How to Get Insurance for a Private Investigation Firm

If you open a private investigation firm, you're going to need at least one and quite possibly several specialized forms of insurance to protect your investment. The exact coverage you'll need depends upon the number of employees in your firm and the nature of the work you do.

Difficulty: Easy

Instructions

Identify the Types of Insurance You Need

1. Expect that you'll need to get motor vehicle insurance, if your private investigation firm owns and/or operates its own fleet of vehicles for use on the job.

2. Consider getting "key person coverage" if your firm relies upon a single important individual to survive. If your firm would be devastated and forced to close upon the injury or death of a key individual, you should strongly consider this type of insurance, especially since private investigation can be physically risky.

3. Get trade credit insurance, if your private investigation firm is geared towards serving individual members of the public (as opposed to companies, corporations or contracted sponsors). This will prevent your business from being damaged financially if your customers fail to or cannot pay you what they owe.

4. Consider public liability insurance an essential part of any complete plan. This type of insurance will protect you in the event that your business activities result in the injury, death or damage to the physical property of your clients. For example, if your firm exposes a cheating spouse to a client and the spouse damages the client's property as a result, you will be insured against the liability.

5. Get a professional indemnity insurance package. This is another absolutely essential form of insurance, which protects you against third-party claims of negligence and liability for death, injury or loss. Make sure that all your employees are covered under the professional indemnity insurance coverage.

Find the Best Insurance Rates

6. Stay informed. Follow a publication such as "Business Insurance" magazine to stay abreast of trends in the insurance marketplace (see Resources below). You'll also learn the names of the major players in the business insurance industry, and what niche each company fills

7. Contact each company you're considering and arrange a consultation. Make sure each company knows that they will be entering into a competitive bid for your business.

8. Find a balance between the price of the coverage and its comprehensiveness. You'll have to pay more for better, more complete coverage, but it could well be worth it, particularly if your firm engages in potentially risky investigations involving criminal activities and private parties (as opposed to businesses or corporations).

Tips & Warnings

• Your insurance package should cover the basics as well as items specific to the practice of private investigation. Make sure you're protected from things like fire and building damage in addition to employee or liability coverage.
• The firm's owner or managing director may be held personally liable for any financial responsibilities above and beyond insurance coverage in the event of a calamity. It's wiser to invest in comprehensive insurance coverage, especially in a potentially volatile field like private investigation, than to be left paying out of pocket when something goes wrong.

Resources

• Business Insurance magazine for up-to-date industry info and trends.

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