Private investigator insurance is a form of business insurance designed to cover a wide variety of risks that PIs take while working for attorneys, insurance companies, or public offices.
This specific type of work requires the private investigation agencies to have general liability insurance, along with several other optional insurance policies such as errors and omissions business insurance coverage or professional liability insurance for private investigators.
Private Investigator’s Insurance Options
As per the US Bureau of Labor Statistics, “Private detectives and investigators search for information about legal, financial, and personal matters.” While doing so, they run specific risks that are covered by special add ons to their private investigator insurance.
Private Investigator Insurance General liability
Like any other small business in the USA, private detectives often purchase a general liability policy. The most common of all insurance options covers risks of bodily injury and property damage to a third party or business while working on a task.
The amount of the general liability coverage may reach $2,000,000. Most business insurance providers have special private investigator liability packages with General Liability premiums starting from $500 per month.
Business Property Insurance
This type of insurance is for large and mid-sized private investigation businesses that own their office buildings. The coverage of this type of insurance extends to property damages caused by natural disasters as well as negligence
Private Investigator Insurance Auto liability
Private investigators must be mobile at all times. While driving, they may sometimes exceed the speed limit or take other risks on the road. To get themselves and their vehicles covered in case of road accidents, they often purchase Commercial vehicle insurance.
It protects you, no matter if you drive a service vehicle or your personal automobile for business. When buying a commercial auto insurance policy, make sure that it includes uninsured motorist coverage. It protects you if you get hit by an uninsured or unidentified motorist.
Workers’ compensation insurance
In some states, PIs are required to carry this coverage, regardless of whether or not you have employees. The workers’ comp insurance keeps you covered against job-related injury and covers your medical bills.
Because of a private detective’s job’s specificities, you may need to add assault and battery coverage to your workers’ compensation insurance. This coverage covers attorney fees and court expenses if you get charged with assault and battery.
Private Investigator Insurance – Professional liability insurance
Also known as Errors and Omissions insurance, this special liability insurance for private investigators covers claims against a private investigator for professional errors or critical omissions that they may have made while working on a case.
The professional liability insurance aspect of private investigator insurance is also called Professional indemnity insurance.
Because PIs give advice or offer professional services to other businesses, they need to protect themselves in the event that their advice proves misleading and causes financial loss to their client.
Professional liability insurance for private investigators can also help even if a customer decides to sue without there being any proven negligence or wrondoing.
Therefore, professional liability is an important part of a private investigator insurance policy that every private investigator should consider in their business insurance.
Surety bonds
A surety bond is a three-party agreement, by the force of which the surety guarantees the performance of a second party (the private detective) to a third party (the client). In all states where licenses are required, private detectives must hold a current and valid commercial surety bond.
Commercial surety bonds fall into five different categories, but private investigators mostly purchase Miscellaneous surety bonds. Before that, private investigators sign an indemnity agreement with a surety bond company or a designated insurer. The minimum surety bond amount is at least $10,000.
Private investigator’s job outlook
According to the Occupational Outlook Handbook of the US Bureau of Labor Statistic, you can expect to earn just over $50,000 a year as a private investigator before taxation, while the job’s average hourly rate is $24.30.
The Bureau predicts that the demand for private detectives in the United States is likely to grow by 8% over the next ten years. Most private detective businesses are registered as LLCs. If you’d like to start one, you can check out the LLC formation offers of ZenBusiness. Contact Zenbusiness now today and ask for a quote.
What licenses do private detectives need?
According to the prestigious website privateinvestigatoredu.org, private detectives are exempt from licensing in just five states: Wyoming, South Dakota, Mississippi, Idaho, and Alaska. However, the states of Wyoming and Alaska have local licensure requirements.
Private Investigator’s licensing procedures and requirements may vary from state to state, and so do the licensing authorities.
PI licensing authorities in the different states
Having established that private detectives must hold special licenses, let us now look at the different authorities that regulate private investigation businesses across the USA.
In some states like New Hampshire and New Jersey, private detectives are regulated by the state police. In California, these businesses are licensed through the Bureau of Security and Investigative Services with the Department of Consumer Affairs. Arizona’s Department of Public Safety controls private investigation businesses within the state’s borders.
In the state of Tennessee, private detectives hold licenses issued by the Private Investigation and Polygraph Commission. In contrast, their colleagues in North Dakota are licensed by the state’s Private Investigations and Security Board.
What Can a Private Detectives Do and Not Do?
Licensed or not, private investigation businesses must abide by state and federal laws. Here are some activities that they can perform while working on a particular case and others beyond their jurisdiction.
Are private investigators allowed to cross state borders?
This is an excellent question to ask, considering that private detective businesses are licensed at a state or local level. Private investigators may operate in other states as long as they observe the local legislation.
In general, private detectives are allowed to cross state borders while carrying out an investigation, as long as the operation began in the state where they are licensed. Suppose a private investigation business is licensed in a particular state. In that case, its license cannot be transferred to another state unless there is a valid reciprocity agreement between the two states.
The states listed below have entered into reciprocity agreements allowing private investigators to carry out interstate ops without holding separate permits.
- Oklahoma
- Florida
- Tennessee
- Georgia
- California
- Louisiana
- Virginia
- North Carolina
Private detectives can’t arrest individuals
While working on a task, private investigators do not have the right to detain the perpetrator. Instead, they can only contact the local law enforcers and inform them of the incident. If the state laws permit it, a private detective can sometimes perform a citizen’s arrest. In other words, they can detain the perpetrator until the police’s arrival.
Information gathered by private investigation agencies can be used in court
With certain restrictions, Private investigation agencies can collect evidence of illegal activity while conducting surveillance. If they find evidence that a crime has been committed, they can contact the local police department and report it.
The private detective usually hands over the evidence they have collected to the police officers to help them build their case. As long as it has been obtained legally, information gathered by private investigators is eligible for court use and can lead to a conviction.
Private investigators cannot impersonate law enforcers
Private investigators are not law enforcers and cannot carry badges that may look like the local police officers’ ones.
No trespassing
While on the job, private investigators can go anywhere in public, but they cannot trespass. This means that private detectives can’t enter a house or a building without permission. They can ask for permission to speak with the property’s owner. If, during the interview, the property’s owner changes their mind and asks the private detective to leave, the latter must do so immediately.
No wiretapping
State laws prohibit private investigators from collecting information using wiretapping. They can gain valuable information by listening in to a conversation. However, this is only allowed in states where only one-party consent is required. This means that private detectives can record a conversation they participate in unknowingly to the other party.
If, on the other hand, the private investigator is listening in to a conversation they are not part of, they have no legal right to record the participants in the conversation without their explicit consent. However, they can take photos of the participants and write down the information that they hear.
No long-distance photography
Private investigators are only allowed to take photos of the investigated individual or individuals while they are in public. Once the investigation subject enters their home or another person’s home, the private eye must discontinue shooting.
Any photos taken through a home’s windows by means of long-range optical devices are deemed illegal. Because private investigators often face invasion of privacy claims, they usually buy Invasion of Privacy insurance to get themselves protected from this professional risk.
PIs must respect the investigated individual’s online privacy
As people search engines are becoming more powerful and sophisticated every day, private detectives can carry out a thorough background check on someone without leaving their comfortable office.
However, under no circumstances are private investigators allowed to hack or hire hackers to break into the investigated individual’s social media accounts or electronic devices.