As the courts and the legal system continue to impose greater duties upon community associations to provide for the security of residents and guests, many boards of directors of owner associations are contracting with armed patrol services to routinely patrol the community.

Since there is a significant potential for liability on the part of the owner association in hiring armed guards, it is important to take appropriate steps to limit or shift liability away from the owner association. Some areas to be considered are:

Engage an Independent Contractor for Patrol Services. The contract with the patrol company should clearly state the patrol company is an independent contractor and not an employee of the owner association. The association will have more liability for an employee’s actions than an independent contractor’s. Although the contract language will not be conclusive in making this determination, avoid language that indicates the association requires exclusive work, has control over how the guard performs his or her work, pays a salary rather than an hourly or fixed rate, provides the guards with tools or benefits, or dictates the exact time and nature of performance.

Require Training, Education and Other Qualifications. The owner association should require proof that each guard is properly trained, educated and qualified for this line of work. Although many patrols are staffed with off-duty police officers, many are not. There should be some required minimum level of training and education guards have before they are allowed in the Community. The owner association should be aware of how and by whom these guards are trained, and by whom the guards are certified in weapons training. Any weapons training should include training in the use of force as allowed by Colorado law. Before entering into a contract for patrol services, the Board should obtain a letter from the service provider regarding the training, education and qualifications and review it with the association’s legal counsel and insurance carrier.

Require Screening of Guards. In addition to training and education, the board of directors should require the patrol company conduct background checks on all employees who have access to or information related to the community and its residents to ensure the employees do not have a record of criminal activities. It is also important for the board to be aware of the scope of the background check. For instance, does the service provider conduct a nationwide background check or a more limited one? Does the check turn up convictions only or does it also include arrests not leading to a conviction? Will other non-criminal information be obtained through screening?

Insurance. The board should carefully review the owner association’s insurance policies to determine whether the insurance will provide coverage in a sufficient amount for the association if the owner association is sued as a result of a guard’s activities. If not, the board should discuss the possibility of obtaining additional coverage with the association’s insurance agent.

The patrol company should also carry adequate liability insurance coverage and the association should be named as an additional insured. The association should obtain a valid certificate of insurance to evidence this coverage.

Contract Terms to Protect Owner Associations. The contract entered into with the patrol company should have terms and provisions to protect the owner association. For example, the contract should require the service provider to indemnify and hold harmless the association from any damage, injury or liability that arises from guard activities in the community, such as the use of force. The proposed contract should also be reviewed by the owner association’s legal counsel before it is executed. In addition to the concerns regarding training and education on the use of force, independent contractor status, insurance and indemnification discussed above, the contract should address the following issues:

  • The company’s hiring procedures, including background checks;
  • Whether guards will be required to wear uniforms and display identification cards;
  • Reporting procedures to the board or manager regarding activity in the community;
  • The guards’ procedures for notifying police in the event of an emergency;
  • The scope of the guards’ responsibility;
  • The ability to terminate the contract with or without cause;
  • Whether the service provider can assign the contract to another patrol company without the approval of the association;
  • An award of attorney fees to the prevailing party in the event of a dispute.

Summary. Because of the great potential of liability in hiring an armed patrol service, there is no way to fully protect an owner association from every risk. However, by addressing the considerations listed above in advance and ensuring the contract is well-drafted and reviewed by the association’s attorney, the board of directors can reduce the likelihood of association liability and, in the event of liability, shift the financial burden away from the association.

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