Insurance claim investigation firms investigate fraud, assess damages, and interview claimants—but most leave money on the table by not offering complementary services. Background checks are a natural, high-margin add-on that directly supports your core investigations and opens a new revenue stream with minimal operational friction.
Why Background Checks Fit Your Investigation Business
When you're vetting a claimant or defendant, a thorough background check strengthens your investigative findings and client confidence. Insurers increasingly expect investigators to deliver comprehensive reports that include criminal history, civil litigation records, and financial standing. Rather than referring clients to a third-party background screening company (and losing that fee), you can white-label or directly perform these checks and keep the margin yourself.
Background checks also build stickiness. A client who uses you for fraud investigations on a slip-and-fall claim may need background screening for a worker's comp case next month—you're now their all-in-one resource instead of a single-service vendor.
Revenue Potential and Pricing
Most investigation firms can price background checks between $150 and $400 per report, depending on scope and turnaround. A basic report (criminal history, driving record, civil litigation) typically costs $50–$100 to source from a vetted aggregator or courthouse database service, leaving you 60–70% gross margin.
If you're already processing 15–20 claims per month, offering background checks as a standard or optional add-on can generate an extra $2,000–$6,000 monthly with minimal staffing overhead. Larger firms with higher case volumes see substantially more. The key is positioning it as a value-add rather than an upsell—include a summary background check in your core investigation package, then charge a premium for deeper multi-state screening.
Getting Set Up: Practical Steps
Partner with a compliant data provider. You'll need a vendor that handles Fair Credit Reporting Act (FCRA) compliance, negative disclosure language, and consent forms. Commonly used platforms for investigators include LexisNexis, Clarity Services, and TransUnion's investigator products. Expect setup fees of $200–$500 and per-report costs of $40–$120.
Create a clear scope menu. Define three tiers:
- Basic: Local criminal history + driving record (2–3 days)
- Standard: Multi-state criminal + civil litigation + address history (3–5 days)
- Comprehensive: Everything above plus financial liens, property records, and sex offender registry (5–7 days)
This lets clients pick what they actually need rather than paying for data they won't use.
Update your contracts and disclosures. Your client agreements must outline background screening services, compliance obligations, and any third-party consent required. Have a lawyer review your FCRA language—violations can cost $100–$1,000 per report in damages.
Train your team on compliance. Background screening isn't complex, but it's regulated. Your team needs to understand FCRA rules, proper disposal of reports, and how to handle disputes. One-hour training session per employee covers the essentials.
Integrating Background Checks into Your Service Offering
Mention background screening in your case intake forms and proposal templates. Train your investigators to recommend checks when they see red flags in an initial interview—fraud indicators, inconsistent statements, or high-risk claimant profiles warrant deeper vetting.
Consider bundling background checks with your investigation retainer. If a client pays $5,000 for a full liability investigation, throw in a comprehensive background check on the claimant at no charge. It's a low-cost value add that makes your proposal stand out against competitors quoting investigation-only services.
List your background check capabilities on your website, Google Business profile, and service directories. Getting found by prospects searching for "background checks near me" or "investigator with screening services" is easier when you're clearly visible—Mercoly's listing platform helps investigation firms get discovered, win new leads, and showcase both investigations and specialty services like background screening.
Frequently Asked Questions
Q: Do I need a separate license to offer background checks? A: Most states don't require a separate license for investigators offering background screening if you're already licensed for investigations. However, verify with your state's investigator licensing board, as some jurisdictions have specific background screening endorsements.
Q: What's the typical turnaround time for a multi-state background check? A: Standard multi-state reports take 3–5 business days through most aggregators; expedited (1–2 day) options typically cost 25–40% more and are worth offering for urgent claims.
Q: Can I legally use background checks in an insurance fraud investigation? A: Yes, but only with proper FCRA disclosures and written consent from the subject. Your vendor and legal counsel should confirm compliance before you send any reports to insurers.
Get your background check service live within the next 30 days and start capturing that additional margin.