Insurance for Private Investigators

• March 24, 2021
• by Stephanie Irvine
• Articles

Private investigators operate a business that, while unique in many aspects, is still a traditional business. There are many reasons why private investigators should carry insurance, but it boils down to risk. Is a PI willing to risk the potential for financial harm to themselves and their business in the event they are sued? Is a PI financially prepared to incur the costs that could stem from a lawsuit or accident? If the answer is no, private investigators should consider obtaining insurance. Let’s take a look at what that means for private investigators.

Insurance basics: general & professional liability coverage

For businesses, many will take out policies that cover bodily harm and operational errors. This means that private investigators, whether operating independently or as an agency, should consider obtaining both general liability and professional liability coverage. General liability could cover a private investigator in the event one of the agents (or the agent/owner) is harmed while working a case as it covers harm to person and property. Additionally, because private investigators conduct business within their office and in the field, they should ensure that they get a policy that covers them in both situations. Professional liability coverage is what protects investigators from incurring massive costs stemming from a lawsuit relating to something other than personal harm or property damage.

Understanding costs

Cost is a big reason that many individuals and business owners forgo certain types of insurance. At the end of the day, overhead cost is something that is necessary to keep the business operational and it is highly encouraged for private investigators to consider insurance as one of those necessary business costs. Think about what could happen if a private investigator is sued but does not have insurance. That investigator would be liable for the costs associated with their defense even if the lawsuit is dismissed in the end. If the investigator had insurance, they would simply pay the deductible and the insurance company would incur the costs of the lawsuit. No business owner ever thinks they will become a victim of a frivolous lawsuit until they are served with one. By maintaining the proper insurance, the investigator is protecting themselves and their company from harm that could potentially close their business.

Types of insurance

There are many different types of policies that private investigators should evaluate to determine the appropriate coverage. For example, whether or not the investigator owns an agency or operates solo will impact what coverage is needed. Similarly, if a PI business has subcontractors or employees, that employee designation can also change the type of insurance that is needed. Property insurance, automobile insurance, and data protection/cyber insurance are all types of insurance that are common among investigators. Private investigators should assess their needs with their insurance agent to determine the types of insurance they need for their specific business.

Learn more with your agent

PInow does not sell insurance, nor are we affiliated with any insurance agency. Our goal is to provide private investigators with useful knowledge that will help them and their businesses flourish. We recommend that investigators have a conversation with their business lawyer and insurance agent to determine what policies are right for them.