Process Server Insurance and Bond Requirements

Posted by | July 19, 2013 | Process Server Standards | 7 Comments

As part of the commentary on our last post in the Process Server LinkedIn group about last week’s post on process server registration and education requirements, a fellow process server questioned how many states require E&O insurance for process servers. The surprising answer to this question:  NONE! Not a single state requires E&O insurance in order to become a process server. Nevada is the only state which requires any type of insurance, and the statute does not require anything beyond general insurance.

Even though states don’t require E&O insurance, that doesn’t mean process servers don’t carry it. In fact it’s something that many have in order to run a process service business. The liability of not having it far outweighs the cost of having the policy.

However, several states do require bonds but the number of them are minimal. Check it out this visual created with data from the Fordham Law School piece:

Process Service bond requirements

The above is from the 2009 data, so it doesn’t include New York City.  The recent rules changes in New York City now require process servers to post a surety bond for the duration of their license period. If a server can’t get a surety bond, they’re required to pay into a Trust Fund established by the DCA.

Here’s the full list of the states who have bond or insurance requirements along with links to their rules:

Arizona

13 Alaska Admin. Code 67.920 – Bond Requirements.

California – certain counties

Cal. Bus. & Prof. Code § 22350

Florida

Florida Statute 48.29 

Massachusetts

Massachusetts  Law Chapter 41, § 92 – Service of Civil Process

Montana

Montana code§ 25-1­1111

Nebraska

Nebraska revised statute 25-507

Nevada

Nevada revised statute § 648.135

New York

New York Subchapter 23 of chapter 2 of title 20 section 20.406-1 

Oklahoma

Oklahoma Statute Title 12 , § 158.1(E)

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7 Comments

  • Dana McMichael says:

    “The liability of not having it far outweighs the cost of having the policy.”

    This is an absurd and unfounded comment, stated as some sort of authoritative perspective. For 42 States, it obviously is NOT that important; and the cost of the policy is nothing but wasted money. E&O insurance for process servers is nothing more than an insurance gimmick designed to bilk the industry. In Texas, even the sheriffs and constables are only bonded to $2,500.

  • Amanda – this is an interesting subject; as the number of claims against Agencies and their independent contractors is definitely on the rise. Most ICs believe that the Agency they work for (should they carry E&O) will cover them should they be a named Defendant. The answer is rarely .. There are so many variances from program to program; Carrier to Carrier, that procuring the correct coverage can be daunting. I encourage those looking for a policy to start with a Broker that KNOWS THIS PROFESSION!! I have some videos that help walk fellow Process Servers through those pitfalls at http://www.pacificcig.com. You are welcome to share the link if it may be of service.

    Great newsletter as always Amanda!!

    Eric Vennes

    • Pamela says:

      To Eric Vennes… The website you offer is no longer available… Do you have another to share on pitfalls for fellow processors?

      Thank you,
      Pamela

  • Christie H says:

    And this why people with criminal records are allowed to serve legal documents.

  • Dana McMichael says:

    Christie, a member of the Texas Supreme Court Advisory Committee once reflected in a public meeting about who should be able to serve process in Texas, “Even felons have to work.”

    The service of civil process is nothing more than a paper delivery service, having less contact with the public than pizza delivery persons. Yes, the documents we deliver have consequence to the lives of those receiving them; but the one delivering them does not need to be a pillar of the society. Check your federal rules. A convicted axe murderer could serve a federal summons the first day he leaves prison. The fact is, our industry does not attract people with criminal intent. If someone wanted to violate another person, he does not need to find a client, get a legitimate paper and hope it is going to the house of someone with goodies worth stealing. They will just impersonate a process server. This whole discussion of the server’s background has no merit in reality.

  • Randy Scott says:

    I am a strong believer that when you arevin a position of leadership and control any position you propagate that leads to your own profit you are suspect.

  • Amanda Sexton says:

    Thanks Eric! I will be sure to share that link here and on our various accounts. Not being aware of what your insurance really covers could wind up being disastrous and has the potential to end someone’s business.

    Dana: E&O insurance seems to be more than a gimmick, at least here in New Jersey. Many process servers are unaware of the fact that if a serve is contested and goes to a traverse hearing where the judge ultimately finds in favor of the person who contested the service, then the entire case has the potential to be dismissed. At that point the attorney is liable to sue the process server, since they now need to restart the case all over. We haven’t had this happen to our company personally but we do know of several individuals who found themselves in this situation. The worst part of it all is that not only can you be sued as a business entity, but you can also be sued civilly. Having E&O is worth the cost when it comes down to the possibility of losing everything you’ve worked so hard for. Even when servers are in the right things do not always work out in our favor unfortunately. Insurance is a great way to ensure we are able to continue our business even if faced with a lawsuit.

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