Working as a private investigator involves various types of risk, as any professional in the industry will know. An operator must take care not to break the law during the execution of their duties and must also monitor risk to their personal safety. Besides these common concerns, an individual private investigator or specialist firm also faces less obvious legal risks. An investigator might be asked to monitor a person or business and then make a recommendation to a client. Should it then turn out they made the wrong conclusions and gave the wrong advice, they could actually face being sued by a client. Private investigator indemnity insurance is designed to cover a policyholder if they face such a legal claim.
This kind of cover is designed to kick in following a mistake, omission, or act of negligence. The idea behind this type of insurance is to pick up any legal bills that may arise from defending such a case. Levels of cover are typically available – so a firm can choose for legal bills up to £50,000 or £1 million to be covered, for example. Indemnity insurance policies will often go further than covering straightforward mistakes. They will typically also cover an investigator’s legal costs if they face a case for breach of confidence or breach of copyright. If an agency employs a number of people, cover will also normally be provided for any action resulting from a worker’s act of dishonesty – should one of them steal something from a client or subject, for example.
Many insurers act quickly on indemnity claims – and this can be important if a business is to go on running otherwise as normal. Any delay in dealing with a legal claim can result in further problems and disruption. Uncertainty can take attention away from other clients and can result in an adverse affect on the business – therefore an insurer will typically look to step in quickly to process and respond to a claim. If a case ends with a compensation award for the complainants, a private investigator indemnity insurance policy will also usually cover this too – again up to a limit.
As anyone who has faced a legal claim will already know, a long period can elapse between an event and the actual lodging of the legal claim. This is why most indemnity insurers factor in extras or as-standard features to cover this. ‘Retroactive’ cover will provide protection for a claim which arrives relating to something which may even have happened before the policy itself was activated. ‘Run off’ cover is designed to provide a period of protection after a private investigator retires or stops trading. This can also be used when a policyholder changes from one insurer to another.
Although it might be traditionally associated with accountants and architects, indemnity insurance is now taken out by many professionals who make recommendations and provide advice for a living – a private investigator indemnity insurance policy will therefore be tailored to provide protection for the relevant freelancer or whole company.