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As Crime Rates Rise, Tenant Security Must Increase

With legal actions against real estate firms for failing to protect residents from violent crimes increasing in cost and frequency, property owners and landlords need to have a robust security plan in place to ensure tenant safety.
By: | October 25, 2021

Violent crime rates across the United States were up significantly in the first half of 2021, compared to the same period in 2020, according to a report published by the Council on Criminal Justice. The findings of the report show that homicide rates were 16% higher, and incidents of aggravated assault, motor vehicle theft, and domestic violence were up nine %, 21%, and two %, respectively.

While the bulk of these crimes occurred in urban centers, rural and suburban regions of the country were not immune, compelling President Biden and the U.S. Department of Justice to announce new measures in June 2021 to combat gun violence and other violent offenses.

For owners and managers of commercial and residential properties, the recent crime wave is a red flag that should alert them to the need to ensure adequate internal and external premises security. Jury verdicts and settlements against real estate firms are rising for cases alleging insufficient security measures for protecting residents and visitors against violent crimes that are more frequent and costly, according to QBE North America’s claims data.

“The risk of violent crime has become a very real and regular occurrence,” said Mitch Nelson, VP, Major Case Unit, Excess Claims, and TPA Liability for QBE North America. “So, at the same time, jury verdicts and settlements brought against property owners are also becoming more commonplace.”

Failing to Prepare is Preparing to Fail 

Mitch Nelson, VP, Major Case Unit, Excess Claims, and TPA Liability, QBE North America

Now is the time for owners and managers to review the breadth and scope of their formal security plan. This is an exercise that should be done on an annual basis at minimum and after any incidents. Areas of vulnerability need to be identified and strengthened through corrective actions. Nelson and his QBE Risk Solutions colleague Deborah Tansey, Lead Loss Control Technical Consultant, offer a list of security best practices for real estate companies to consider followed by poor practices.

At a minimum, the security plan should document the following:

  • Procedures regarding subcontractor vetting, contractual indemnification, collecting Certificates of Insurance and oversight must be comprehensive and clear, as they pose a security risk when on the premises. Incidents in which subcontractors have damaged surveillance cameras or familiarized themselves with the premises in preparation for a robbery or other crime are not uncommon.
  • Building, fencing and roof ingress/egress security controls ensuring adequate perimeter protections, as well as the landscaping maintenance to identify and eliminate potential hiding places.
  • Premises lighting, including all entryways and parking facilities. The Illuminating Engineering Society of North America (IESNA) issues a guide on good lighting practices.
  • Number of security motion sensors, alarm system, surveillance cameras, gates and key fobs, including their location, date of purchase and name of manufacturer. Document how often operability checks are conducted and the elimination of security controls, such as a reduction in the number of surveillance cameras.
  • The number of security personnel, hours of operation and frequency/type of patrols (hourly foot patrols or automobile patrols), along with procedures for replacing personnel because of illness or other reasons.
  • Detailed description of the perimeter enclosure, including the type (stone wall, metal or wood fence), location, height, recent repairs, and routine maintenance and inspection procedures.
  • Number and location of signage prohibiting concealed weapons on the premises. Document local and state gun carry laws in the plan, as they may have changed in the prior year.

Based on the review, identify areas of improvement. For example, if a security guard is retained from 8 pm to 6 am, and an atypical number of crimes on the premises were reported between 6pm and 8pm, the owner or manager should consider extending the hours of security patrols.

“Taking these basic steps will help real estate owners to secure their property and the safety of their tenants,” said Tansey. “Failure to do so will only leave them exposed to the rising tide of violent crime we are seeing right now.”

Cutting Corners Is Unwise

Deborah Tansey, Lead Loss Control Technical Consultant, QBE North America

Criminals are always on the lookout for weak links such as substandard security systems and procedures. The recent crime wave suggests that owners and managers of residential and commercial properties should do the same, and identify any potential security vulnerabilities. If a violent crime occurs and results in litigation, the efficacy of the security measures may be scrutinized for possible weaknesses.

Examples include a reduction in the number of hours security guards previously worked, a decrease in the number of security guards, no evidence of background checks, and/or switching from off-duty police officers to less expensive private security personnel. Jurors or arbitrators may also review if the insured effectively monitored the security company to ensure the performance of stated tasks in the security plan.

Other evidence of lax security includes key fob entry codes that are not routinely changed, trees and shrubs not regularly trimmed to provide adequate visibility, and damaged enclosures, alarm systems and lighting instruments that were not repaired in a timely basis. Broken motion sensors and surveillance cameras send a similar message, as does a reduction in their number.

If a residential complex across the street of the same size and rent has more or better security protocols, such as a greater number of surveillance cameras, indoor and outdoor lighting instruments, and security guards working longer hours, the insured’s security posture can be perceived as substandard. Even a decision to charge more for rent without commensurately enhancing tenant safety can create an adverse impression with a jury or arbitrator.

If the local area has recently experienced a publicized increase in violent crime incidents, and the insured has not enhanced premises safety and security, this, too, can result in adverse juror or arbitrator perceptions. In some states, two or more similar crimes at a premises over a three-year period are perceived by courts as foreseeable events, making them more difficult to defend against if premises have substandard security systems and procedures.

A real estate company deemed to have cut back on security to reduce operating expenses, neglected to properly maintain existing protections, or failed to respond to new crime patterns confronts the risk of increased monetary damages.

“There should be no skimping when it comes to security,” said Tansey. “Property owners need to ensure that they have the best security practices in place in relation to the existing crime patterns to mitigate against problems of violent crime.”

Considering the risk, these security best practices and bad practices should be always in mind. Given the eye-opening statistics on the recent uptick in violent crimes, owners and managers of residential and commercial property need to ensure their formal safety plans and property insurance policies are consistent with the times.

To learn more about QBE North America’s property insurance solutions, visit https://www.qbe.com/us.

 

Deborah Tansey is a Lead Loss Control Technical Consultant for the Risk Solutions team at QBE North America.

Mitch Nelson is VP, Major Case Unit, Excess Claims, TPA Liability at QBE North America.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with QBE North America. The editorial staff of Risk & Insurance had no role in its preparation.

This article is for general informational purposes only and is not legal advice and should not be construed as legal advice.  The views and opinions expressed herein are those of the author and do not necessarily reflect those of QBE Holdings, Inc. or its subsidiaries, business units or affiliates.  QBE makes no warranty, representation, or guarantee regarding the information herein or the suitability of these suggestions or information for any particular purpose. QBE hereby disclaims any and all liability concerning the information contained herein and the suggestions herein made. Moreover, it cannot be assumed that every acceptable risk transfer procedure is contained herein or that unusual or abnormal circumstances may not warrant or require further or additional risk transfer policies and/or procedures. The use of any of the information or suggestions described herein does not amend, modify, or supplement any insurance policy. Consult the actual policy or your agent for details about your coverage. QBE and the links logo are registered service marks of QBE Insurance Group Limited. © 2021 QBE Holdings, Inc.

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