the things that struck me as
kind of amazing about theSurfside Condo collapse a few
years ago was that the securityfirm ended up on the hook for
more than 500 million of the $1billion settlement.
That just blew my mind.
Is that a common thing forsecurity firms to be left
(03:59):
pulling the bag like that?
Vince Polese (04:02):
Not necessarily what happened.
So a lot of times what happenswith the guard space is, in fact
, when they are protecting aproperty such as this, they're
responsible for the safety ofthe people that are inside of it
.
I'm not necessarily sure whatthe allegations were at the end
of the day, but I think it mayhave been a part business
(04:24):
decision from the insured andcarers to pay the claim.
They felt that it was wordingthat they provided in their
policy, which was the carecustody control peril, so the
property was under their carecustody control, so to speak.
So there were allegations thatthey could have warned people to
evacuate and didn't.
(04:45):
But I think it was a businessdecision that all the carers
made to make this settlementhappen.
Now, if you look at some of thecarers that are offering
coverages right now, they areputting building collapse
coverages exclusions on it.
So there are a couple of MGU'sthat have actually put that on
it, which I thought was a littleheavy-handed, but they don't
(05:07):
want to necessarily bend thehook for building collapse.
The carer of the insured is ahuge insured, a multi-billion
dollar conglomerate, and theyhad the limits and, as a result
of them having limits, they madethe decision to do it, or the
carers made the decision to payit.
So not common practice, but inthis particular case they felt
(05:29):
it was within their duty to payit, so they did.
At least that's what I can tellfrom the article that was
provided, that was published.
Amanda Knight (05:36):
I mean, I think, even if that's a rare occurrence
, when I think about securityguard firms and the variety of
places you now find securityguards that maybe we didn't have
years ago, the different sortof establishments of all kinds,
it seems like the role can varypretty widely from one security
(05:57):
guard situation to another.
And in my mind you guysobviously correct me if I'm
wrong you're the podcast starstoday, but it seems like, with
such a varying sort of role,that that creates more
opportunity for different kindsof liability.
Does that make sense?
Vince Polese (06:14):
It does 100%.
Amanda Knight (06:17):
With that in mind , are there some tougher venues
or tougher kinds of securityguard work, if that makes sense
that are more difficult toensure because of where or what
they're doing?
Greg Zschiesche (06:30):
So, just like we just talked about regarding
the condo collapse, there's beenother unfortunate instances
that have transpired in recentyears, for example, the Travis
Scott concert, the Jason Eldineconcert in Las Vegas.
So, using those two examples,those firms that are providing
services in the form of crowdcontrol or trying to manage
(06:55):
those types of festivals, events, really anything with a high
number of patrons who areparticipating has become much
more difficult.
Oftentimes, these events arebeing put on by a common
promoter, or a common entity, ifyou will, who has some pretty
strong language where they pusha lot of the liability down to
(07:19):
the security guard firm, and sobeing able to comply with those
contracts makes it difficult forespecially those that are
smaller operators, those thatdon't necessarily have the more
chest behind them, to be able toafford a robust policy or one
that can necessarily meet all ofthe contract requirements, and
so to be able to meet thoserequirements or be able to
(07:41):
satisfy those requirements.
I think that what these agentsand insurers are quickly
learning is that the number ofavailable markets who are
willing to play and willing towrite the risk it comes at a
very nice or very high premium.
I should say it's not cheap and,quite frankly, I just I don't
see it.
I don't see the marketssoftening anytime soon until I
(08:04):
think we can get, as a societyand as a country, better
controls around this very thing.
And I'm certainly not trying togo the into the direction of
gun control or whatever.
That's not what I'm saying.
I'm simply saying that you know, the more that these instances
show their rear, their ugly face, I think it will continue to
warrant or justify needingsecurity.
(08:26):
As an example, I know that inTexas we just recently wrote an
account where the schoolsthemselves are now starting to
hire off duty officers to patrolthe schools themselves, and so
it just sort of is really a signof the times and kind of where
we're at.
You know, good, bad orindifferent.
Vince Polese (08:45):
Yeah to Greg's comment.
