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Of the remainder, many are guard agencies providing ancillary services for their security clients and others are part-timers working less than 20 hours a month.
Probably 90 percent of these agencies carry no general comprehensive liability insurance. Part-timers find it difficult to justify paying a minimum premium of $3,000 to $4,000 when they
anticipate annual sales of $10.000. Bargain-priced agencies don't have the margin for this high overhead item.
Although most P.I.s carry workers' compensation insurance, attorneys should be aware that self-employed P.I.s working as proprietors are excluded from coverage. Thus, the certificate provides an illusion, not a reality.
A bond is required for licensing. However, this is a license bond, not a fidelity bond, and is of little value to clients.
Knowing The Rules: An Example
Zeke, an eccentric old fellow, summoned the only three people he trusted to his deathbed: his attorney, his accountant and his private investigator. Handing each of them an envelope containing $ 10,000, Zeke explained that he had no heirs and intended to take his life savings with him when passed on. He instructed his three confidants to each toss their $10,000 into his grave before it was covered.
Zeke died the next week and at the burial his trusted colleagues were on hand to carry out his wishes. At the wake, the accountant confessed that since he charged a minimum fee of $3,000, be had deducted that amount from the $ 10,000. The attorney nodded solemnly, stating that her normal fee was one-third and she had deducted that amount.
The PI. stared at his companions aghast and then began denigrating them for their actions. "I deducted nothing," said the PI. "I put in the full 10 grand!"
The skeptical attorney pointed out that the P.I.'s envelope had seemed even lighter than the others as it fluttered into the grave.
"Well sure," explained the PI. "I wrote him a check!"
Many of the best investigators are unconventional and creative. But their creativity must stay within the current rules of the game. And these ever-changing rules are different on each case.
The P.I.'s Rules
The way most investigators keep up with the changing rules is through association membership. Michigan's two trade associations are the Michigan Council of Private Investigators and the Michigan Association of Private Detectives and Security Agencies. These groups stay on top of state and local issues, while the National Council of Investigation & Security Services monitors federal legislation. The National Association of Legal Investigators is another reputable national organization geared toward the needs of investigators specializing in plaintiff work.
Responsible investigators know the rules that apply in their business. Like everyone else, in a country where the population of attorneys is twice that of the state of Wyoming, investigators must have a good knowledge of the changing laws that apply to their work, or else be prepared to defend a costly lawsuit
For instance, those "super claimant videos" may not be so super if they were improperly filmed from private property - a felony. And that critical evidence obtained from the trash may prove less than an asset if the investigator's "dumpster diving" wasn't performed in a completely legal manner.
Too often, problems occur because of credit reports, which can be obtained legally for insurance purposes and employment purposes. Regardless of what some amateur investigators believe, this doesn't mean it's legal to run credit reports on insurance claimants and persons employed by a client. It means they can be obtained for insurance underwriting purposes and for the purposes of employing, promoting and (with restrictions) continuation of employment. An Ohio agency erred in the interpretation of the FCRA last year and a $20 million lawsuit was filed against the agency's client.
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