Everyone knows that most businesses need general liability insurance, and that protection applies to cleaning business insurance as well. But the other risks that sanitation and maid-type services can confront aren’t as obvious. This guide will help you acquaint yourself with all the coverage you should consider when buying cleaning company insurance.
Business Owner’s Policy - The protection that general liability insurance provides your business in case of a lawsuit is included within every business owner’s policy (BOP). However, a BOP always includes another type of coverage as well: property coverage. This doesn’t just apply to property such as an office, but also professional equipment, supplies, and more. If your business keeps an inventory of supplies on hand, whether in an office, or at your home, property coverage is a must. Remember, your personal homeowner’s policy will not reimburse you for damage to business-related property, even if that property (such as cleaning supplies) is kept in your home when not in use.
Workers’ Compensation - In every state in the US except Texas, any business with employees (other than the owner) is required to have a workers’ compensation policy. This is particularly important for cleaning services because of the risk of slips/falls to their employees, as well as the risk of exposure to harmful chemicals or extreme heat (such as when steaming a carpet, etc.) Workers’ comp will prevent employees who are injured on the job from suing your company over the injury, and guarantee them coverage for their medical treatments and even recovery costs and lost wages due to their injury.
Commercial Auto Insurance - If your cleaning company owns a van that they keep supplies in and regularly drive to work sites, then commercial auto is an important protection for your business to have. Commercial auto also covers the vehicle for any driver employed by your business. If you use a personal vehicle to go to-and-from job sites with supplies, then a commercial auto policy would be a good addition to your personal auto policy on the car. Should you get into an accident while driving your personal vehicle as part of your business service, your personal auto policy may not cover the damages.
Surety Bonds - Surety bonds, sometimes called contract bonds, are a special type of insurance that some clients may require you to have before they hire your service. These bonds do not work like regular insurance policies. If you fail to deliver the desired services to a client, and cannot reimburse them, then the insurance company will reimburse the client. Afterward, your business will be required to pay the insurance company back.
Not every business can get surety bonds, but the more established you are, and the cleaner (no pun intended) your claims record is, the better your chances are. Surety bonds do not technically require you to pay premium each year because any payment the insurance company makes to your customers must be repaid by you later on. Instead, there is generally a flat fee to issue or renew the bond each year.
The difference between what is covered by surety bonds and what is covered by your general liability insurance is subtle. General liability covers your business in case a non-employee is harmed, or their property damaged, while you are performing your business services. On the other hand, bonds protect you if your business fails to deliver what you promised, and also acts as a kind of “seal of approval” from an insurance company, which adds quite a bit to your company’s credibility.
As always, be sure to speak with a licensed insurance expert to find the perfect policies for your business.