Private Investigation Company Trickery #230

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The insurance investigation industry is a highly competitive market for private investigation companies. If a company can secure steady work from an insurance company or third party administrator, it can be a great source of income for their company.  So to make themselves more valuable company will try to provide investigative coverage throughout the United States even if they really don’t have investigators in those states.   Investigation companies basically want to be the one stop shop for insurance companies.  Insurance companies can call the investigation company and have any assignment covered through one company. 

Insurance companies have however become a bit more picky over the years and I have found that some are asking that only employees of the company work their files.  They are asking that investigators working their files be actual employees of the company.

You are probably thinking, “How else would that work?” That is a great question to ask.

Sometimes companies grow their business faster than they can acquire private investigator employees in those areas (like different states).  So because they might not have employees in that area yet, or maybe they don’t have enough work to bring on an employee, they hire private investigator subcontractors to do the work.  

Subcontractors are investigators with their own businesses that work the investigation assignment for a company at a higher hourly rate with no expectation of future assignments or steady work from that company.  They follow all the company policies but aren’t technically an employee.

So where is this trickery I promised?

The objective of the trickery is always the same but some companies go about it in different ways.  I will share the two ways that it has been presented to me, what the end result is and why you should be wary of it and possibly avoid it.

The First Time it Was Pitched to Me

An investigation company I had worked as a subcontractor with for years approached me several years ago and asked me to come on as an employee. They wanted me to be an employee because many of their clients would only allow “employees of the investigation company” to work their files.  This meant subcontractors would not be able to work their files (like I mentioned before).

They explained that I would be paid like an employee but at a higher rate than most with mileage and the standard investigation package (it has been a while so I don’t remember all the specifics).  

They said I would only work files as an employee for the clients that requested employee-only investigators.

For those that didn’t request employee-only investigators, I would be paid at my subcontractor rate (which was much higher).

LET ME PAUSE FOR A MOMENT

Let me say that though I love this company that I am talking about and have people working for that company that I have known almost my entire investigation career, I don’t trust anyone in this industry when it comes to stuff like this.  I have seen too much in my career to trust that any company is truly looking out for anyone other than themselves.  

Resuming the Story

I kindly declined the offer and explained that I had no way of truly tracking what insurance companies required employees to work their files and what companies did not require employees to work their files (AKA Subcontractors).

I continued to work as a subcontractor frequently until I passed off the client to a friend of mine who started working for them as a subcontractor.

After about a year the company asked him the same question as they had asked me.  They wanted him to come on board as an employee and also remain a “subcontractor”.  

He agreed to the terms and became an employee of the company.

For a while, some cases would come in and he would work with them as an employee.  Some cases would come in and he would work them as a subcontractor.

After a short while, the subcontractor assignments became less and less until only he received only cases that required him to work as an employee.

I still remember him calling me and telling me how frustrated he was about the situation. He needed work but felt like he was getting taken advantage of.

He really didn’t know what to do about the whole situation but he knew he would never accept that type of agreement again.

The Second Time Trickery Took Place

Fast forward a year or so from that point and another company asked if I would be on their vendor panel as a subcontractor.  I happen to know a few investigators that worked for that company and I asked them questions about the type of company they worked for.  I do this whenever I get a chance to learn about the leadership and culture of the company. 

Everything seems to be good with the company so I agreed to be a subcontractor and signed all necessary agreements.

A few weeks later the company returned to me and asked that I come on board as an employee as some of their clients too would only allow for employees to work files.  I told them I really wasn’t interested in being an employee as I had limited availability as it was. The employee pay rate wasn’t particularly great either.

The company assured me I could turn down any assignment and that if the client wasn’t an “employee only” company I would be paid at my vendor rate.

I felt I really had nothing to lose so I agreed to come on board as a part-time employee.

I was able to finally talk with the manager of the company and I explained the terms that I had agreed to. I then asked him directly if there were any clients in my area that didn’t require an employee with the company to work on their files.  He said they didn’t have any current clients that didn’t require the investigator to be an employee.  In other words, all the clients had required the investigator to be an employee.  

That was one of many moments where there was some sleight of hand taking place.  I could go on and on about this particular company but it would take away from the main focus of this discussion.  

Closing Thoughts on When a Company wants to hire you as an Employee and a Subcontractor

I would love to lump specific companies together and tell you to stay away from them but I can’t because not all companies operate like this.

I would love to tell you to stay away from big nationwide companies but I won’t because those are the companies that usually give people their start in this industry most frequently.

I would love to tell you it is safer to work for a smaller company because you won’t run into these types of issues but I can’t because every small company is different.

The main reason for this story is so you can be prepared for this when it comes your way.  Understand that in many cases the company offering this to you is going to try and sway the agreement in whatever way they can so it is in their favor and at your expense.

Make sure whatever promises that are made are in writing so that can’t go back on the agreement.

Be sure to read any subcontract agreement carefully so you know what you are agreeing to.

In the context of this discussion, I don’t believe either of these companies has done anything illegal.  I do feel as though it is shady. When shady things like this happen it tears down the trust between the investigator and the company.  The investigator will begin to feel sour about working any assignment for the company because they feel wronged.

When an investigator feels that way it makes for a bad working relationship and tension between the investigator and the company.

For me personally, trust is everything when it comes to working for a company.  If I can’t trust a company I have a difficult time working for them.  Generally speaking, the lack of trust is usually compounded by additional incidents or situations that further emphasize the character of the company (in a negative way).

I understand everyone needs to work, pay bills and support their families.  Agreeing to a situation like this might be something you have to do. I just don’t want you to be surprised if this happens to you no matter what is said or agreed upon. Go into these types of agreements expecting the worst and hoping for the best.  I wish you the best in your private investigation endeavors. 

Signs of Bad Companies to Work for

Sometimes it is not the company but rather the people that work for the company like decision-makers and managers.  And sometimes the culture through and through in the company is bad. Their philosophies don’t align with you or your integrity.  Click on the title and it will take you to additional signs to look to avoid bad companies.