Detective Agency Insurance Policy Information
Detective Agency Insurance. Detective or investigative agencies search for and develop facts and information for their clients, which may include individuals and businesses. Most states require detective agencies to be licensed.
While some carry firearms, they do not have police authority. The agency may perform general investigative services or specialize in such areas as child custody disputes, pre-employment background checks, relationship conflicts, or missing persons.
While much of their work is simply gathering information, they may be hired to obtain evidence, such as interviews or photographs, for civil lawsuits, or work with insurance adjusters to investigate suspicious claims. They may serve summons or subpoenas for courts, locate debtors, or bail jumpers who run off, or work undercover to document suspected criminal activity.
From gathering information to pinpointing the details about a particular individual, group of people, or even entire organizations, as a detective, you perform a variety of duties for the clients that secure your services.
There's no doubt that your work is important, but there are a number of risks associated with owning and operating a private investigations firm.
In order to safeguard your business, your clients, your staff, and yourself, having the right type of insurance in place is crucial.
Why do detective agencies need insurance? What policies do detectives need and how much coverage should they carry? Find out more about detective agency insurance below.
Detective agency insurance protects your investigative services business from lawsuits with rates as low as $57/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked detective agency insurance questions:
- What Is Detective Agency Insurance?
- How Much Does Detective Agency Insurance Cost?
- Why Do Private Investigators Need Insurance
- What Type Of Insurance Do Private Investigators Need?
- What Does Detective Agency Insurance Cover & Pay For?
What Is Detective Agency Insurance?
Detective agency insurance is a type of liability insurance that is specifically designed for detective agencies and private investigators. This insurance provides protection for the agency and its employees against financial loss or damage that may result from claims made by clients, witnesses, or other third parties.
The insurance may cover a wide range of risks, including errors and omissions, defamation, invasion of privacy, and other legal issues that may arise from the activities of the agency.
Detective agency insurance is an important consideration for private investigators and detective agencies, as it helps to protect their financial stability and reputation in the event of a lawsuit or other legal dispute.
How Much Does Detective Agency Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small detective agencies ranges from $57 to $79 per month based on location, size, payroll, sales and experience.
Why Do Private Investigators Need Insurance?
The professionals within your detective agency are specially trained to provide surveillance, conduct searches, and offer protection for the clients that hire you; among other services that you may provide.
You acquire personal information and share it with your clients, you work undercover, you deal with the public, and you are constantly exposed to various threats.
What would you do if someone filed a lawsuit against you, claiming that you were harassing them? What if a client stated that you failed to deliver the services you said you would provide? What if a client or a vendor tripped, fell, and sustained an injury while visiting your office? What if a member of your staff was injured while performing work-related duties?
As the owner and operator of the detective agency, you would be held liable for all of these scenarios, which means that you would also have to pay the expenses that are associated with them; medical bills, property damages, legal fees, etc.
Having to pay for these expenses out of your own pocket could put you in a serious financial predicament that could potentially lead to bankruptcy; however, if you have the right type of insurance coverage, your insurance company would pay for these costs, which means that you will avoid the repercussions of such exorbitant expenses.
In other words, detective agency insurance protects you from paying the astronomical fees that are associated with the risks of running a business like yours.
What Type Of Insurance Do Private Investigators Need?
The type of insurance coverage that a detective agency needs will vary from organization to organization. The protections your agency needs depend on a variety of factors, including the specific services you offer, where your agency is located, whether or not you employ a staff, and what type of clients you work with.
However, there are specific types of coverage that all detective agencies should have in place, including:
- Commercial General Liability - This type of coverage protects you from any third-party bodily injury and property damage claims that may be filed against your agency. For instance, if a vendor slips and falls while making a delivery to your office, sustains an injury, and files a lawsuit against your business, if you have a commercial general liability policy, your insurance provider will cover the cost of any medical care the individual needs, as well as any legal fees that may be associated with a lawsuit.
- Commercial Property - Whether you lease or own the property that you operate your detective agency out of, you'll want to have a commercial property policy. This type of insurance protects the commercial space, the items within it, and some of the exterior surfaces and structures from various types of risks, including storm, fire, and water damage, vandalism, and theft. If someone breaks the windows on your commercial property and spray paints graffiti on the walls, commercial property insurance will help to cover the cost of any necessary repair or replacement fees.
