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With the economy in recovery, business owners are looking for ways to make their investments strong and protect against risks. The janitorial and cleaning industry is no exception; entrepreneurs of all sizes have been turning to insurance as a way to hedge risk when it comes to investments that may not be able too much growth or provide longevity.
Janitorial & cleaning business insurance is a type of insurance that covers the cost and risk of property damage. It also provides coverage for employees who are injured on the job.
To cover their risks and safeguard their assets, janitorial and cleaning enterprises often need to obtain a range of insurance policies. Business insurance is required for all cleaning businesses, from home maid services to commercial janitorial services. Their company activities determine the insurance they purchase and how much their coverage costs. Depending on the coverage, Insurance for Liability in general for a small cleaning business might cost anywhere from $350 to $7,000 per year.
Janitorial insurance is easy to get with the help of online brokers like CoverWallet. To acquire numerous prices from prominent carriers, just complete a single application. Fill out a quick, no-obligation online form to be insured in minutes.
Janitorial & Cleaning Business Insurance Costs
A modest cleaning business’s Insurance for Liability in general costs between $350 and $7,000 per year. If the company also requires workers’ compensation, the cost might increase by another $2,000 or more. Large commercial cleaning organizations, on the other hand, may pay between $8,000 and $12,000 each year.
Janitorial Insurance Costs by Policy & Coverage Amount
Based on commercial cleaners employing less than five people.
Because insurers consider a range of criteria when determining premiums, businesses with comparable insurance requirements may wind up paying varying prices.
- Clients: Because business owners who deal on commercial and industrial contracts face larger dangers, they must pay more for janitorial insurance than those who solely do residential service.
- Revenue: Companies that generate more money have more to lose, which makes them riskier to insure, resulting in higher premiums.
- Claims history: Businesses with few or no claims get preferential treatment from insurers, who believe they are safer than others.
- Employees: Having more employees naturally raises your workers’ compensation insurance since there are more individuals to cover. Other insurance premiums may increase as a result of the added risks that workers bring.
- Coverage limitations: Increasing your coverage limits increases your coverage, but it also raises your insurance premiums.
Because the cost of cleaning company insurance varies by carrier, business owners should get numerous estimates from reputable janitorial insurance providers before deciding on a policy. This allows them to compare prices and policy conditions in order to obtain the best coverage for their company. Business owners that don’t have time to look around for insurance may utilize a broker like CoverWallet to be matched with the right provider.
Janitorial Insurance Coverage Types
Cleaning company insurance isn’t a pre-packaged policy. Instead, janitors may need a variety of commercial coverage to safeguard their firms. Each insurance is tailored to a particular set of risks. Customer lawsuits, for example, are covered by Insurance for Liability in general, which may cost anywhere from $350 to 7,000 per year. Cleaning firms, on the other hand, may encounter additional hazards that need the purchase of additional insurance, such as commercial property and business vehicles.
The Most Common Insurance Policies for Cleaning Companies
General Liability Insurance
General Liability Insurance protects cleaning businesses when third parties accuse them of causing bodily injury, property damage, or reputational harm through copyright infringement or defamation. Policies cover repair bills, medical expenses, and your legal defense in liability lawsuits. Because clients’ lawsuits could be your greatest financial risk, General Liability Insurance is the most important coverage type for most cleaning businesses.
Some situations that trigger your General Liability Insurance coverage include:
- A customer slipping on their freshly mopped floor
- A pricey statue in your client’s foyer was knocked down by one of your employees.
- A rival accusing you of defamation for a tweet criticizing their service
Since you’ll be working at either the client’s place of business or their personal residence, your cleaning business must own General Liability Insurance. Third-party damages, even if you’re not at fault, may result in expensive court costs and lawyer fees.
Pro tip: Obtaining a certificate of liability insurance (COI) can help you enhance your connection with your customers since they don’t want to be held entirely accountable for any losses incurred as a result of working with your company.
Property Insurance for Businesses
Property Insurance for Businesses covers the cost of repairing or replacing your cleaning business’ physical assets up to your policy limits. These assets typically include your office space, its furniture and fixtures, and your cleaning equipment and supplies. Business owners who lease commercial space can get property insurance for equipment and supplies.
Cleaning company operators might also think about the following endorsements:
- Coverage for lost keys: Covers the cost of rekeying a building if you or your staff misplace the keys.
- Employee dishonesty: When an employee takes a client’s property, the company pays for it.
You have the option of insuring your commercial property for its real cash worth or replacement cost. Replacement cost pays what it costs to replace the item at today’s value but has higher premiums. Actual cash value replaces at market value less depreciation and has lower premiums.
Insurance for Commercial Vehicles
Cleaning businesses that own cars, trucks, vans, or a combination of vehicles need Insurance for Commercial Vehicles in case one of their vehicles is involved in an accident. Policies can cover your repairs and medical bills, the other driver’s damages, and your attorney’s fees if the other driver sues. What your auto policy pays for depends on which coverage options you pick.
The following are some of the commercial car coverage options:
- Most states require you to carry at least liability coverage for your business-owned cars, which pays the other driver’s medical and repair expenses, as well as your legal fees if they sue.
- Collision: In the event of an automobile accident, collision insurance will cover your repair costs.
- Comprehensive coverage pays for repairs caused by anything other than an automobile accident, such as theft or vandalism.