Retail exposure, publicexposure that the guards are
responsible for is becoming moreproblematic from coverage
standpoint and getting correctlimits needed and also coverage
is needed and it's at a premium.
So what was in a program, acompetitively price, is not
(09:09):
coming out of the program and asa result of that, we're seeing
massive increases and or notmassive increases, a slight
increase so, but everything'sincreasing.
So it's a bad story that we'retelling to these folks but
unfortunately, as a result ofthe school shootings, the
special event issues retail,hospitality, overall public
(09:33):
safety Guard firms are justtaking the teeth really.
So it's really a problem.
Amanda Knight (09:39):
With that in mind you know, knowing that it's
tough no matter how you cut itMaybe just not as tough for some
as for others, depending onwhere and what they're doing Are
there things that these firmscan do or keep in mind to try to
give themselves the best shotat obtaining optimal coverage at
the best possible price?
Vince Polese (10:01):
I think right now, what's really important is the
contracts that they sign, makingsure that they're not punitive
for them.
Sometimes these guys need thework and they'll sign whatever
they can get their hands on.
So you got to watch that.
I think that the labor forceout there Sometimes it's a
challenge for these guys to stepup.
It's really important them tohave a really good vetting
(10:22):
process and a screening processso that they are hiring the best
they can and they're gonna haveto pay for it.
So a lot of the hourly chargesthat these guys are getting now
are getting much more.
It's much more for these peoplethat they're getting and which
is a good thing for a lot ofpeople.
More retirees are coming on tothe stage.
(10:43):
More people that are retiringfrom the military or police are
being employed.
So there's a labor pull outthere.
But you got to be really,really careful and you got to be
really really you got toscrutinize a lot.
Scott Gordon (10:56):
There's a lot of, a lot more variables that come
into play in this, like theknittingwood, would imagine.
I didn't know that they werelike the shepherds of the
well-being of the establishment,like in surfside.
That's crazy.
And speaking of shepherding, itseems like you could use some
shepherding through themarketplace out there.
It's pretty daunting right now.
How does working with the rightwholesaler like oh, I don't
(11:19):
know CRC group, make adifference for agents and
clients?
Vince Polese (11:24):
We've been at it.
It's such a long time I'd liketo think that we've been In
building our expertise for thelast 20 odd years.
I do believe that, at the endof the day, most of the
companies that we work with knowthat and they appreciate that
and they look for us forguidance.
We've got Greg, myself, lyles,we've got a few of the folks
(11:47):
that really sort of like focusin on this space, and it's
really something that you can'tdabble in.
You really need to understandthe nuances of the policy forms.
You really need to understandthe nuances of the marketplace,
and I will tell you that thereare carers that do do deals for
us that may not necessarily dothem for other wholesalers, and
(12:08):
the same applies to some otherwholesalers that we compete
against.
So it's really a heavyrelationship driven situation
where CRC brings that to themarketplace, where we know the
marketplace, we know thecoverage forms, we know the
pitfalls and we try to walkthese guys through the forest as
(12:29):
best we can.
Greg Zschiesche (12:30):
So I think one of the things that Vince pointed
out and I really do want tomake sure that we sort of drive
this point home is that Icertainly can't speak to our
competition or competitors orhow they approach this space.
But one thing I will tell youis that within CRC, those that
actually do focus in this areaor spend a great deal of time,
(12:51):
such as Vince Liles and myself,we collaborate very well and
often so.
We're constantly idea sharing,we're constantly feeding each
other information on what's new,what to look for, trends, new
entrants in the market, thosethat are exiting the market.
So anyway, I'd like to thinkthat when our agents contact us
(13:13):
with a deal, they're not justreally getting one broker within
CRC.
They're sort of getting thetribal knowledge of the main
players within CRC or those thatfocus in the space within CRC,
so it's the broader knowledge ofthe organization.
Scott Gordon (13:28):
This has been fun.
I like this one.
This is an interesting topicand, like Amanda said, this is
really the first time we'vecovered it.
Amanda Knight (13:35):
Vincent Gregg, thank you so much for taking
time out of your day to join us.
If you're a listener, thanksfor joining us too.
Providing current insights intothe marketplace is just one
more way CRC Group is placingyou first.
We'll see you next time.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.