$1M Professional Liability (E&O) Insurance for Private Investigators

For private investigators asked for $1M of Professional Liability, your contract decides the limit, so check whether it wants $1M per claim only or also a $2M yearly total before you buy.

What does a $1M requirement mean for private investigators?

Professional Liability (E&O, short for Errors and Omissions) covers claims that your investigation work caused a client or someone else a loss, such as a financial loss. A typical clause looks like this:

• Per claim: the most the policy pays for any one claim. Here, $1M.
• Aggregate: the most the policy pays for all claims in one policy year. Here, $2M. A $1M/$1M policy does not meet this clause.
• Claims-made: the policy covers claims made and reported while it is active, for work done on or after the retroactive date (the earliest date of work the policy covers).

Who asks private investigators for $1M?

You will often see a $1M request from:

• Law firms hiring you for witness interviews or asset searches.
• Insurers and claims administrators that send out surveillance and fraud work.
• Employers that order background checks or workplace investigations.
• Companies doing due diligence on a deal, vendor or executive.
• Government agencies. Larger programs may ask for $2M instead, so compare your contract with $2M Professional Liability for private investigators.

How is $1M built?

At $1M, the limit is usually one primary policy (the policy that pays first). Some private investigators buy a package that combines General Liability and Professional Liability. The Professional Liability part should show its own $1M per claim and the aggregate your contract asks for. If the two coverages share one limit, a large claim on one side can shrink what is left for the other.

Before you buy, check for a shared limit and for an exclusion for privacy claims tied to surveillance. Morrow can review your contract and policy and request quotes.

A commercial umbrella (extra liability coverage that sits above your other policies) almost never covers Professional Liability (see Does a commercial umbrella cover Professional Liability?).

Clients usually cannot be added as an additional insured (a party who gets some protection under your policy) on Professional Liability. A certificate of insurance only shows that your coverage exists. It does not extend coverage. If your contract requires additional insured status, check this before you buy.

What will underwriters ask for?

An underwriter is the person at the insurer who decides whether to offer coverage and on what terms. For private investigators, they usually ask about:

• Your license, the states you work in, and your years in business.
• Your mix of services, such as surveillance, background checks, process serving or fraud work.
• Your methods, including use of GPS trackers, recorded calls, pretext contacts (calls or messages where you do not state your real purpose), drones or social media research.
• Whether background reports are used for hiring or tenant decisions, and how you check accuracy.
• Subcontracted investigators: their licenses, contracts and insurance.
• How you store case data, plus prior claims, complaints, and your current policy and retroactive date.

What affects the cost?

• Type of work. Surveillance and background screening usually carry more risk than document research.
• Revenue and staff. More investigators and cases mean more chances for a claim.
• Subcontractors. Using outside investigators without written contracts or proof of their insurance can raise the price.
• Claims and complaint history. Prior claims or licensing complaints can raise the price or narrow options.
• Limit structure and terms. $1M/$2M usually costs more than $1M/$1M. A lower retention (the amount you pay on each claim before the policy pays) or defense outside the limit usually adds cost.

See also what drives Professional Liability cost.

Frequently asked questions

What kind of claim could a private investigator face on a Professional Liability policy?

A claim can come from an error or a complaint about your methods. Hypothetical examples follow. A background report mixes up two people with the same name, a job offer is pulled, and the applicant sues. Surveillance footage is lost, and a law firm says its case suffered. A person under surveillance says you invaded their privacy. Which policy responds depends on the wording.

Do I need Professional Liability if I already have General Liability as a private investigator?

Usually yes. General Liability covers bodily injury and property damage, plus some personal injury claims, and it usually excludes losses caused by your professional work. See Professional Liability vs. General Liability.

I have a $1M/$1M policy and the contract asks for $1M/$2M. What now?

Request new quotes for a $1M/$2M policy. Morrow can request quotes for you, with your retroactive date kept (so past work stays covered) where the market allows. Many people keep their current policy in force until a new one starts, so there is no gap. Check the dates against the policy wording. Report any known incident to your current carrier before that policy ends.

Are subcontracted investigators covered under my Professional Liability policy?

It depends on the policy. Some cover work done on your behalf by subcontractors. Others exclude it or require them to carry their own coverage.

This article is general information, not legal advice or a coverage determination. Coverage depends on the actual policy wording, carrier underwriting and your contract terms.