Why Your Business Insurance Company Cares About Your Security Plan
A property owner in East Memphis recently called me after getting his commercial insurance renewal. His premium had gone up 22 percent year over year. He'd had two claims in the past 18 months, both property crimes, and his carrier's underwriting team had flagged his location as higher risk. He wanted to know if better security would actually lower his rate, or if the increase was just what it was.
The short answer is yes, documented security measures do influence underwriting decisions, and in some cases meaningfully. But the key word is documented. Your insurer doesn't know you have a security guard unless you tell them. They don't know about your camera system, your access control, your patrol contract, or your response protocols unless those things are in writing and you've shared them.
How Underwriters Assess Security Risk
Commercial property underwriters look at several factors when pricing your policy: your claims history, your location and neighborhood crime data, the type of business and what's on the premises, and the security measures you have documented. That last category is often the most actionable one, because you can actually change it.
Carriers look for things like: Do you have a monitored alarm system? Do you have professional security coverage during overnight hours? Do you have controlled access to your facility? Do you have documented incident response procedures? Each of these factors reduces the statistical likelihood of a loss, and underwriters price accordingly.
What Documentation Actually Looks Like
If you're working with a professional security company, you should be able to provide your insurer with a copy of your security services contract, shift logs showing regular patrol coverage, incident reports from any events that occurred, and documentation of any security assessments or recommendations that have been implemented.
That's a complete security story. Compare that to a business that says "we have a guard company" with nothing in writing and no incident history to share. The documented story tells an underwriter that your property is actively managed. The undocumented version gives them nothing to work with except your claims history.
The Memphis-Specific Context
Memphis carries higher crime statistics than many comparable cities. Underwriters know this. Properties in Shelby County face higher baseline risk assessments than comparable properties in, say, suburban Nashville. That makes documented security measures even more valuable here, because you're working against a regional risk profile that you can't control, but you can offset.
I've helped several clients in Midtown and Downtown Memphis put together security documentation packages for their insurance renewals. In more than one case, the client was able to use the documentation to negotiate a reduced rate or at least to prevent an increase. The cost of the security coverage was partially or fully offset by the premium impact.
If you want to understand how your current security setup maps to your insurance exposure, I'm happy to walk through it with you. Our commercial patrol services include regular reporting that can serve as insurance documentation. Visit our contact page or call (202) 222-2225 to set up a consultation.