House cleaning businesses are becoming very popular today. There is no shortage of homes and businesses that require the services of a cleaning company.
If you want to be successful in the house cleaning business, then there are major things you need to do. You have to think from the perspective of both a cleaner and a business professional. It simply means setting up your business the right way, offering great service, and protecting your investment with proper business insurance.
Whether you are a sole proprietor and have a one-person operation, have a small cleaning company with a few employees or run a franchise, having proper insurance for your house cleaning business will offer you the coverage and protection you need if an issue arises during a cleaning job.
Although acquiring a general business insurance plan is a great start, but due to the unique nature of house cleaning services – you are exposed to more risk than a typical business that operates out of one location. As a professional house cleaner, you never know what could happen.
Lawsuits against cleaning companies and house cleaners do happen, and you need to take steps to ensure you are ready to handle any situation that may arise. Clients slipping on wet floors, accusations of theft or incomplete work, and damaged equipment are just some of the many risks cleaning businesses face daily.
Purchasing the appropriate cleaning business insurance policies and janitorial bonds should be a cornerstone of your risk management strategy to avoid financial damages if your business is sued.
When purchasing cleaning company insurance, it is important to consider the deductibles and prioritize coverage over cost. Think about how much you can comfortably afford to pay out of pocket if you file a claim. Policies with higher deductibles have lower premiums but can cause financial stress during the claims process.
Policies with lower deductibles typically charge higher premiums but ensure that you will pay a smaller amount if you file a claim. Also, a lot of house cleaning businesses operate on tight budgets, and it can be tempting to buy the minimum insurance coverage to save money.
But always remember that lawsuits can cost hundreds of thousands of dollars, so it is safe to have more coverage than you think you will ever need.
You might consider bolstering your coverage with umbrella insurance, which is also known as excess liability insurance. This supplemental policy kicks in after your business reaches the limits of its liability coverage and can help protect you from paying the costs of an expensive lawsuit out of your own pocket.
Getting umbrella insurance is often cheaper than increasing the coverage limits of your existing general liability policy. Don’t also forget to read the fine print in your policy and ask questions.
Less expensive cleaning company insurance policies may come with terms such as limited coverage, delayed payouts, or low premiums that increase later. When purchasing insurance, carefully read the policies to ensure there are no gaps in your coverage so there will be no surprises if you file a claim.
If you are unsure about any terms, ask your insurance agent to clarify them before you sign. Below is a rundown of the top insurance house cleaning businesses should have, and how they protect you.
Best Insurance for Self Employed House Cleaner
Table of Content
General Liability Insurance
We’ve already established that accidents happen, even when your team of cleaners is highly trained and very diligent about their work.
For instance, if something valuable should be broken while the cleaners are working in a client’s home, general liability insurance ensures that they will be appropriately compensated for the loss without completely bankrupting the business.
This insurance can be an incentive for house cleaners to conduct detailed training on the proper methods of cleaning. Why? Well, an insurance company won’t cover a claim if it is found that the cleaner was negligent.
Additionally, if a client slips on a wet floor or trips over a stray vacuum cleaner cord, the medical bills will be covered by general liability insurance. Every experienced cleaning company understands that general liability insurance is one of the most important types of insurance house cleaners should have.
Business Property Insurance
Many business owners believe their property insurance will cover damage from a disaster. That is a myth. In fact, many disasters may not be covered at all. Your property insurance will cover you for a common risk like an accident, theft, or vandalism.
Fire is normally covered under your property insurance but flooding may not be. In fact, even disaster insurance may not cover flooding. Talk to your agent regarding damage from flooding, winding, and other natural disasters. In the world of insurance today; there are various packages available to cover a multitude of risks.
The key is to maximize coverage without duplication. Work with your licensed insurance professional to figure out specifically what coverages are needed to protect your business property. It is also important to remember the effect of any type of disaster.
Loss of income insurance should be discussed. Often, we forget about the downtime a disaster will bring to the business. Loss of income insurance can cover the liabilities and owner’s income while reopening the business after a disaster.
A janitorial bond is a business service bond that protects customers from property theft by employees. It covers losses if an employee steals items or money from a client while cleaning a home or business. This policy doesn’t cover damage to a client’s property, only theft.
It directly reimburses a client for the loss. Even if your employee is innocent, a janitorial bond will reimburse a client who accuses an employee of theft.
Janitorial bonds are important for any cleaning business, as even the most reliable employee can be falsely accused. You are not required to carry cleaning business bonding insurance. However, many private clients and business owners will only hire cleaning companies that are bonded and insured.
A janitorial bond assures your customers that if their property goes missing, the bond will cover the loss. It helps establish credibility and gives you an edge over companies that are not bonded.
Public liability insurance
Public liability insurance provides protection against claims made as a result of property damage or injuries sustained by members of the public, that occur as a result of your work. It can give you peace of mind that if a customer’s property is accidentally damaged while you are going about your business, you’d be covered.
