Now, it’s great if you feel like you and your fellow cleaning employees could never do any harm on the job, but you might be surprised. In one case, a cleaning company was sued for over $300,000 in damages and legal fees when a worker was accused of scratching glass in a custom-built residence.
When you're dealing with other people’s property, there can be some pretty serious legal ramifications for even the ittiest and bittiest of mistakes. If you run a house cleaning or janitorial business, you need an insurance package that will cover your risks. Fortunately, our independent insurance agents are here to help you find exactly that — nothing more and definitely nothing less. But first, let’s talk about the kind of insurance you’ll be looking for.
What Insurance Coverage Does a Cleaning Business Need?
A cleaning or janitorial service will need to cover a range of different business exposures. And since cleaning services come in all different shapes and sizes, your policy may need to be different than the next business’ policy. Generally speaking, your package may include some or all of the following:
- Real property if you own your business premises
- General liability to cover bodily injury and property damage to others
- Automobile coverage for liability arising from the use of your vehicles and for damage to the vehicles themselves
- Workers compensation to cover your employees' work-related injuries or illnesses
- Umbrella liability to provide extra coverage limits
- Employee fidelity coverage to cover theft by employees, both from you and from your customers
- Employee benefit programs for life, health, and retirement
Why Janitorial and Cleaning Businesses Need Special Coverage
Since about 100% of the job is spent working on other people’s property, your cleaning business will have a unique range of exposures that many other businesses don’t have.
For example, you or one of your employees could damage some expensive property belonging to another person or business while on the job. A computer damaged in the course of cleaning might be worth only a few hundred dollars, but the cost to restore the data in that computer could be very costly.
Then there’s the risk of employee theft. Workers on the job will have access to customer equipment and property. If an employee is responsible for a crime, you could be held responsible for the loss.
The right insurance program will protect you against concerns like these, and many more, and give you the janitorial and cleaning business insurance coverage you need to protect your business investment.
Insurance Considerations for Janitorial and Cleaning Businesses
When you get together with your insurance agent, you’ll want to go over the following insurance and bonding options:
- General liability: How much liability coverage you need? If you carry only the minimum liability coverage, you may not have the coverage you need to cover a really big loss.
- Commercial vehicle coverage: Do your employees drive their own vehicles on the job? If they transport cleaning equipment and supplies with them, you could be held responsible if they’re at-fault in an accident. The solution to this is to be sure your automobile insurance policy includes hired and non-owned autos, which adds liability protection for your employees in their own cars.
- Bonds: Do you need janitorial insurance bonding? A standard fidelity bond will cover theft by an employee from the employer. To cover an incident like an employee stealing from a customer, the bond must be specially endorsed; many bonding companies will not do this because of how difficult it is to measure the risk. You need an experienced insurance professional to handle this issue for you.
Understanding General Liability Exclusions
All janitorial insurance programs will start with a general liability policy, and it’s important to know about the care, custody, and control exclusion. Simply put, the exclusion says that the carrier is not responsible for damage to the personal property of others which is in the care, custody, or control of the insured. This is especially important to those in janitorial and house cleaning businesses because almost everything they do involves working on the property of others.
The logic behind the exclusion is that you must know how to conduct the basic functions of your business and, if you don’t, the insurance carrier does not want to be the guarantor of your work. In other words, when a loss is due to events within your control, the business insurance company is not responsible.
- If an employee is cleaning a bathroom and accidentally spills bleach onto a nearby carpet, your general liability policy will most likely cover the damage because the carpet wasn’t in your direct care, custody, or control.
- If an employee is cleaning a carpet and destroys it with a chemical solution, the exclusion will most likely apply, since the carpet was in the direct care, custody, or control of the worker. Insurance companies may have special endorsements for risks like these, so make sure you talk to your agent for more details.
Do I Need Professional Liability?
Whereas your general liability policy will cover injury to another person or damage to another's property, a professional liability policy is designed to cover errors and omissions. Examples would be an attorney missing a filing date, an accountant missing a tax deduction, or an insurance agent failing to cover an obvious exposure.
Whether you need professional liability depends on the nature of your business. If all you do is simple, straightforward janitorial and cleaning work, you probably don’t need this coverage. If you give your customers advice on what to clean, how to clean it, or when to clean it, then professional liability insurance will protect you if your advice turns out to cause damage and your customer loses money.
Whether you need the protection of professional liability is an important topic, so make sure you discuss it in full with your insurance agent.
House Cleaning and Carpet Cleaning Business Insurance
It’s important that your cleaning business insurance and bonding plan match the specific risks you face.
For example, in your line of work you might be responsible for washing dishes or cleaning chandeliers. You and any staff members you hire may have access to a homeowner’s personal possessions and valuables. Plus, some employers may require that you and your employees are bonded as an additional precaution. You will need a cleaning service insurance policy that matches your business risks and concerns.
Likewise, if you clean carpets, you’ll need a carpet cleaning business insurance policy that provides the right protection specifically for those risks. You will also want to make sure your employees are aware of the care, custody, and control exclusion in a general liability policy, since your insurance company won’t cover damage you cause to any carpets you’re hired to clean.
The key to finding the right set of policies to properly protect your cleaning business is to connect with the right independent insurance agent. Together, they’ll help make sure your coverage directly matches your business’ specific needs.
The Benefits of an Independent Insurance Agent
Independent insurance agents are kind of like the Google of insurance quotes. You tell them what you’re looking for, and they bring in the results. And since they aren’t tied down to one carrier, they’re free to shop around and bring multiple policy options to the table.
And it gets better, you don’t have to review the policy options alone. They’ll walk you through everything you need to know about finding the right coverage, and price, for you. But it doesn’t end with your signature. Along the way, if something bad ever happens, they’ll handle the entire claim process for you and deal with the carrier, so you can focus on your cleaning empire. How sweet is that?