- Workers Compensation - If you employ a staff, even if it's just a handful of people, you'll also need to carry a workers comp policy in most US states. This coverage assists with any medical care that your employees may need if they suffer a work-related accident or illness. It will also cover a portion of the employees' lost wages while recovering, and can even pay for training in a new field, if he or she is unable to return to the previous position held.
Private Investigator's Risks & Exposures
Premises liability exposure is very limited at the office location due to lack of public access. The primary exposure is off site. Depending on services offered, potential for causing either bodily injury or property damage may be considerable. Investigative operations may place workers in a trespass situation. While legal and permissible information gathering is important, the agency must be careful not to infringe on the lawful rights of others.
Background checks, monitoring, and supervision of all employees are required. Personal injury exposures include breach of confidentiality, libel, slander, trespass, invasion of privacy, and unlawful detention. These often fall under the professional liability coverage.
Professional liability exposures vary with the services offered. Where only research is involved, the hazards are minimal: the detective obtains the required information (current address, prior business activity, lawsuits or criminal record), and provides it to the client.
The exposure may be severe in cases of relationship or child custody disputes, tracking down debtors or bail jumpers, and similar investigations. In these cases, the detective may serve as a witness in court. Any inaccuracies or failure to document adherence to legal and professional standards may have serious consequences. If force or threat of force is used, the personal injury hazard, in addition to potential invasion of privacy risks to the client, may also carry with it the assertion by alleged perpetrators of wrongful detention or unreasonable use of force.
If the investigator carries firearms, all federal, state, and local statutes must be followed. Training, supervision, and monitoring are crucial. There should be a written contract with each client explaining services and offering advice. These agreements must be signed by the client, including acknowledgments of services that were recommended and not taken.
Workers compensation exposure can be very high. If most of the work is done in the office and on computers, potential injuries include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma that can be addressed through ergonomically designed workstations. Off-site, the hazards become more serious as detectives are working in unfamiliar environments. Detectives often work alone in dark or high-crime areas.
Check-in procedures, instruction, and training on how to handle emergency situations are all important to review. Any firearm use by employees must be permitted only after there is extensive training and periodic recertification. Without firm procedures regarding firearm ownership, handling, and storage, hazards may increase dramatically. Any specialized work, such as chartering aircraft or watercraft, significantly increases hazards in the workers compensation and liability areas.
Property exposures are generally limited to those of an office, although there may be some vehicle storage. Ignition sources include electrical wiring, heating and air conditioning systems. Hazards arise from the storage of photos and records, which may be in paper or electronic format. Firearms and electronic equipment can be targeted by thieves. Appropriate security controls should be taken including physical barriers to prevent access to the premises after hours and an alarm system that reports directly to a central station or the police department.
Crime exposure may arise from employee dishonesty, including theft of customers' property as detectives often have open access to customers' premises. Hazards increase without proper background checks and monitoring procedures.
Inland marine exposures consist of accounts receivable if the agency offers credit, computers, mobile equipment, and valuable papers and records for customers' and surveillance information. Mobile equipment includes surveillance equipment, radios, base station, walkie-talkies, and other items the investigators carry with them or in their vehicles. These can be damaged by fire, theft, wind, collision, or overturn. All equipment must be secured and locked up when not in use. Hazards may increase in the absence of procedures to ensure proper accounting of all equipment.
Business auto exposures can be extensive during investigations, particularly while traveling to and from information sources. If company vehicles are supplied for use, there should be written procedures in place regarding personal use by employees and their family members. All drivers must be licensed with acceptable MVRs. All vehicles must be well maintained with documentation kept in a central location.
What Does Detective Agency Insurance Cover & Pay For?
Detective agencies, like any other business, may face various lawsuits due to the nature of their work. Some common reasons for lawsuits against detective agencies include:
Breach of privacy: Detective agencies may be sued for violating an individual's privacy rights by obtaining information illegally or through unauthorized means. Insurance can help by providing coverage for legal defense costs and any settlements or judgments resulting from the lawsuit.
Negligence: If a detective agency fails to perform its duties with due diligence and care, it may be sued for negligence. Errors and Omissions (E&O) insurance can help by covering the legal expenses and any damages awarded to the plaintiff as a result of the detective agency's negligence.
Defamation: Detective agencies may face defamation lawsuits if they share false information that damages an individual's reputation. E&O insurance can help cover the costs of defending against such claims and any resulting damages awarded to the plaintiff.
Trespassing: Detective agencies may be sued for trespassing if they enter private property without permission while conducting investigations. General Liability insurance can help cover the legal costs and damages arising from such lawsuits.
