The Complete Guide To Cleaning Insurance
Do you run a cleaning business? Are you in and out of other people’s homes or businesses, driving from location to location, or employing people in various work environments? No matter the size of your janitorial or cleaning business, cleaning insurance should be part of the risk management plan for your businesses.
It’s easy to imagine all the various ways a cleaning business might need protection from a list of potential concerns: an employee breaks something while cleaning, a homeowner slips and falls because of wet floors, an employee is in a car accident in a company vehicle on the way to an appointment.
With so many moving parts, a cleaning business has multiple aspects for which it needs coverage, and cleaning insurance with endorsements is the solution. In this post, we’ll cover exactly which insurance policies your cleaning business needs and how much it’s going to cost you.
Table of Contents
What Is Cleaning Insurance?
Cleaning insurance is a bundle of policy plans set through an insurance company that best covers needs specific to the cleaning industry. Basic cleaning insurance will comprise of commercial general liability insurance. A general liability policy will cover your expenses should you need to go to court to defend an accident, an injury, or damage to property. Typically, your policy will pay for legal representation, litigation fees, out-of-court settlements, and judgments set by the court.
Some insurance companies automatically bundle commercial auto insurance into their cleaning insurance policies, but some don’t; most companies will set up a bundled policy that covers all the risks known to your company. With a foundation of general liability insurance, it is easy to add the extra endorsements you may need depending on your specific business. (For example, if you hire employees, you might need to invest in worker’s compensation; if you and your employees drive cars for the business, you might want to add commercial auto insurance. Don’t worry, we’ll cover all the details shortly.)
What Cleaning Insurance Covers
Here are the things a commercial general liability policy would cover for a cleaning business:
- Bodily Injury To A Client: If a client slips and falls down their newly-mopped stairs, this insurance will cover the medical bills for your customer and the legal costs to defend yourself.
- Property Damage Because Of Your Business/Employees: People in the cleaning industry are around other people’s property all the time. Accidents happen, and in the event of an employee wrecking grandma’s priceless vase or stumbling and spilling bleach solution on the carpet, your general liability insurance will cover the replacement costs.
- A Lawsuit For Slander, Libel, Or Copyright Infringement: Most small businesses have a presence online and there’s a rapid pace on the internet where tweets or Instagram posts have a quick way of gaining attention — for better or for worse. Libel occurs when you print untruths about someone and slander is when you speak those untruths to other people. Many businesses, small and large alike, have been the subject of lawsuits because of something written on the internet or an ill-conceived advertisement. A joke, a meme, an accusation about another business–all of it is another way your business is at risk. Or what if an employee discovers something about a client and gossips about it to their group of friends and the word gets out? Your basic general liability plan will cover that type of lawsuit.
What Cleaning Insurance Doesn’t Cover
Here are the specific things you’d need to insure separately that may not be covered as part of commercial general liability:
- Negligence: If it’s proven that accidents happened because of your own negligence, the insurance company doesn’t have to pay the claim.
- Fire/Flood/Property Damage Sustained From A Natural Disaster: Some natural disasters are covered under commercial property insurance instead. If you have your cleaning supplies located somewhere that is damaged due to fire or natural disaster, general liability won’t cover that. (Flood and earthquake protection are often extra endorsements.)
- Protection From Giving Bad Advice: If having clients and giving advice is part of your business model, this insurance protects you from a lawsuit that’s a result of your bad advice. If a client asks for a good cleaning solution and then that solution starts a fire? You’ll need further protection to help cover yourself from those types of errors.
- The Loss Of Income If You Need To Close Your Doors: Business interruption insurance will help with lost income and the cost of relocation if a disaster causes you to shut down your business (or if a leader property suffers damage). Since commercial cleaning is contingent on working in other people’s homes, if those homes suffer damage and you can’t earn money, this insurance protects you.
- Vandalism: Damage to your building and equipment as a result of vandalism is covered under your commercial property insurance.
- Employee Injuries: While general liability will protect clients and customers, it’s not there to protect workers from the financial burden of an injury on the job. Any business with a single employee (state laws apply) needs worker’s compensation insurance to cover employee injuries.
- Car Accidents: The Motor Maids are a woman’s biker community, not — as I initially thought — a group of maids on bicycles. The latter of which isn’t really a thing because hauling vacuums and cleaning supplies is hard on a bike. With employees and yourself driving cars that have equipment for your business inside of them, it’s best to invest in commercial auto insurance.
