Why Security Company Insurance Prices Increased

If you run a security company in the UK, the chances are you have noticed a significant rise in your insurance premiums over recent years. Whether you provide manned guarding, door supervision, CCTV monitoring, cash-in-transit services, or event security, the cost of maintaining adequate cover has climbed — in some cases quite dramatically. For many business owners, renewing insurance has become one of the most frustrating parts of running a security operation.

The increase is not arbitrary, and it is not unique to your business. It reflects a complex set of pressures that have reshaped the UK insurance market across the security sector. Understanding why prices have gone up is the first step towards managing costs intelligently and ensuring your business remains properly protected without overpaying.

This guide breaks down the main factors driving premium increases for security companies, explains what underwriters are looking at when they price your risk, and offers practical guidance on how to present your business in the best possible light at renewal.

The Security Sector Is Considered High Risk

Insurance is fundamentally about risk. The higher the likelihood of a claim, and the higher the potential cost of that claim, the more an insurer will charge to cover it. Security work sits in one of the highest-risk categories in the commercial insurance market, and this has always kept premiums above the average for comparable business types.

Security operatives work in environments where physical confrontations are a recognised possibility. They deal with members of the public, manage crowd control, handle situations involving intoxicated individuals, and in some specialisms work with high-value assets or in locations that attract criminal activity. Any of these scenarios creates a direct pathway to a claim — whether that is a public liability claim from an injured third party, an employers liability claim from an injured operative, or a professional indemnity claim from a client who alleges negligence.

The sector's inherent risk profile means that when wider market conditions shift — as they have significantly in recent years — security companies tend to feel the impact more acutely than lower-risk industries.

Rising Claims Frequency and Severity

One of the most significant drivers of premium increases is a rise in both the number of claims and the average value of those claims across the security sector.

Personal injury claims, particularly those arising from physical altercations at licensed premises, have increased over the past several years. Claims management companies actively target venues and door supervisors following incidents, and the legal framework allows claimants to pursue substantial compensation. Insurers have absorbed significant losses from this class of business, and that loss experience is fed directly back into pricing.

Employers liability claims have also become more costly. UK employers have a legal duty to protect their employees from workplace injury, and security operatives face genuine physical hazards. Slips and trips, assaults, and musculoskeletal injuries sustained during restraints or physical interventions all generate employers liability claims. As the cost of rehabilitation, loss of earnings, and legal representation has increased, so too has the average settlement value — pushing up the reserves insurers must set aside and, by extension, the premiums they charge.

In specialisms such as cash-in-transit and close protection, the severity of potential claims is even more pronounced. A single major incident can generate losses running into hundreds of thousands of pounds, and insurers price accordingly.

The Broader Insurance Market Has Hardened

Security company insurance does not exist in isolation. It is part of the wider commercial insurance market, which entered what is known in the industry as a "hard market" cycle. In a hard market, premiums rise, capacity reduces, and underwriters apply stricter criteria to the risks they are willing to accept.

The hard market was triggered by a combination of factors that accumulated over several years. Global losses from natural catastrophes — hurricanes, floods, wildfires — significantly depleted the capital reserves of major reinsurers. Reinsurance is the insurance that insurers buy to protect themselves against large losses, and when reinsurance costs increase, those costs are passed down the chain to policyholders.

The COVID-19 pandemic added further strain. Business interruption claims ran into billions across the market, and legal disputes over policy wordings resulted in landmark court judgments that increased the scope of what insurers were required to pay. This eroded reserves and prompted a widespread review of pricing and risk appetite across all commercial lines.

For security companies, this broader market hardening compounded the sector-specific pressures already pushing premiums upward. Even businesses with clean claims records found their renewals increasing, simply because the market as a whole demanded higher rates.

Regulatory and Compliance Costs Have Increased

The security industry in the UK is regulated by the Security Industry Authority (SIA), which licenses individual operatives and sets standards for training, conduct, and competency. The regulatory landscape has continued to evolve, and increased compliance requirements have contributed to rising insurance costs in a number of ways.

Insurers assess whether a security company meets SIA licensing requirements as part of their underwriting process. Companies that operate with unlicensed staff — whether intentionally or through oversight — face immediate difficulties obtaining cover, and any claim arising from an incident involving an unlicensed operative may be disputed or excluded. The risk of regulatory non-compliance therefore adds a layer of uncertainty that insurers factor into pricing.