Employee misconduct: If an employee of a detective agency engages in unethical or illegal behavior while on the job, the agency may be held responsible. Employment Practices Liability Insurance (EPLI) can help cover the costs of defending against such claims and any resulting damages.
Bodily injury and property damage: Detective agencies may be held liable for injuries or property damage that occurs during the course of an investigation. General Liability insurance can help cover the legal costs and any damages awarded to the plaintiff in such cases.
Contract disputes: Detective agencies may face lawsuits over contract disputes with clients, such as failure to fulfill agreed-upon services or breach of contract. E&O insurance can help cover the legal costs and any damages resulting from these disputes.
For each of these examples, insurance coverage can help protect detective agencies from the financial burden of lawsuits. It's essential for detective agencies to work closely with an insurance provider to ensure they have the appropriate coverage for their specific needs and potential risks.
Commercial Insurance And Business Industry Classification
- SIC CODE: 7381 Detective, Guard, and Armored Car Services
- NAICS CODE: 561611 Investigation Services
- Suggested Workers Compensation Code(s): 7720 Police Officers & Drivers
7381: Detective, Guard, and Armored Car Services
Division I: Services | Major Group 73: Business Services | Industry Group 738: Miscellaneous Business Services
7381 Detective, Guard, and Armored Car Services: Establishments primarily engaged in providing detective, guard, and armored car services. Establishments primarily engaged in monitoring and maintaining security systems devices, such as burglar and fire alarms, are classified in Industry 7382.
- Armored car service
- Detective agencies
- Dogs, rental of: for protective service
- Fingerprint service
- Guard service
- Investigators, private
- Lie detection service
- Polygraph service
- Protective service, guard
- Security guard service
Detective Agency Insurance - The Bottom Line
Protecting your private investigation with the right type of insurance is crucial for your overall success. To find out exactly what type of detective agency insurance you need and how much coverage you should have in place, speak with a reputable insurance broker who knows your business.
Additional Resources For Professional Services Insurance
Get informed about small business professional services insurance, including Professional liability, aka errors and omissions (E&O insurance), that protects your business against claims that a professional service you provided caused your client financial loss.
- Accounting
- Actuaries
- Answering Service
- Architects
- Armored Car
- Attorney Lawyer
- Auctioneer
- Auditor
- Background Music Services
- Bookkeeping
- Business Consulting
- Chemical Engineers
- Civil Engineers
- Claims Adjuster
- Commercial Laundries
- Commodity Broker
- Corporate Wellness
- Couriers
- Court Reporter
- Credit Bureaus
- Debt Collection Agency
- Draftsman
- Detective Agency
- Diaper Services
- Electrical Engineering
- Engineering
- Environmental Consultant
- Executive, Career & Life Coaching
- Executive Search Firm
- Expert Witness
- Financial Planner
- Financial Services
- Funeral Directors
- HR Consultant
- Inspection Bureaus
- Insurance Agents & Brokers Insurance
- Interpreter
- Mediator - Arbitrator
- Medical Billing
- Music, Drama & Dance Therapy
- Notary
- Office Machine Repair & Maintenance
- Piano Tuners
- Project Management
- Safety Consultants
- Speakers Bureaus
- Stockbrokers
- Surveyor
- Tax Preparer
- Temporary Staffing
- Title Abstractors
- Valet Parking
- Specialty Consultants
- Specialty Service Business
The professional services industry, which includes occupations such as lawyers, doctors, accountants, and architects, often deals with sensitive and complex issues that carry a high risk of liability. These professionals are expected to provide their clients with expert advice and guidance, and any mistakes or oversights can result in significant financial consequences for both the client and the professional. This is where insurance comes into play.
Business insurance provides protection against the financial repercussions of potential mistakes or accidents that may occur while providing professional services. For example, a lawyer may make an error in their legal representation that leads to a financial loss for their client. Without insurance, the lawyer would be personally responsible for covering the cost of this loss. Insurance helps to protect professionals from these types of financial burdens and allows them to focus on providing high-quality services to their clients.
In addition to protecting against financial losses, commercial insurance can also provide legal defense for professionals facing legal action as a result of their work. This can be especially important for professionals in high-stress or high-risk fields, such as doctors or architects, who may be at a higher risk of being sued for professional negligence.
Overall, the professional services industry needs insurance to protect against financial losses and legal action, ensuring that professionals can continue to provide high-quality services to their clients without the added stress and burden of potential financial consequences.
Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Professional Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Money and Securities, Special Floater, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.
