$2M Professional Liability (E&O) Insurance for Private Investigators

A $2M Professional Liability (E&O) requirement means your policy must pay up to $2M per claim, which a $1M/$2M policy usually does not meet. This guide is for private investigators whose client contract asks for $2M.

What does a $2M requirement mean for private investigators?

Professional Liability (E&O, short for Errors and Omissions) covers claims that your investigative work caused a client a financial loss. Some investigators buy it in a combined General Liability and Professional Liability package. A $2M clause might read like this:

• Per claim: the most the policy pays for one claim. Here, $2M.
• Aggregate: the most the policy pays for all claims in one policy year. Here, also $2M.
• The common mix-up: a $1M/$2M policy pays only $1M per claim. It usually will not meet this clause. See Professional Liability limits explained.
• Claims-made: Professional Liability almost always covers claims made and reported while the policy is active, for work done on or after the retroactive date (the earliest date of work your policy covers).

Who asks private investigators for $2M?

Many investigators work under $1M requirements (see $1M Professional Liability for private investigators). $2M may show up when the stakes or the client are larger:

• Insurance companies hiring you for claims or fraud investigations, often through a vendor panel with set insurance terms.
• Large law firms using you for litigation support, witness interviews or asset searches.
• Large companies ordering background checks, due diligence or internal investigations.
• Government agencies, where the limit is often set in the bid documents.

How is $2M built?

At $2M, the limit is usually one primary policy (the policy that pays first) written at $2M per claim. If you buy a combined package, check that the Professional Liability part, not just the General Liability part, shows $2M. Some buyers use a $1M primary policy plus a $1M excess layer (extra coverage that sits on top) that follows form (uses the same terms). If so, confirm with the client that primary plus follow-form excess meets the clause.

A commercial umbrella almost never covers Professional Liability (see umbrellas and Professional Liability). Clients also usually cannot be added as an additional insured (covered under your policy) on Professional Liability. A certificate of insurance (a one-page proof of coverage) gives the client no rights under the policy. If your contract asks for additional insured status, send Morrow the clause.

What will underwriters ask for?

An underwriter is the person at the insurer who decides whether to offer coverage and on what terms. For a $2M investigator policy, they often ask about:

• Your service mix: surveillance, background checks, insurance claims work, legal support, corporate work and any domestic or family cases.
• Whether any staff carry firearms or do security or executive protection work.
• Use of subcontracted investigators, and whether they carry their own insurance.
• How you handle personal data, database searches, GPS tracking and recorded evidence.
• Revenue by client type, written contracts, prior claims and your current retroactive date.

What affects the cost?

• Type of work. Pricing varies by the mix of work. Domestic and family cases, surveillance, and background or consumer-report work are often looked at closely. Armed or security work can affect the General Liability side more.
• Revenue and client size. More revenue and larger clients usually mean larger possible losses.
• Subcontractors. Heavy use of outside investigators, especially uninsured ones, can raise the price.
• Policy terms. A higher retention (the amount you pay on each claim before the policy pays) usually lowers the premium.

Frequently asked questions

I carry $1M as a private investigator. How do I get $2M Professional Liability?

Send Morrow your current policy and the contract clause, and Morrow can request quotes for a $2M policy. Morrow can ask carriers to keep your retroactive date and prior acts coverage (cover for work you did before the new policy starts) where the market allows. Many people keep their current policy in force until the new one starts so there is no gap. Report anything that could become a claim to your current carrier before that policy ends.

What claims could lead a client to ask private investigators for $2M?

Clients usually worry about errors in reports, missed findings and mishandled evidence. Some hypothetical examples: a background report mixes up two people with the same name and a candidate is wrongly turned down. An asset search misses property, and a law firm's client says it settled for too little. Surveillance evidence is thrown out because of gaps in how it was handled. A subject alleges invasion of privacy, which may fall under the General Liability or Professional Liability part, or be excluded, depending on the wording.

Does my General Liability cover mistakes in my investigation reports?

Usually not. General Liability covers bodily injury and property damage, and some personal injury claims. Mistakes in your findings or advice are what Professional Liability is for.

What happens to Professional Liability claims after I stop investigating for a client?

Claims about past work can still arrive years later, and they are usually covered only if you have an active policy when the claim is made. A claim first made after your policy ends is generally not covered unless you buy an extended reporting period (a "tail") or a new policy keeps your retroactive date.

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.