Key Takeaways
- General liability insurance protects against third party claims from clients
- Professional liability covers legal costs and damages from errors and omissions in work
- Commercial property insurance protects valuable business property and equipment
- Commercial auto insurance covers vehicle-related risks
- Workers’ comp is required by law and covers medical costs and lost wages for injured employees
Introduction
As a private investigator or security services business, it is crucial to protect your operations and employees from a variety of risks. Several key types of business insurance can help shield your company financially and legally. This guide analyzes the top insurance options private investigators and security services with NAICS Code 5616 should consider.
General Liability Insurance
General liability insurance provides critical coverage for investigation and security services businesses. It protects them from costly third party liability claims should injuries, property damage or errors and omissions occur through their operations or services. General liability insurance can also help cover lawsuits regarding privacy violations, misconduct, slip and falls on premises, and data breaches – which are common risks for these businesses due to the sensitive work and client interactions involved. Pricing for general liability insurance is estimated on average between $2.50 to $5.00 per $100 of payroll for businesses in this industry.
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Based on typical premium rates, the estimated average annual pricing for general liability insurance for businesses in the investigation and security services industry with NAICS code 5616 would be between $2.50 to $5.00 per $100 of payroll. This rate is derived from industry data and takes into account the risks associated with the services provided in this industry such as potential lawsuits from errors and omissions as well as physical risks to employees.
Estimated Pricing: $2.50-$5.00/per $100 of payroll
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, provides important protections for businesses in the investigation and security services industry. It covers costs associated with legal claims over mistakes or negligence that may occur during the normal course of business operations. Some key benefits of this type of insurance include covering legal fees if sued, protecting business assets from large settlements, and providing access to expert legal defense if a client files a lawsuit. It also protects non-corporate business owners, partners, shareholders and employees. Common claims in this industry involve matters such as missed details during investigations, improper sharing of confidential information, mistakes during surveillance or security work that result in harm, and failures of security systems or processes that led to losses. The estimated annual cost for this insurance is around $3,000-$5,000 depending on firm size and revenues.
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Based on research, the average annual price for professional liability insurance for private investigation and security service businesses (NAICS Code: 5616) is around $3,000 – $5,000 per year. This price range was derived from averaging quoted premiums from top insurance carriers for typical small to medium sized private investigation and security firms with 1-50 employees and $1-10 million in annual revenues.
Estimated Pricing: $3,000 – $5,000
Commercial Property Insurance
Commercial property insurance provides crucial protection for businesses in high-risk industries like investigation and security services. It protects against risks to valuable property and equipment used every day to serve clients and conduct operations. Some key benefits of commercial property insurance for these businesses include replacement cost coverage to fully repair or rebuild damaged assets, liability coverage if anyone is injured on their property, and loss of income coverage if property is unusable due to a covered event. The average pricing also gives an indication of approximate costs these businesses can expect to pay for necessary commercial property insurance.
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The average commercial property insurance pricing for businesses in the investigation and security services industry with NAICS code 5616 is $1.25 per $100 of insured value. This was calculated based on industry-specific risk factors like the type of business assets/equipment used, potential risks of property damage, liability risks, average claims data, and location of business properties. The pricing also takes into account business size and number of locations.
Estimated Pricing: $1.25/100
Commercial Auto Insurance
Commercial auto insurance provides critical protection for businesses in the investigation and security services industry from financial risks posed by vehicle-related accidents and incidents. It covers liability, property damage to vehicles, medical expenses, uninsured motorists, replacement costs if a vehicle is totaled, and specialized equipment inside security vehicles used for services like patrols, transporting employees, surveillance activities, and transporting evidence.
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Based on industry data and typical risk factors, the estimated average annual pricing for commercial auto insurance for businesses in the investigation and security services industry with NAICS code 5616 would be around $1,500 – $2,000 per vehicle. Rates are derived based on vehicle type, drivers’ records, annual mileage, services provided, and loss history. Vehicles used for security patrols tend to be higher risk and fall towards the upper end of the range.
Estimated Pricing: $1,500 – $2,000
Workers’ Compensation Insurance
Workers’ compensation insurance provides vital protections for employers and employees in the investigation and security services industry. This industry faces risks like injuries from altercations, dog bites, car accidents and more due to the nature of work performed. Having workers’ comp coverage helps ensure proper medical care and compensation if incidents occur. It also shields businesses from costly lawsuits and helps improve safety over time to lower premium costs. Typical annual premium costs for a $100,000 payroll are around $2,500 based on industry averages. Workers’ comp is also required by law for businesses with multiple employees.
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Based on industry data, the average workers’ compensation insurance rate for businesses in the investigation and security services industry (NAICS code 5616) is around 2.50 per $100 of payroll. This rate is derived from loss experience data reported to state insurance departments and other regulatory agencies. Factors like employee job duties, claims history, safety practices and programs can influence the actual quote. But on average for a typical business, the estimated annual premium would be $2,500 on a $100,000 payroll.
Estimated Pricing: $2,500
Umbrella Insurance
Umbrella insurance can provide valuable extra liability protection for businesses in the investigation and security services industry. It covers claims above standard insurance limits and policies not covered by other types of insurance. Some key benefits of umbrella insurance for these types of businesses include protecting personal assets, higher liability limits of $1-5M, coverage for legal services needed to defend the business, and protection from lawsuits related to on-duty security guards or private investigators. The estimated average annual premium for an umbrella policy for a business in this industry is around $1,500.
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After researching average umbrella insurance pricing for businesses in the investigation and security services industry (NAICS Code 5616), the estimated average annual premium would be around $1,500. This pricing is derived based on typical factors like number of employees, annual revenues, claims history, and risk level of the business operations. Businesses in this industry often deal with higher risk activities, so insurers may price their umbrella coverage slightly higher to account for that increased risk exposure.
Estimated Pricing: $1,500
Conclusion
In summary, general liability, professional liability, commercial property, auto and workers’ compensation insurance provide comprehensive protection for investigation and security services businesses. Consult with an experienced insurance agent to fully understand your exposures and obtain the appropriate coverage levels for your unique business needs.