- Medical payments: Covers your medical expenses and those of your passengers following an automobile accident, regardless of who was at fault.
- Uninsured/underinsured motorist coverage pays for your medical and repair fees if you’re in a collision with a driver who doesn’t have insurance or has inadequate coverage for the damages.
- After an accident in a vehicle that was rented, hired, or leased but not owned by your company, hired and non-owned responsibility pays the other driver’s medical and repair expenses.
When a car is used mostly for work, personal auto plans exclude business driving; however, they may cover irregular business excursions. Cleaning company owners who use their own vehicle or truck for work should evaluate their policies or consult with their insurance providers to ensure they are insured.
Marine Insurance (Inland)
Marine Insurance (Inland) is a type of property coverage that follows your equipment as it moves between work sites or is stored in an off-site facility. In comparison, Property Insurance for Businesses only covers items at the location listed on the policy. This is insufficient for most janitorial and cleaning businesses because most need to transport equipment and supplies to their client’s homes or offices.
Aside from covering your business’s physical assets away from your main location, inland marine acts much like Property Insurance for Businesses. It covers similar perils, such as fire, wind, theft, and vandalism, and it can be written on an actual cash value (ACV) or replacement value basis.
Insurance for Workers’ Compensation
Workers’ compensation insurance is required in most states for firms with even one employee to compensate for missed earnings and medical expenditures if an employee suffers a work-related sickness or injury, such as:
- After years of breathing harmful materials, chemically induced lung illness develops.
- After going down the stairs, I broke my arm.
- Lower back discomfort caused by work
In certain areas, workers’ compensation plans fund your legal defense if an employee alleges that their injuries were caused by your carelessness or willful conduct.
Umbrella Coverage
Umbrella Coverage extends the limits of your other liability policies, which means it picks up where the others fall short. For example, if you have a General Liability Insurance limit of $300,000 but your cleaning business has legal fees of $350,000, Umbrella Coverage covers the remaining $50,000.
Commercial umbrella plans only cover particular types of policies, such as:
- General Liability Insurance
- Liability of the employer
- Liability for commercial vehicles
On top of providing additional coverage, a commercial umbrella policy can help you land large commercial jobs where the contract requires larger liability limits. Your umbrella coverage helps you meet the requirements and usually costs less than adding to your Liability in general limits.
BOP
A business owner’s policy, or BOP, is a type of insurance policy that combines both General Liability Insurance and commercial property at lower premium costs. For small cleaning businesses with less than five employees, getting a BOP is cost-effective as compared to getting General Liability Insurance and commercial property separately. Annual premium costs for a BOP for janitorial & cleaning businesses typically range from $1,500 to $3,800 and may increase depending on the services offered as well as the corresponding risks.
Bonds of Assurance
A janitorial bond, also known as a surety bond, is a three-party arrangement between your cleaning company, your client, and a surety. The agreement stipulates that if anything goes wrong, the surety will pay the customer and subsequently be repaid by you. Cleaning and janitorial bonds normally cost between 1 percent and 15% of the overall bond amount.
Obtaining a surety bond is a wonderful way for janitorial and cleaning companies to advertise their trustworthiness to existing and potential customers. The bond protects customers in the event that the company’s workers steal from them, and it’s usually acquired for sums ranging from $10,000 to $100,000 in coverage. A surety bond’s annual premiums begin at $100.
Typically, janitorial bonds cover two sorts of claims:
- Theft by employees
- Failure to meet a contract’s deadline
In contrast to regular insurance, a surety bond functions as a guarantee. Getting cleaning bonds is more like qualifying with a lender than purchasing insurance through an agent because of this, as well as the fact that your insurer pledges to pay first and then be repaid by you.
Other Considerations With Janitorial & Cleaning Business Insurance
Insurance and licenses
The best course of action is to contact your state government before applying for a license since each state has its unique licensing procedures. To get your firm licensed, several jurisdictions demand janitorial insurance or a service contractor’s license. Even though insurance isn’t needed, having coverage to safeguard your company and win the confidence of existing and potential customers is beneficial in the long run.
Janitorial & Cleaning Business Insurance for Home-based Businesses
If you run your business from your home, you’ll still need janitorial & cleaning business insurance, as most homeowner’s insurance policies exclude business activities. With a homeowner’s policy, your insurance company will most likely decline work-related claims such as a delivery person slipping on your front walk when they’re delivering cleaning supplies. Home-based business owners can usually cover their risks with a BOP.
Janitorial & Cleaning Business Insurance for Independent Contractors
Some insurance policies, such as Liability in general, exclude 1099 employees. Since your business can still be sued for the mistakes your independent contractors make, it’s important to work with an insurance company that can help you decipher your policy and advise you on what to do about the gaps.
Conclusion
You need excellent small business insurance whether you’re a lone owner selling home cleaning services or operate a janitorial cleaning firm. You might be held accountable for third-party property damage and injuries even if your company assets are small and you don’t have costly equipment to insure. Obtaining proper insurance coverage is critical for safeguarding your company in the event of a worst-case scenario.
Getting the correct janitorial insurance for your business might be a low-cost solution to safeguard against a catastrophic loss that puts you out of business. Connect with a CoverWallet specialist now if you need dependable coverage for your cleaning company right away.
