Small Business Management

What Insurance Does Your Cleaning Business Need?

There’s more to running a successful industrial cleaning business than simply cleaning homes. Managing staff, making sure clients are happy, and ensuring that your equipment is working properly only begins to scratch the surface of an average workday. Behind the scenes, there is so much more that goes into smooth operations, including accounting, human resources, and purchasing the correct type of insurance—which many small business owners don’t realize includes a wide variety of options.

If you are the owner of a cleaning business, we’ve put together this comprehensive article for you to learn exactly what type of insurance you need to run a successful and trustworthy business. 

Types of cleaning business insurance

The types of insurance you’ll need for your cleaning business may vary depending on your location. Most cleaning business insurance policies offer different types of insurance that can be added onto the policy to meet your company’s needs.

In general, these are the main types of insurance for cleaning companies:

  1. Commercial general liability insurance
  2. Bonding
  3. Equipment insurance
  4. Workers’ compensation
  5. Property damage
  6. Auto insurance

1. Commercial general liability insurance 

Accidents happen. That’s why general liability insurance is so important. General liability insurance covers you, your business, and your employees should you be sued for an  accident caused by negligence during business activities or operations. This covers things like bodily injury and property damage. 

For example, if someone slipped on a wet floor that you or your staff just finished cleaning, or tripped over a cord for an unattended piece of equipment, they may choose to sue you for bodily injury as a result of the accident.

On the other hand, if you or an employee were to accidentally flood a home, cause water damage, or start a fire, the client could sue you for property damage since this happened while you were performing your house cleaning services.

Accidents happen to even the most responsible and diligent businesses. General liability insurance protects you from legal losses in the court system and will pay damages, legal fees, and medical bills to third parties for up to the limits of your policy if your business is held legally liable for damages.

2. Bonding

In order to run a trustworthy cleaning business, you will need to be bonded. This type of insurance, sometimes referred to as a Janitorial Service Bond, protects your company in the event that one of your employees commits an act of fraud.

For example, if an employee steals an item from a client’s home and your business is found legally liable, the bond covers the cost to replace it and will pay the client accordingly. You only hire trustworthy employees, and this type of insurance is a way to demonstrate that to potential clients, as well as to protect you in the unlikely event that something does happen.   

In order for a company to be bonded and remain bonded, each employee must pass a criminal record check. If an employee has a criminal record, you will not be eligible for bonding.

3. Equipment insurance

This type of insurance covers all your cleaning equipment in case of breakdowns or theft. If a piece of cleaning equipment breaks down, your equipment insurance will cover the cost of repair or replacement. It will also cover the costs of replacing stolen equipment.

Depending on the insurance policy, you may have the option to itemize your equipment or choose a blanket amount for coverage. If you choose to itemize the contents of your policy, you will have to notify your insurance company or broker every time you purchase a new piece of equipment and have it added to your insurance coverage. If you choose to cover your equipment with a blanketed amount, this will cover your equipment as a lump sum, regardless of new additions made.

4. Workers’ compensation 

Worker’s compensation is absolutely necessary in the cleaning industry. It covers your employees and subcontractors in case they are injured on site. Workers’ compensation insurance can help to cover injury-related medical expenses and a portion of lost wages.

5. Property damage

If you have an office or a storage unit, property damage insurance protects both the building where you run your business as well as the physical assets inside. 

For example, if your building was vandalised, burglarized, or if there were a flood or fire, your property insurance would cover the costs of repairing the space and stolen items. It will also cover the cost of damages to any neighboring businesses if they are also damaged in the process.

6. Auto insurance 

If your cleaning business owns a fleet of service vehicles, you will need to take out business vehicle insurance. This helps to pay for any costs that result from a motor vehicle accident, including bodily injury or property damage to a third party.

For example, if an employee is driving a company vehicle and gets into an accident, your vehicle insurance can help cover the costs of medical expenses and vehicle repairs or replacement. If you operate in a no-fault insurance state, your insurance will cover your costs; however, if you operate in an at-fault area and your employee is the at-fault driver, your insurance will cover the other driver as well.

Auto insurance generally also covers your company vehicles from theft, reimbursing the costs of replacement. It may also cover incidents like vandalism and damages to vehicles from flooding. 

How do I get bonded and insured for my cleaning business?

Getting bonded and insured happens once you take out the proper types of cleaning business insurance coverage. The best way to ensure you’re getting the right insurance and bonding for your business in your specific location is to speak with a business insurance broker. They will be able to find the best insurance policies at the best rates for your company’s needs.

How much does it cost to get insurance for a cleaning business?

The cost of cleaning business insurance will vary because insurance companies take many things into consideration when creating a quote. 

Here are a few key considerations business insurance companies will look at before covering your cleaning company:

  • Business location of operation
  • Number of employees
  • Type of cleaning equipment owned and used
  • Type of house cleaning services performed 
  • Size of the fleet
  • Fleet vehicle type (year, make, model, etc.)
  • How fleet vehicles are used 
  • Driving records of employees
  • Liability limits

All of these things will impact the total cost of your cleaning insurance policy. Insurance companies will assess risk based on the details of the house cleaning services you provide. 

For example, if your team of cleaning professionals use ladders that exceed a certain height, the insurance company might quote you a higher monthly or annual rate because the risk of worker injury increases the higher the ladders are. 

Your best approach is to work with a business insurance broker who can find the most appropriate coverage and the best deals; however, there are ways for you to reduce your cleaning insurance costs. 

How to lower the cost of your cleaning business insurance

Many commercial business insurance companies will offer discounts to companies that have security measures in place like security systems and surveillance cameras. These added security measures may reduce the rates on your property damage insurance as they  help with false liability lawsuits. Your auto insurance may also be reduced if you use vehicle tracking devices on your fleet vehicles, to help with the recovery of stolen vehicles.

Vehicle tracking devices allow you to better manage your cleaning staff when they’re on the road. To learn more about the features of fleet tracking software, start a free trial to get first-hand experience.

Published July 6, 2021
Matt Davis
Matt Davis
Director of Marketing
Force by Mojio