What Cleaning Business Insurance do you Need? Tips & Tricks
Insurance is an incredibly important part of starting a business. It can protect you from unforeseen financial hits. Insurance for cleaners is all the more important given the nature of the work and the fact that they are working on third-party premises.
Whether you're an individual contractor (self-employed/sole trader) or a company, you have to buy the necessary insurances to protect your business, your employees, and your clients. In fact, some clients, particularly commercial ones, may only work with cleaning businesses that are adequately insured.
Before you start looking for insurance providers, you need to understand what type of insurance you must have, what it will cover, and what it may cost.
Below you’ll find 4 simple to follow steps that ‘walk’ you through the process of Insurance For Cleaning Business (with no experience or special skills required).
Why You Need Cleaning Business Insurance?
While any kind of business requires insurance, a cleaning business may need it even more. Cleaners have to travel to multiple sites and work on third-party premises. They also have to sometimes work in dangerous circumstances, such as rooftops and ceilings. So insurance is absolutely necessary to ensure your business is covered in case of an accident or mishap.
Here are some of the risk cleaner insurance can cover:
Types of Cleaners Insurance
Public Liability Insurance
Public liability insurance is the first insurance that you need to look at getting first. It protects your business from personal accident or property damage claims.
If your business causes someone an injury or results in damage to something at the property you're working at, this insurance will cover the costs. If your business is held liable for the damage, the insurance provider will cover the damage up to the coverage limits of the policy.
Since the public liability insurance for cleaners covers a variety of accidental claims, the policy should ideally have a higher coverage amount. For instance, public liability insurance for cleaners working residential jobs should provide at least $5 million coverage. Similarly, public liability insurance policy for commercial cleaners should cover at least $5 million.
Public liability insurance may also cover claims arising because of pollutants. It's a good practice to use organic and pollutant-free products. However, if someone is claiming you used a toxic product or created pollution on their premises, the policy might cover it.
Cleaning Bonding Insurance
Some states require cleaners to participate in a Janitorial Service Bond or simply called bonding insurance. This type of insurance will cover any theft, damage, or other malfeasance committed by a cleaner from your company at a client's property.
While you should properly vet the cleaners you hire, there can be instances where a client might claim theft of their possession(s) on their property by your employee or even you if you clean the places yourself.
If you or your company is held liable legally and ordered to pay the damages, the bond insurance will cover the costs up to the bond limit. The insurance company may set installments for you to pay back, which is more convenient than reimbursing the client upfront.
If you're a small business with a physical location like an office or warehouse where all your equipment is, you should also invest in property insurance or business insurance.
It will protect you in case of theft or property damage, such as damage to the property itself or to the equipment you may have stored on the premises.
Even if you're only renting or leasing the premises, it's important to buy property insurance that provides decent coverage to cover the costs of your equipment and products. It will give you much-needed peace of mind, even when you're home and away from the office.
Worker's Compensation Insurance
This kind of insurance is for cleaning companies with several employees. It covers medical expenses and lost wages in case of a cleaner injury or illness on the job.
Cleaners often have to do dangerous tasks to clean houses, especially commercial buildings. For instance, a cleaner covering roof cleaning services may fall and hurt themselves. In such a case, the worker's compensation will come in useful for both you as a business and the employee who may be unable to work.
Business Vehicle Insurance
You're most likely using a vehicle to get around town and provide your cleaning services. Public liability insurance and other insurances will not cover the damage to the vehicle in case of an accident.
Just like your own private car, all vehicles used for your business must be insured. This insurance should also cover damage to third-person or property brought on by the business vehicle.
The insurance will pay the costs up to the limit of the insurance policy in case of an accident or theft of the vehicle.
Insurance for Equipment
If you're using heavy-duty equipment that costs thousands of dollars, such as special carpet cleaning or floor cleaning machines, you may want to include those in some kind of insurance as well. Some companies also offer insurance for equipment, in case it's stolen or damaged.
It's worth looking into insurance options for such machines, in addition to manufacturer warranties.
Things to Consider When Choosing Insurance for Cleaners
There are too many insurance providers out there, especially if you're operating in a big city. However, not all insurance plans are created equal. You have to find something that best suits your interests.
When it comes to business insurance, you'll find that the devil really is in the detail.
The first thing to see is how much the overall coverage of the policy is. The public liability insurance should be enough to cover damages incurred by your cleaning business in case of an accident, injury, or property damage.
The cleaning industry isn't regulated so there might not be standards. However, you can quickly search what the typical coverage is in the area you're serving.
It's important to check what kind of locations are covered under public liability insurance. This is all the more relevant for commercial cleaners who work in a variety of places and infrastructures.
Why is this important? The public liability plan would only be applicable in the places it specifically states. If an accident or injury happens anywhere else, it may not fall in the public liability insurance coverage. In such a case, your cleaning business will be in serious financial and legal trouble.
Some insurance providers may not cover locations that may have a high risk of accidents, such as large commercial buildings with a lot of foot traffic (malls, hospitals, office buildings, etc.). You have to ensure that the coverage includes all the types of places you usually work.
Take your time to read the insurance plan carefully. Perhaps make a checklist of all the things you want to be covered under the plan. It's best to avoid problems from the start rather than signing on and realizing later what's missing from the policy.
When you get a quote from the insurance company, ask them to send you details of the coverage. When you compare plans before deciding on which one to get, it will all come to those granular details.
It's imperative to compare plans and take into account which plan offers the most at the least price. Even if you're not on a tight budget, it doesn't hurt to save some money by shopping around and seeing what options are out there.
Look for reviews online from other cleaners and cleaning companies as to how they like the service.
Another important thing to consider is customer support. You don't want to be stuck with a company that doesn't really care about its customers. There should ideally be 24/7 customer support in case you need help urgently.
Cleaning Insurance Costs
Insurance costs for cleaning companies vary greatly. It may depend on the nature of the cleaning company, its size, and where it's operating. For instance, house cleaning insurance is typically cheaper than commercial cleaning insurance.
Your major cost would be public liability insurance, which will take up a major chunk of your overall insurance costs. Then comes the business insurance that covers your office/warehouse and your portable equipment. These can cost anywhere from a few hundred to over a thousand dollars per year.
You have to pick the provider based on your financial situation or needs. While cleaners need are quite straightforward, the financial situation differs from business to business.
Most startup cleaning businesses would not want to spend a lot of money on insurance. However, it's important to understand that this is crucial for your business. If you incur a claim that your insurance fails to cover, your business might just go under.
Insurance cost also depends on the size of the company. Insurance for self-employed cleaners is less expensive than that of a cleaning company with dozens of cleaners and office staff.
Insurance for cleaners is an extremely important consideration, especially for a startup. Even if you're a sole trader, you should get public liability insurance. A business without business insurance is asking to close shop.
Accidents can happen all the time, especially with such a hands-on job as cleaning. You have to ensure that you're covered against any potential claims.
The general advice when it comes to choosing insurance is to focus more on coverage than what the insurance costs. You don't want a plan with loopholes just to save some money.
If you are still stuck, and want to learn more about getting your Cleaning Business Started, check out our How to Guide on Setting up a Cleaning Service