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A Guide For Private Investigators and PI Agencies

As of 2023, there were over 38,000 private investigators and detectives in the United States, according to the US Bureau of Labor Statistics.  Whether they’re working as independent consultants or for accredited private detective agencies, private investigators (PIs) are putting investigative skills to work. 

But what does it take to become a private investigator—or to run an agency of one’s own?

The compliance experts at 3H Compliance Group (3HCG) have put together this resource to answer that very question. This guide explores the license and registration regulations entities must meet to legally run commercial private investigations. It also examines how to comply with related laws and regulations.

Do I Need a Private Investigator License?

Whether you need a private investigator license depends largely on your location and the specific activities you plan to undertake. In many jurisdictions, working as a private investigator without a license is illegal and can result in severe penalties. Here’s a comprehensive look at the necessity of a PI license, the requirements for obtaining one, and the implications of practicing without proper credentials.
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Understanding the Role of a Private Investigator

Private investigators are hired to conduct investigations that can range from gathering information on individuals to corporate investigations, background checks, surveillance, and more. The role often requires a blend of research skills, knowledge of the law, and interpersonal abilities. Given the sensitive nature of the information they handle, licensing is essential for protecting both the public and the integrity of the profession.

Private Investigator Licensing Requirements by State

While most states require a PI license to operate legally, licensing requirements for private investigators vary widely depending on the state.  In some states, there are city or county requirements.  Requirements can include:

  1. Age: Typically, you must be at least 18, 21 or 25 years old.
  2. Experience: Many states require prior experience working as an investigator or working in a related field, such as law enforcement or military service, typically ranging from 1 to 5 years. However, some states have more stringent requirements, especially if the experience was in a related field. For example, New York requires twenty years’ experience if the qualifying work experience is as a police officer.Many states require prior experience in a related field, such as law enforcement or military service, typically ranging from 1 to 5 years.
  3. Background Check: Applicants usually must pass a criminal background check, as certain convictions can disqualify an applicant.
  4. Examinations: Most states require passing a state-specific exam covering laws, procedures, and ethics related to private investigation.

How to Obtain a PI License

The process for obtaining a private investigator license typically involves several steps:

  1. Research Requirements: Start by researching the specific licensing requirements in your jurisdiction. This may involve visiting the website of the state’s licensing board or the equivalent authority.
  2. Complete Required Education: If your state mandates educational prerequisites, enroll in and complete the necessary courses. Some institutions offer specialized programs in private investigation and/or criminal justice.
  3. Gain Experience: If required, gain the relevant work experience in law enforcement, military, or a related field. Some aspiring PIs work as apprentices under licensed investigators to fulfill this requirement.
  4. Take the Examination: If your state requires an exam, study for it and schedule a test date. The exam will typically cover laws and regulations governing private investigation.
  5. Pass Background Checks: Be prepared to be fingerprinted and pass a thorough background check. Disqualifying factors may include felony convictions or certain misdemeanors.
  6. Submit an Application: Fill out the application form provided by your state’s licensing authority. Be prepared to provide documentation of your education and experience, as well as identification.
  7. Pay Fees: There are usually fees associated with the application process, background checks, and examinations. Ensure you’re aware of all costs involved.
  8. Receive License: Once you’ve met all requirements and passed any necessary exams, you’ll receive your PI license, allowing you to legally operate as a private investigator.  Most licenses will need to be renewed periodically. It is essential to understand the time frame, process, and requirements for renewing your license.

How to Obtain a Private Investigator Agency License

If you are planning to operate as a PI agency, first, you will need to set up your business. You will need to decide on your business structure (i.e. corporation, LLC, partnership or sole proprietorship). You will then need to incorporate or form the business and register it with the Secretary of State. 

After you have created your business, you will need to obtain any necessary licenses.  It is essential to research the specific requirements for your state.  

Many states require an agency PI license, as well as individual licenses for the PIs. Some states issue individual PI licenses, but not agency licenses.  Other states require individual PIs meet requirements similar to an agency and consider individual and agency PI licenses to be the same.

Typically, to obtain a PI agency license, the agency will be required to be a business operating in good standing, have at least one licensed PI, and have a surety bond and/or liability insurance.  

 

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Firearms Permits

Many states will not permit PIs to carry a gun on duty without obtaining a firearms permit or special license. It is important to research your jurisdiction’s rules and obtain any required permits or licenses.

Reciprocity

The ability to work across state lines enhances the flexibility and marketability of private investigators. As a result, some states have “reciprocity” agreements with other states, allowing private investigators to operate at least in a limited scope without the extensive delays of obtaining an additional state license.  

For example, California will permit a licensed PI from Florida to continue an investigation in California for up to thirty days if they submit an Out-of-State Private Investigator Notification Form and obtain approval from the Bureau of Security & Investigative Services.   

However, the reciprocity agreements vary by state.  It’s essential for investigators to know the legal requirements in each jurisdiction in which they operate to ensure compliance with state law and avoid unintended legal issues.

Risks of Practicing Without a License

Practicing as a private investigator without a license can lead to serious consequences:

  • Criminal Penalties: Engaging in private investigation activities without a license can result in hefty fines and criminal charges, depending on the jurisdiction.
  • Civil Liability: Unlicensed investigators may be held liable for any misconduct or illegal actions taken during their investigations, which can lead to costly lawsuits.
  • Future employment: Being caught operating without a license can irreparably damage your professional reputation, making it difficult to secure future work or clients.  It can also impair your ability to obtain a license to legally act as a private investigator in the future.
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How 3HCG Helps PI Agencies Stay Compliant

Private investigator agencies can’t afford to run afoul of the law. It’s wise to have a professional in your corner to keep your approach compliant.

All-In-One Compliance Expertise

While some companies provide individual services like license and registration filings, security and data privacy compliance, or software management, no one else in the market delivers the full suite with our level of expertise and visibility. 

Our comprehensive approach allows businesses to save substantial amounts of money by streamlining their operations and optimizing how they structure their business and go to market.

3HCG offers a unique combination of services, including business filings, consulting, software solutions, and outsourced license management—all in one place. Detective agencies benefit from our:

  • Streamlined legal compliance services
  • Creative Compliance Hub software platform for an automated reporting and licensing tracking
  • Digital entity management solutions
  • Registration footprint management

Questions? Let’s get in touch! Contact us using the form. Or reach out to our compliance experts by phone today at 518-583-0639.

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