The introduction of Martyn's Law — formally the Terrorism (Protection of Premises) Act — is also beginning to shape the risk landscape. The legislation places statutory duties on venue operators and event organisers to have security plans in place for publicly accessible locations. For security companies providing services to venues affected by this legislation, the responsibilities are significant, and the potential liability exposure in the event of a failure increases accordingly.

Insurers operating in the security sector are already beginning to price in the implications of Martyn's Law, particularly for companies operating in the events and venue security space. This represents a genuine, emerging cost driver that is unlikely to abate as the legislation is fully implemented.

Inflation Has Driven Up Claim Costs

The sustained period of high inflation experienced in the UK from 2022 onwards has had a direct impact on the cost of claims across all commercial insurance lines, and the security sector is no exception.

Legal costs, medical expert fees, and loss of earnings calculations all feed into the value of personal injury claims. When inflation is high, the cost of medical treatment rises, the earnings that claimants seek to recover are higher in absolute terms, and solicitors' fees increase. The net effect is that the average value of a settled claim is materially higher than it would have been several years ago.

For security companies, this inflationary pressure affects both public liability and employers liability lines. A claim that might have settled for £30,000 five years ago may now settle for significantly more, and insurers adjust their pricing models to reflect these increased average claim values.

Property-related insurance, where relevant to security companies operating their own premises or holding clients' assets, has also been affected. The cost of rebuilding, repairs, and replacement has increased substantially due to supply chain disruption, materials inflation, and labour shortages in the construction trades.

Increased Use of Technology and Cyber Exposures

The security industry has undergone rapid technological transformation. Remote monitoring, networked CCTV systems, access control platforms, biometric entry systems, and data-driven surveillance tools are now commonplace. While this technology enhances operational capability, it also creates new liability exposures that were not a significant concern for security companies a decade ago.

A remote monitoring centre that suffers a cyber attack could lose access to its systems at a critical moment, leaving clients unprotected. A CCTV system that records personal data is subject to UK GDPR, and a data breach could generate both regulatory fines from the Information Commissioner's Office and civil claims from affected individuals. A networked access control system that is compromised could result in unauthorised entry to a client's premises, with all the consequential losses that might follow.

Professional indemnity insurers and cyber insurers have both become more cautious in how they approach security companies as a result. Premiums for professional indemnity cover have risen, limits have been reviewed, and some underwriters have sought to exclude or sub-limit technology-related liabilities unless specific cyber cover is purchased separately.

This fragmentation of cover — where security companies now need to purchase additional cyber policies to maintain comprehensive protection — adds directly to the overall insurance cost and reflects a genuine evolution in the risk profile of the sector.

Reduced Capacity and Fewer Underwriters

The security sector has always attracted a relatively narrow pool of specialist underwriters. The risks involved require specialist knowledge and appetite, and not every general commercial insurer is willing or able to write security business.

During the hard market, several underwriters reduced their appetite for security risks, either withdrawing from certain sub-classes (such as door supervision or nightclub security) or imposing stricter eligibility criteria that excluded larger numbers of businesses. When capacity reduces, the remaining underwriters face less competitive pressure, and premiums rise as a result.

For security companies seeking renewal, this reduction in available markets has meant fewer options, less competitive pricing, and in some cases difficulty placing cover at all. Specialist brokers with strong relationships in the Lloyd's of London market and with dedicated security underwriters have become more important than ever in navigating this environment.

Poor Claims Experience Within the Industry

Individual companies are priced not only on their own claims history, but also — to a degree — on the loss experience of the sector as a whole. If the security industry collectively generates a poor claims ratio, underwriters apply rate increases across the board, even to businesses with clean records.

The reality is that the security sector has, as a whole, generated significant losses for underwriters over the past several years. High-profile incidents at venues, compensation payouts for assaults, and professional indemnity claims from dissatisfied clients have all contributed to an industry-wide loss ratio that has prompted market-wide repricing.

This means that even a well-managed security company with no claims history in the past five years may still face higher premiums than expected, simply because the underwriter's portfolio of security risks as a whole has been unprofitable. It is an uncomfortable reality, but one that business owners need to understand when they receive their renewal terms.

What Security Companies Can Do to Manage Premiums

Understanding why premiums have increased does not make the cost easier to absorb, but it does point towards practical steps that security companies can take to present themselves as better risks and, where possible, mitigate increases.

Invest in Training and Licensing Compliance

Ensure all operatives hold valid SIA licences and that your internal processes for checking and renewing licences are robust. Underwriters look favourably on companies that can demonstrate a strong compliance culture, and any gap in licensing creates both legal exposure and insurance risk.

