Both Rothbard and Hoppe discuss an “insurance” model for preventing crime and aggression, which makes sense from a market perspective. Rothbard posits that private police services likely would be provided by insurance companies which already insure lives and property, for the commonsense reason that “... it would be to their direct advantage to reduce the amount of crime as much as possible.”Rothbard of course never worked in the insurance business. He was a tenured academic economist at UNLV.
Insurers are not risk managers; that's the customer's exposure. They tried this once with fleet managment services for their trucking company-insureds, and promptly got added to their own customers' lawsuits. Insurers compete for good risks, they don't rehabilitate bad risks.
"Peace officers" are for close-knit, homogenous societies with strong institutions. "Law enforcement" is for diversity. This is another libertarian blind spot.
Crime and punishment from top to bottom would be very different in a libertarian society. For starters, most crimes would be assuaged by restitution. Violent criminals would be executed or exiled, or sold into slavery to work off their blood debt. Nobody in a market-based society is going to pay to keep violent felons fed, housed and protected behind concrete walls and concertina wire from their victims' retribution.
A private police service that cannot provide executive enforcement of its subscribers' covenants to the exclusion of others does not have a marketable product. Commerce wants predictability. That's why businesses cartelize in forms like the Hanseatic League or Uniform Commercial Code.
Hoppe's idea of numerous "mini-states" is closer to reality. Future libertarian societies will not have the Non-Aggression Principle chiseled into stone tablets; they'll just be based on ownership, that is, private property. Somebody--a person, family or corporation--will own the territory and set the rules and you will pay rent to live there. These fees will negotiate sojourners' rights and compete with each other for human and financial capital. If you want to see how anarcho-capitalism plays out, don't bother with some academic's thought experiment on mises.org. Just read up on the Arab Emirates instead.