Cleaning businesses face risks unique to their industry. A worker could knock over a client’s valuable vase while dusting a mantel or accidentally spray a caustic cleaning agent into their own eyes, requiring medical treatment.
Unless you’re protected by business insurance, your company could be responsible for paying those replacement costs or medical expenses.
Here’s what janitorial business owners should know about buying cleaning business insurance and bonding for their companies.
What is cleaning business insurance?
Business insurance protects your company and your assets against natural disasters, claims of property damage and bodily injury and more.
What is a janitorial service bond, and do I need one?
A surety or fidelity bond protects your customer if an employee commits property theft while servicing your client’s home. A janitorial service bond, also called a business service bond or an employee dishonesty bond, pays your client directly in the event of a theft or property loss, up to the maximum amount purchased.
All cleaning businesses should consider purchasing a bond to avoid having to compensate customer losses out of pocket.
As an added bonus, being bonded and insured offers a measure of credibility with potential clients who might otherwise be concerned about having strangers enter personal property.
What risks do cleaning companies face?
Cleaning companies face certain risks including, but not limited to:
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Employees getting hurt or sick on the job.
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Accidentally breaking or damaging client possessions.
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Company vehicles getting involved in traffic accidents
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Claims of poor service or negligence.
Fortunately, all of these risks can be mitigated with the right insurance policy. Some insurance providers offer customized insurance packages for cleaning businesses, or you can build your own. You can often bundle multiple policies at a discounted rate.
Pros and cons of cleaning business insurance and bonding
There are few, if any, negative factors of buying financial protection for your cleaning company. Paying out of pocket for a third-party claim, employee theft or natural disaster could wipe out your business assets and ruin your company’s good name.
Furthermore, business insurance coverage is required in many states, so your company may end up operating illegally if you don’t have an insurance policy.
What policies does your cleaning business need?
The business insurance policies you need are highly dependent on the size of your business, the regions you serve and how many workers you employ.
Here are some common policy types that protect janitorial service companies:
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Insurance type: |
Insurance payout goes to: |
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Clients, vendors and other third parties who suffer property damage or bodily injury from your company’s employees or possessions. |
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Repairs or replacements for your business building, equipment and other assets after a fire and smoke, certain natural disasters or burglary. |
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Replace employee wages, lost revenue and other bills associated with being unable to operate your business for reasons covered under the policy, such as a fire. |
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Medical bills for employees who get injured or get sick while on the job. Business owners in many states are required to have workers’ comp for employees, and some may also need to provide coverage for contractors. |
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Pay for property repairs or replacement, as well as medical expenses when company vehicles are involved in a road accident. |
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Clients who claim they have suffered harm as a result of your business service, advice or product. |
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Repay clients for property loss as a result of employee theft or negligence. |
How do I get my cleaning business bonded and insured?
You can buy cleaning business insurance and bonding in a few different ways:
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Directly from insurance providers.
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Through an insurance broker.
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Through an online insurance marketplace.
Buy business insurance directly from an insurance provider
If you have a specific insurance provider in mind, you can reach out directly to the company for a quote. Some insurance companies allow you to request your estimate over the phone or through their website, depending on your preference.
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This method may work if you … |
This method may not work if you … |
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Have an existing relationship with the insurance company. |
Want to compare policies and coverage options from multiple companies. |
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Find a provider that offers every type of coverage you want. |
Select a provider that does not offer every policy type or bond that you need. |
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Need a policy quickly. |
Buy business insurance through a broker
Insurance brokers reach out to insurers on your behalf, then collect customized quotes for you to compare.
Brokers earn commission from the insurance companies they represent, and are not obligated to present the absolute lowest prices available to you. Some insurance brokers may also charge a fee for their services in addition to what they earn from your insurer.
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This method may work if you … |
This method may not work if you … |
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Want multiple quotes and coverage estimates without managing the outreach process yourself. |
Are wary of additional costs on top of your insurance premiums. |
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Want a single point of contact throughout the insurance evaluation process. |
Buy business insurance via an online marketplace
This option is great for business owners who want to do their own homework.
Online marketplaces use a series of detailed questions to provide you with a near-instant estimate from various insurer partners.
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This method may work if you … |
This method may not work if you … |
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Want to shop your options without having to talk to someone. |
Want custom insurance options. |
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Want quick price quotes from different insurers. |
How much does cleaning business insurance cost?
Insurance and bond rates for cleaning businesses vary based on factors such as the size and scope of a company. Some insurance providers offer cleaning business insurance policies from $45 per month for general liability coverage only. A janitorial service bond can cost as little as $8 per month, depending on the bond amount you purchase.
This post was originally published on Nerd Wallet
