Built for Compliance: Lorica and Private Security Regulations

The U.S. private security industry isn’t regulated by a single set of rules. Every state has its own licensing laws, insurance requirements, and legal quirks. That patchwork system creates real risks for security companies, clients, and individual professionals – risks that are often misunderstood or difficult to navigate.

At Lorica, we’ve spent months studying the legal and regulatory terrain of every U.S. state, as we’re not just building a marketplace for security services. We’re designing a platform that will help clients and professionals operate in full compliance with state law, starting with the states where compliance is readily achievable.

This post is a practical overview of how Lorica will simplify legal complexity. We focus primarily on Florida and Texas – large states with strict but clear regulations – and use California and New York for contrast. If you're a principal, security company, or investor trying to make sense of how regulation shapes this industry, read on. Note, of course, that this post does not constitute legal advice.

Why Regulatory Compliance Matters in Private Security

Hiring a licensed security agent might seem simple. But in most states, there are rules about who can work where, how they're paid, which licenses they need, and how insurance is structured. Missteps can lead to legal penalties, civil liability, or voided insurance claims.

That risk is especially high when:

• An unlicensed individual takes on armed work

• A client hires a 1099 contractor without verifying whether they're affiliated with a licensed company

• A security company subcontracts a job without the proper paperwork

Principals understandably assume their vendor has handled compliance, which is not always the case. Sometimes, the vendor assumes the same thing about the subcontractor. In a high-trust industry, that kind of ambiguity can create unnecessary exposure. Let’s turn to a few examples.

Florida: A Complex but Workable Landscape

Florida is a magnet for security professionals. But it also has one of the more complex regulatory environments in the country. Professionals often hold both a D License (for unarmed work) and a G License (for armed work), but those licenses don't allow them to operate independently.

Florida law requires all paid security work to be performed under the umbrella of a B-licensed security agency. That means individual contractors – even those with extensive credentials – must be affiliated with a licensed firm to legally take on jobs.

Florida also requires armed security to carry a minimum of $1 million in commercial liability insurance, held by the licensed agency. Individual professionals cannot fulfill this requirement on their own.

Additionally, Florida recognizes concealed weapon licenses (CWFLs), which are required for armed professionals carrying concealed firearms off-duty or in roles where open carry is not applicable. However, holding a CWFL alone is not a substitute for a G License or for meeting agency-based insurance and employment requirements.

The result is a system that encourages licensing but limits mobility. Professionals and companies often rely on informal processes to staff contracts, which can increase compliance risk for all parties.

Lorica’s Approach in Florida:

• Professionals will be required to associate with a B-licensed company to accept contracts

• Lorica will verify all licenses, including D, G, and B Licenses, as well as any CWFLs, before contracts are issued

• Contracts will reflect insurance coverage and legal structure

• Professionals and companies will each have transparency into how liability flows

• Lorica will also help track license expirations and required requalification dates so that no professional is placed on a contract without valid, up-to-date credentials

By guiding professionals into compliant structures and giving clients confidence in their teams, Lorica aims to turn a complex state into an easily navigable one.

Texas: Flexibility Within Limits

Texas is one of the more permissive states when it comes to contracting. Level II (unarmed), Level III (armed), and Level IV (Personal Protection Officer) license holders can work as 1099 contractors—but only when contracted by a company that holds a valid C License.

Level IV PPOs are specifically authorized to provide personal protection services, including executive protection, and must first complete Level III training and then additional instruction focused on close protection. Given Lorica’s focus on executive protection, the Level IV license is especially relevant. It adds an extra layer of complexity to compliance in Texas, requiring clear tracking of training, licensing, and eligibility for specific types of high-trust assignments.

In addition to occupational licenses, Texas also requires anyone carrying a handgun in the course of armed security work to hold a valid License to Carry (LTC), which is distinct from the Level III and IV security licenses. Although Texas permits constitutional carry for civilians, licensed security personnel performing armed duties must comply with regulatory requirements that go beyond civilian carry laws.

C-licensed companies are responsible for ensuring compliance across the board. That includes insurance coverage, verification of all required training and firearms certifications, and proper registration of each officer with the state. Armed and PPO work requires liability coverage, typically in the range of $1 million per occurrence.

While Texas allows for a flexible structure, it also enforces its rules. Violations can result in license suspension, fines, or worse. And clients are not immune from scrutiny when they fail to hire through proper channels.

Lorica’s Approach in Texas:

• All professionals providing armed or executive protection services will be required to associate with a C-licensed company

• Lorica will ensure each agent’s Level II, III, or IV license, LTC, and training status is current

• Job postings will automatically reflect credential requirements, including PPO status where applicable

• Insurance documentation will be integrated into the platform

• Lorica will also help track license expirations and required requalification dates so that no professional is placed on a contract without valid, up-to-date credentials

The result will be a streamlined system that gives both sides confidence. Companies can grow their footprint. Professionals can access better jobs. And clients can contract with peace of mind.

California and New York: Cautionary Comparisons

Several U.S. states have challenging regulatory environments, and we’ll briefly discuss the two largest such markets.

In California, most security professionals must be W-2 employees. The state restricts 1099 contracting and enforces penalties for misclassification. Even if the professional prefers 1099 work, the company may be legally prohibited from offering it. Union involvement, high taxes, and aggressive labor enforcement only add to the complexity.

New York is similarly rigid. In addition to W-2 classification requirements, New York law imposes tight constraints on subcontracting, licensing reciprocity, concealed carry, and work-site insurance coverage.

How Lorica Will Simplify Compliance for Everyone

Lorica is building a compliance framework to help professionals and clients navigate state and local regulations more effectively. That means fewer mistakes, clearer contracts, and lower liability risk.

Key features will include:

1. Credential Gatekeeping. Professionals will not be able to accept jobs they aren't licensed or insured to perform. If a job requires a G License, LTC, or Level III Commission, the platform will filter accordingly.

2. Licensed Company Matching. In states like Florida and Texas, security professionals will need to operate under the legal umbrella of a licensed company. Lorica will facilitate those connections so everyone is covered.

3. Smart Contracts and Templates. Our contract generation and review features will adapt to state-specific rules. Whether a job requires special clauses for insurance, firearms, or subcontracting, Lorica will help both parties get it right the first time.

4. Insurance Documentation. Companies will need to upload proof of insurance, including firearms riders if required. Lorica will flag expired or missing documents, reducing the risk of invalid coverage. The platform will also validate that companies hold the appropriate mix of coverage – general liability, occupational accident or workers' comp (where applicable), and errors and omissions coverage for firms managing contracts.

5. Compliance Visibility. Principals and clients will be able to see exactly who is on a contract, what their credentials are, and which entity holds liability. That level of visibility is uncommon and will reduce risk and ambiguity.

Conclusion: Clarity Creates Confidence

Private security work demands discretion, professionalism, and trust. But behind every detail stands a web of state rules that define who can work, how they can be paid, and what coverage is required.

Those rules are often difficult to navigate, especially for small companies or professionals operating across multiple jurisdictions. Lorica is about to simplify that process.

We’ll launch in business-friendly states with clear regulations, and we’re building features that will make compliance easier for everyone. In time, we plan to expand to other states. But we’ll only do so when we can ensure professionals, companies, and clients can all work with confidence.

If you're ready to build a more scalable, more compliant future for private security, join us.

Security professionals can apply to join Lorica’s waitlist or obtain a referral link from a Lorica Ambassador who is already on the waitlist. Security companies do not need a referral to join.