Private Detective Business Insurance
Getting business insurance for your private detective business is essential.
Private detectivies need to be insured against things like threats to claims of invasions of privacy, negligence, and harassment or stalking.
For example, your business could face a lawsuit if an individual feels they have been intimidated or harassed by one of your private detectivies.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Private Detective Business
General liability insurance is — generally speaking — one of the most important insurance policies for private detectivies.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
Other beneficial policies that might be worth looking into for your private detective business include:
- Professional liability or errors and omissions insurance: This policy provides coverage for any errors or omissions made by the detective while performing their duties that result in financial loss to their clients.
- Commercial auto insurance: Provides protection against bodily injury and property damage that may arise from an accident involving a PI's vehicle.
- Cyber liability insurance: Protects your private detective business against any costs that may have resulted from data breaches or other cyber incidents.
Private detective businesses have two options for purchasing business insurance: traditional brick and mortar agencies and online insurers.
- Traditional brick and mortar insurers: Agencies with physical locations that are often viewed as having a more personal touch due to the face-to-face interactions they offer with insurance professionals.
- Online insurers: The major advantage of using an online insurer is cost savings. By operating entirely on digital platforms, these companies save on overhead costs such as rent, utilities, and salaries for agents or brokers. They also make comparing insurance products easier.
While the former has been the preferred choice of many individuals, it has become increasingly clear that online insurers offer a great alternative.
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Cost of General Liability Insurance
The average private detective in America spends between $400-$700 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a private detective business to other professional industries using the graph below:
Several factors will determine the price of your policy. These include your:
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Common Situations That General Liability Insurance May Cover for a Private Detective Business
Example 1: A potential client is meeting you at your office when she slips and falls on ice outside your entryway and breaks her wrist. Your general liability policy will likely cover the cost of treating her injuries.
Example 2: You are visiting the home of a client to discuss the details of a case. He is cooking in the kitchen as you ask him questions. You accidentally bump into him as he is carrying a pot of boiling water, and the water spills and burns him. He sues you for his injuries. Your general liability policy would pay for your legal defense and for a settlement if one is required.
Example 3: A competing private detective has accused you of speaking badly about him and his business to multiple potential clients and is suing you for slander. Although you are certain that this is untrue, you still need to defend yourself legally. Your general liability policy will pay for your legal defense.
Other Types of Coverage Private Detective Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:
Professional Liability Insurance
A professional liability insurance policy designed for your private detective business will help shield you against liability related to your work. It will cover negligence claims due to mistakes or failure to perform. If you are sued for either, your policy will cover your legal costs and the cost of a settlement if necessary.
Commercial Auto Insurance
Any automobile you use primarily for business should be covered by commercial auto insurance. Your policy will ensure that you meet the legal requirements of your state. If you are found to be at fault in an accident, it will help pay to repair or replace your vehicle and any other vehicles involved, as well as any related medical expenses.
Commercial Umbrella Insurance
An umbrella policy will pick up where a general liability policy leaves off. For example, if you were to lose a major lawsuit and the damages you were required to pay exceeded your general liability limits, then the umbrella policy would cover the remaining costs until its limits were reached.
Home-Based Business Insurance
If your business is run out of your home, there is a chance that your homeowner’s policy won’t cover you for accidents resulting from your business activities. A home-based business insurance policy would cover such accidents so you are not left paying for them out of pocket.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your private detective business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Private Detective Business Insurance FAQ
Can I buy business insurance online for my private detective business?
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
What is included in a business owner’s policy?
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
What is the difference between business insurance and general liability insurance?
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start a private detective business?
Yes, it is imperative that you secure business insurance before starting a private detective business.
Your detectives will deal with sensitive information and carry out tasks that could potentially result in legal action or liability claims against your business. This is why having the right insurance coverage is essential to protecting yourself and your clients.
Will insurance protect my private detective business from everything?
Not necessarily. Certain exceptions may be written directly into your private detective business insurance policy, and some perils may be entirely uninsurable.
Do I need business insurance if I already have an LLC?
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.