Maintain Comprehensive Incident Records

Document all incidents thoroughly, including near-misses, and show evidence that lessons have been learned and procedures updated. A company that can demonstrate it takes risk management seriously is a better risk in the eyes of an underwriter, and this can support more favourable pricing.

Review Your Cover Structure

Speak to a specialist broker about whether your current cover structure is still appropriate for your business activities. As the market has evolved, standard policy wordings have been updated and new exclusions have emerged. A thorough review ensures you are not paying for cover you do not need while also ensuring there are no dangerous gaps.

Consider Higher Voluntary Excesses

Agreeing to a higher voluntary excess on certain lines of cover can reduce your premium, particularly if your claims history is clean. This approach works best for businesses that are confident in their risk management and can absorb a higher initial outlay in the event of a claim.

Work With a Specialist Broker

General commercial insurance brokers may lack the market relationships and specialist knowledge needed to place security risks effectively in the current environment. A broker who specialises in security sector insurance will have access to underwriters who understand the business, can negotiate based on your specific risk profile, and can provide guidance on risk management practices that improve your insurability.

The Outlook for Security Company Insurance Premiums

There are some early indications that the commercial insurance market is beginning to soften in certain areas as capacity returns and competition increases. However, the security sector faces a number of structural cost pressures — regulatory change, technology risk, inflation in claim values — that are unlikely to reverse quickly.

Businesses that take a proactive approach to risk management, maintain a clean claims record, and work with specialist brokers are best placed to achieve competitive premiums even in a challenging market. Those that renew on auto-pilot, without reviewing their cover or exploring the market, are most likely to continue experiencing sharp increases.

The security industry remains an essential part of the UK economy, protecting people, assets, and events across the country. Insurance is a non-negotiable cost of operating in this sector, but with the right approach it can be managed intelligently.

Speak to Insure24 About Security Company Insurance

At Insure24, we understand the specific risks faced by security companies operating in the UK. Whether you run a small manned guarding operation, a specialist events security team, or a large multi-service security firm, we can help you secure comprehensive cover at a competitive premium.

Our team works with specialist underwriters who have genuine expertise in the security sector, and we take the time to understand your business before approaching the market. We help you present your risk in the best possible light, identify gaps in your existing cover, and ensure your policy responds when you need it most.

To discuss your security company insurance requirements, call us on 0330 127 2333 or visit www.insure24.co.uk for a quote today.

Frequently Asked Questions

Why has my security company insurance gone up at renewal?

Premium increases at renewal are driven by a combination of factors including rising claims costs across the sector, broader market hardening, inflation, and the evolving risk profile of security businesses. Even companies with clean claims records can see increases when the wider market is repricing. Working with a specialist broker ensures you are accessing the best available terms for your risk profile.

What types of insurance does a security company need?

Most security companies require public liability insurance, employers liability insurance (legally required if you employ staff), and professional indemnity cover. Depending on your specific activities, you may also need motor fleet insurance, cyber liability cover, and management liability insurance. A specialist broker can advise on the right combination for your business.

Does the SIA licensing status of my staff affect my insurance?

Yes. Underwriters will check that your operatives hold valid SIA licences as part of the risk assessment process. Operating with unlicensed staff can invalidate your cover in the event of a claim and may result in difficulty placing insurance altogether. Maintaining up-to-date licensing records is both a legal and an insurance requirement.

Can I reduce my security company insurance premium?

Yes, there are a number of strategies that can help manage costs. These include maintaining strong compliance and training records, investing in risk management procedures, agreeing higher voluntary excesses, and working with a specialist broker who can access a wider range of underwriters. A clean claims record over several years will also support more competitive pricing.

What is Martyn's Law and how does it affect security companies?

Martyn's Law — the Terrorism (Protection of Premises) Act — places legal duties on operators of publicly accessible locations to have counter-terrorism security plans in place. For security companies working with venues and events affected by the legislation, this increases the scope of responsibility and potential liability. Insurers are beginning to price in these obligations, particularly for companies operating in the events security space.

Is cyber insurance relevant to security companies?

Increasingly, yes. Security companies that operate networked surveillance systems, remote monitoring platforms, or access control technology hold sensitive client data and rely on connected systems. A cyber attack or data breach can result in significant financial loss and reputational damage. Cyber insurance provides cover for breach response costs, regulatory fines, and liability claims arising from a cyber incident.