After nine years of avoiding being named as a defendant in over eight lawsuits, it finally happened. Just before I sold my security company we were named as a co-defendant despite delivering service that upheld the terms of the contract. Many security company owners believe, as I did, that if the contract is well written and their company delivers what’s in the contract then the chance of being sued diminishes.
- Attorneys today meet with increasing success at throwing out protections offered by contracts on the premise that the contract is unfair and detrimental to society because it unfairly shields security companies from liability and contributes to negligent practices.
- Insurance companies that take on security service providers are now limiting the type of coverage they provide increasing the risk that a lawsuit will shut many providers down.
Why was my company named?
The plaintiffs’ attorney postulated that a contract should not be a shield for companies to hide behind. In short, contract language that claim security services are only for the clients’ benefit and do not transfer to a third-party beneficiary, such as a tenant of an apartment community, should be stricken from the contract. The plaintiffs’ attorney asserted that, the contract language created an environment whereby security practices were negligent thereby putting the plaintiff’s safety at risk. As a result they were permitted by a judge to add us to the lawsuit. Being named as a co-defendant gives a plaintiff attorney more time for discovery which is used to search for ways a security provider may be negligent.
The goal of a plaintiffs attorney is to name as many co-defendants as possible. The Plaintiffs’ attorney strives to create conflict between the defendants especially when there is a security service provider in the mix. They know the security company’s client (here-forth referred to as client) also wants to keep the security provider in the game. The clients’s tactic is to place blame on the security provider stating they followed the professional advice of the security provider which was faulty and negligent at its core, therefore all of the blame as well as any award should be proportioned to the security provider.
This provides significant risk for the unprepared security company. Negligent or not, you are now spending money on defense. How can a security provider defend against such aggressive and long reaching strategies?
Fear not! There are strategies and tactics you can implement to mitigate much of this risk. PerformusTrack has composed a series on risk mitigation for security companies. Look for our next post in the series which provides solutions and resources to help insulate your company from this sort of risk.
Series Table of Contents
Article III – Insurance Discussion (Often Overlooked Coverage Exclusions)
Article V – What type of information and how much information do you need in Reports
Article VI – Advantages and Mitigating Value of Management Software such as PerformusTrack.