7 Things You Need to Know about Private Investigator Bonds
- November 11, 2014
- by Duke Revard
- Business Tips
- Business Tools
While this list is certainly not comprehensive on all that could be said of Private Investigator Surety Bonds…it’s probably all you’ll ever care to know.
Private Investigator Bonds = License and Permit Surety Bonds
1. Private Investigator Surety Bonds are considered “License & Permit Bonds”
This simply means that private investigator surety bonds are required by cities, counties, or the state to provide consumer protection condition for a licensure as a private investigator.
2. Bond = Insurance or Not?
Surety bonds are not insurance, but they are often sold by licensed insurance agents. Is that confusing enough? The primary difference between a private investigator bond and, say, general liability insurance is this: a surety bond exists to protect others from the negligent acts of a PI, whereas general liability insurance would protect the PI from others. Said another way, a PI with a surety bond can never file a claim on his/her own bond.
Private Investigator Bonds a generally very affordable regardless of credit history
3. How Much Does a Private Investigator Bond Generally Cost?
Private investigator bond premium amounts generally run 1%/1000 and don’t vary much from state-to-state. You should expect to pay around $100 per year for a bond. However, I often see bonds go for less than this. I regularly see private detectives in New York, for example, receiving quotes on a 2 year bond for only $75. On the whole, the cost of a private investigator bond is very manageable business expense.
4. Which States Requires Private Investigator Bonds and for What Amount?
Private Investigator Agencey
Protective Services Agency
Private Security Agency
$10,000
$10,000
$10,000
Private Security Agency
Bail Enforcement Agency
$5,000
$10,000
Private Investigator Bond (Resident Renewal)
Private Investigator Bond (Non-Resident)
Investigative Assistant
Contract Security Agency
$10,000
$50,000
$20,000
$10,000
Watch Guard/Patrol Agency
$5,000
Security Guard Agency
Burglar Alarm System Contractor
$25,000
$25,000
Security Guard Agency
$50,000
Private Investigator Agency
$5,000
Watch Guard/Patrol Agency
$10,000
Private Investigator Bond (Armed)
Security Guard (Unarmed)
Security Guard (Armed)
$10,000
$5,000
$10,000
Registered Operative
$5,000
Security Guard Agency
$10,000
5. The Top Ten States by Net Written Premium
The population density, number of licensed PIs and bond amounts are all contributing factors to the top ten premium generating states for private investigator bonds.
Here is a list of the top ten…
- New York ($257,733)
- Oklahoma ($227,544)
- New Jersey ($119,714)
- Massachusetts ($99,785)
- Pennsylvania ($89,265)
- District of Columbia ($81,265)
- New Hampshire ($72,664)
- Arizona ($68,055)
- South Carolina ($67,133)
- Georgia ($65,792)
6. Where Can Private Investigators Go to Purchase Surety Bonds?
Private investigators can purchase surety bonds through their local insurance agent or through a surety specialist. The primary factors to consider are price and speed. Some Insurance agents will add an additional fee to the surety bond premium amount to make the processing time worth their while. Many agents have little experience with one-off bond types and may be slow to process your request. Surety bond specialists often have systems in place to automate the process and generally will not charge any additional fees. For this reason, most private investigators are better served to purchase their surety bond from a surety specialist.
PIs Should Consider Price and Speed when choosing a Surety Bond Provider
7. What Does a Typical Private Investigator Bond Claim look like?
A surety bond is a written agreement issued by a surety company that provides for monetary compensation in the event that the principal (e.g. Private Investigator) fails to adhere with the state obligations associated with a private investigator license.
Let’s break this down further into the 4 Basic Components of Surety Bond Definitions...
1. The Principle
This is the person who is required by law to obtain a Surety Bond. (e.g. You the Private Investigator)
2. The Obligee
The Consumers in a given State who are protected by the PI Bond and can file a claim if financial damages are incurred.
3. The Claimant
The obligee, also known as the claimant, is the party that has the right to make a bond claim.
4. The Surety
The insurance/surety company who issues the guarantee to third parties of the performance of the private investigator in discharging his or her responsibilities to the obligee.
About the Author
Duke Revard is the Chief Marketing Officer at Surety Solutions, LLC and the currently the Chair NetVU Communications Committee. Duke consults with insurance agents and small business owners on how to maximize their marketing efforts and has written two e-books The Definitive Guide to Surety Bond Marketing and The Essential Tech Toolkit for Insurance Agents and Small Business Owners both of which are available as a Free Download. He blogs regularly on the Bonds Made Easy and The GROW Program.