Additional Types Of Insurance That Need Cleaning Businesses Might Need
After you’ve purchased a basic cleaning insurance plan that has commercial general liability, you’ll also want to think about how to protect all those things that aren’t covered in a general liability policy. If any of the above things (car accidents, theft, worker injury, etc.) are risks you’re concerned about, then bundling your general liability policy with additional policies will provide a comprehensive insurance plan that aims to protect every aspect of your business.
Here are some of the additional insurance policies a cleaning business should consider:
Commercial Automobile Insurance
Your employees drive to and fro to client houses. Sometimes those cars have business property inside of them, too. If an employee gets into an accident or any of your equipment is wrecked in a crash, you’d need commercial auto insurance to cover that loss.
Commercial Property Insurance
This insurance covers damage to your property because of fire or tornados or hurricanes or vandalism. Strong winds push a tree into your building where you keep your supplies? This is the insurance for those claims.
Business Owner’s Policy
This is a policy that combines both general liability and commercial property insurance into a bundle. Sometimes this policy also includes business interruption service.
Professional Indemnity Insurance
Do you give any sort of advice as part of your cleaning business? Protect yourself from lawsuits directly related to bad advice that caused financial or personal damages to a client.
In most states, you need worker’s compensation to cover employee injuries. Texas is the lone hold-out with zero worker’s compensation guidelines, but all other 49 states have rules that state you must provide worker’s compensation if you have employees.
Business Interruption Insurance
If your business has to close because of a disaster or accident (or a business you depend on has to close because of a disaster or accident), business interruption insurance will cover your lost income.
These bonds are specific to the cleaning industry. Here is how they work: the bonds are purchased in advance and used in the event of an employee stealing something valuable from a client. If a company says they are bonded it means they have purchased coverage against theft.
Bond pricing is contingent on how many employees you have and how much loss you’d like to cover. For example, janitorial service bonds for companies with five or fewer employees average $127 for a year of $10,000 coverage. But bonds aren’t like insurance: you have to pay them back if you are involved in a dispute.
Who Needs Cleaning Insurance?
Everyone who runs a business that works in and out of people’s homes cleaning them in any capacity, needs to have basic cleaning insurance. As a general rule, cleaning companies are around valuable property, lugging around expensive equipment, and possibly working with dangerous chemicals. General liability insurance is an affordable policy that protects cleaning businesses from business-ending disasters.
However, the reality is that general liability may not be enough to fully protect your cleaning business. Bundle your policy with the other types of insurance you’ll need to make sure your business is covered. Plus bundling can often save you more on your insurance costs.
No matter what type of cleaning business you do, you should think about insuring yourself, but here are some of the most common cleaning businesses that should purchase cleaning insurance and endorsements:
- Dry cleaning business
- Maid services
- Janitorial services
- Carpet cleaning business
- Laundry services
- Commercial building services
How Much Does Cleaning Insurance Cost?
Cost is the ultimate factor for many businesses when adding insurance to their list of expenditures. As with all insurance policies, it’s important to understand that you are paying for peace of mind — the assurance you won’t lose your business in the event of something pretty terrible happening. That doesn’t take away from the fact that adding endorsements could quickly get expensive, especially for start-up companies that may not be receiving a flow of income yet.
However, for a basic cleaning insurance policy, the cost is affordable and within range for even small businesses with low income.
According to Insureon, over 53% of small businesses pay between $400-$600 a year for general liability insurance and 21% paid less than $400 a year. Some of the things that may affect that yearly premium are:
- Your specific industry risks (working around office equipment or valuables, etc.)
- How much liability insurance you need
- The size of your business
- How many employees you have
- The location of your business
For a small business that needs one million dollars of coverage, the price may be as low as $30 a month. Cheap liability insurance is within range for all business types.
Choosing The Right Insurance Policy
When you’ve decided you need to invest in insurance, there have several steps.
The first step is to assess your risks. What would you like to protect? After that, gather all your business details. (How many employees do you have? What do you make in a year? How many cars are on the road for you during the day? What equipment would you like to insure?) The third step is to comparison shop with various vendors. Discuss bundling your policies and mix and match the perfect policies until you get the coverage you need.
After that, it’s time to buy your insurance (and your bonds, if required by clients)!
With the right insurance coverage, you can rest easy and set your business up for success. Read our full post How To Start And Fund A Cleaning Business for more tips and tricks for running (and funding) a successful cleaning business.