(Beware – items you were working on at the time of an accident are usually excluded). It also offers reassurance that, in the event of an accident related to your work – say someone slips on a wet floor you’ve just cleaned or trips over your vacuum power cable – you’d be covered for any legal fees or compensation costs.
If you are trusted with clients’ house keys, it is worth looking for a policy extension which offers protection if you fail to lock up properly when you leave, or you can check to see if the policy offers it as standard.
Commercial Auto Insurance
This is one of the types of insurance house cleaning businesses should have, particularly if the workers drive a company car to serve their customers.
Commercial auto insurance covers more than the standard coverage required of drivers. Commercial auto insurance covers vehicles owned by your cleaning business. It can pay for injuries and property damage in an accident, plus damage to company vehicles caused by weather and vandalism.
Professional Liability Insurance
Professional liability insurance is additional coverage which many professions add to their commercial insurance package to protect themselves and their businesses from claims of negligence either from clients or patients.
It is also called professional indemnity insurance. The primary reason for adding professional liability insurance is that the general liability insurance normally covers only personal/bodily injury and property damage while conducting normal business.
For example, a software recommendation which causes a client to lose business is not covered in this type of policy and E&O coverage would. This coverage would also cover legal and defense fees, judgments, and settlements.
Employers’ liability insurance
If you run a business and employ other people – even if it is only one person, or on a temporary basis – you will legally need Employers’ liability insurance, and a displayed certificate to prove it. Failure to do so can result in a fine of up to £2,500 for each day uninsured.
Employers’ liability insurance is designed to protect you against claims made by people while they are in your employment, for example if they become ill or injured as a result of working for you. This policy is required in most states for cleaning businesses that have employees.
If a pool cleaner hurts his back while loading equipment, or a house cleaner develops an illness due to prolonged exposure to cleaning chemicals, workers’ comp can pay for medical bills as well as partial lost wages.
Business premises and content insurance
You may be doing the bulk of your work out and about, but you will have a business base where you keep all your equipment, and it needs the correct protection.
Professional cleaning equipment like carpet and steam cleaners can be expensive, so you will want insurance to cover it in case of accidental damage or theft. Also, you will need to ensure it is protected while being transported from job to job.
If you store all your equipment at your own home, make sure your insurance provider is aware, as you may need extra cover beyond your usual home contents insurance.
Inland Marine Insurance
This is a type of property coverage that follows your equipment as it moves between work sites and when it is stored in an off-site facility. Commercial property insurance only covers property when it is 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 clients’ homes or offices. Apart from covering your business’s physical assets away from your main location, inland marine acts much like commercial property.
It covers similar perils, such as fire, wind, theft and vandalism, and it can be written on an actual cash value or replacement value basis.
This insurance is known to extend the limits of your other liability policies, which basically means it picks up where the others fall short.
For example, if you have a general liability limit of $300,000 and your cleaning business has legal fees of $350,000, umbrella insurance can cover the $50,000 excess. Extending coverage on general liability may help you land large commercial jobs where the contract requires larger liability limits.
Your umbrella coverage helps you meet the requirements, and it usually costs less than adding to your general liability limits.
Cost of Insurance for Self Employed House Cleaners
Insurance for house cleaners basically cost from about $375 to $3,500 per year, depending on coverage needs. Small cleaning businesses might pay $750 to $1,300 each year if they only require a business owner’s policy. For comparison, large house cleaning businesses that need additional policies should expect to pay several thousand dollars per year.
Your total cleaning business insurance cost is the sum of all your yearly premiums. Still, businesses with similar insurance needs can end up paying different rates because insurers look at a variety of factors to determine premium. Some of the items insurers use to calculate your cleaning business insurance costs include:
- Clients: Business owners with commercial and industry contracts face more risk, so they pay more for their janitorial insurance than those who take only residential work
- Revenue: Businesses that earn more have more to lose, and that makes them riskier to insure, causing their rates to go up
- Claims history: Businesses with few or no claims usually get more favorable rates because insurers assume they are safer than others
- Employees: More employees automatically increase your workers’ comp premiums because you have more people to cover, but other policy rates may go up because of the additional risks employees bring
- Location: A business located in a flood zone, in a high-crime area, or far from a fire station pays more for their janitorial insurance
- Coverage limits: Increasing your limits provides greater coverage, but it also means you pay more for your insurance
- Deductibles: Higher deductibles usually mean lower premiums, but you want to make sure you choose an amount you can afford to pay if a disaster strikes
Cleaning business insurance costs can vary from carrier to carrier, so business owners are advised to get multiple quotes before they pick their policies. That way you can compare rates and policy details to find insurance that suits your business.
Every state has its own rules regarding licensing. Some may require janitorial insurance to get your business license or a service contractor’s license, so it is always an excellent idea to contact your state government before you apply.
However, even if insurance isn’t required, you may want coverage to both protect your business and earn prospects’ trust. You most likely need insurance even if you run your business from your home office.
Most homeowner’s insurance policies exclude business activities, so your insurer may decline work-related claims, such as a delivery person slipping on your front walk if they’re delivering cleaning supplies. Home-based business owners can usually cover their risk with a BOP.