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Costs And Types You Need – Forbes Advisor

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Whether you’re tasked with cleaning upholstery, performing deep cleaning or mopping floors, unexpected situations can arise in your cleaning business. For instance, you might accidentally spill a cleaning product on a client’s valuable rug or crash into another vehicle en route to a house-cleaning job.

You can think of cleaning business insurance as an all-purpose solution that covers different types of messes.

What Is Cleaning Business Insurance?

Cleaning business insurance is a small business insurance policy that contains several coverage types to address the specific risk that your industry faces, including workplace injuries, accidental injuries and property damage to others, stolen equipment and lost income.

For example, if your employee fails to put a caution sign on a wet floor and someone slips and injures themselves, the liability portion of your cleaning business insurance will pay for their medical bills.

Who Needs Cleaning Business Insurance?

A cleaning business could have different types of jobs and clients, everything from cleaning a carpet at a private home to cleaning the entirety of a multi-story commercial building. Here are some examples of cleaning professionals who can benefit from cleaning business insurance:

  • Carpet cleaners
  • Commercial cleaners
  • Dry cleaners
  • Furniture cleaners
  • House cleaners
  • Janitorial services
  • Laundry services
  • Office cleaners

What Does Cleaning Business Insurance Cover?

Cleaning business insurance combines several types of small business insurance to cover a range of problems like damage to your business property, medical expenses for accidental injuries, and workplace illness and injuries.

You can start with a business owners policy (BOP). A BOP bundles three essential coverage types and it’s typically cheaper than buying each coverage separately.

Here’s what a BOP includes.

Business Liability Insurance

This covers accidental injuries and property damage to others. For example, if you accidentally spill chemicals on a client’s hardwood floor, your general liability insurance will pay for repairs. It also covers your legal costs if you are sued because of an accident.

This coverage also pays for other types of problems, including advertising injury, reputational harm and copyright infringement.

Commercial Property Insurance

Commercial property insurance covers the physical location of your business and equipment if they’re damaged due to a problem covered by your policy, such as a fire or hailstorm. It includes items you own and rent, such as cleaning equipment, cleaning products, inventory and office computers.

Business Interruption Insurance

If you cannot temporarily run your cleaning business due to a problem covered by your policy, business interruption insurance covers your lost income. For example, if a tree falls on the roof of your dry cleaning business and you have to shut down, business interruption insurance will cover your lost income and other expenses, such as temporarily moving to a new office location.

Business interruption insurance is also called “business income insurance.”

Other Small Business Insurance Types

A BOP is a good foundation, but your cleaning business is likely to require more coverage types to address other types of risks, like auto accidents and injuries to your employees. Here are some other small business insurance types to consider.

Commercial Auto Insurance

A commercial auto insurance policy covers vehicles like cars, vans and trucks used for business purposes, such as transporting your cleaning tools and supplies to a job site. Your personal car insurance policy won’t cover you for work-related accidents.

Here are common types of insurance included in a commercial auto insurance policy:

  • Bodily injury liability. This covers accidental injuries to others if you or an employee causes a car crash.
  • Property damage liability. This covers accidental property damage caused by you or an employee, such as accidentally backing into a fence at a job site.
  • Collision insurance. This covers the cost to replace or repair your work vehicle after a car accident.
  • Comprehensive insurance. This covers the cost to replace or repair your work vehicle for problems like theft, vandalism, flood, fires, falling objects and severe weather.
  • Uninsured motorist (UM)/underinsured motorist (UIM) coverage. This pays the medical expenses for you and your passengers if a driver without insurance or not enough insurance crashes into you. In some states, you may be able to add UM to pay for damage to your car caused by an uninsured driver.
  • Medical expenses coverage and personal injury protection (PIP). This covers the medical expenses for you and your passengers no matter who is at fault for the car accident.

Commercial Umbrella Insurance

If you need more coverage on top of your general liability insurance, you may want to consider a commercial umbrella insurance policy. It kicks in when your business liability insurance is exhausted.

For instance, if a client files a lawsuit against your business seeking $800,000 in damages but your liability coverage is limited to $500,000, the umbrella policy would cover the $300,000 gap.

Hired and Non-Owned Auto Insurance

If you (or your employees) use a personal or rented vehicle to conduct business, this coverage pays for accidental injuries and property damage to others.

For example, if you rent a truck to transport cleaning tools to a job site and cause a car crash that results in injuries, this coverage would cover the other driver’s medical expenses.

Janitorial Bond

A janitorial bond is a type of surety bond that covers your clients for employee theft. Your clients may require that your cleaning company has this coverage.

Workers’ Compensation Insurance

Workers’ compensation insurance pays for an employee’s medical costs, lost income and other expenses (such as physical therapy) if they suffer injuries or become ill while they’re on the job. If you employ at least one person, most states require you to have workers’ comp.

What’s Not Covered by Cleaning Business Insurance?

Your cleaning insurance business won’t cover certain types of issues, including:

Examples of Cleaning Business Insurance Claims

Here are a few instances illustrating claim scenarios and the corresponding coverage offered by cleaning business insurance.

How Much Does Cleaning Business Insurance Cost?

The median cost for a business owners policy for cleaning business insurance is $520 per year, according to Insureon. That’s about $43 per month. Less than a quarter (16%) of Insureon customers pay less than $500 per year for cleaning business insurance and 69% pay between $500 and $1,000 per year.

Your premium depends on factors such as:

  • Size and location of your business: Your business’ size and geographical location play a role in determining your insurance costs. For example, businesses in urban areas generally face different risks and higher costs than those in rural areas.
  • Policy types and coverage limits: The policy types you choose and the limits you set will influence your insurance costs. Comprehensive coverage packages or higher coverage limits can trigger higher premiums.
  • Claims history: A history of frequent or high-value claims might lead to higher insurance costs, as this suggests a greater risk associated with your business.
  • Deductible amount: The deductible is the amount subtracted from an insurance claims check. Selecting a higher deductible will reduce your cleaning business insurance premiums, but you’ll get less from your insurer if you file a claim.
  • Company assets: The value of your business assets, including equipment, inventory and property, affects your insurance costs. Higher asset values typically bump up premiums because the insurer is assuming more risk.

Here’s an example of the cost of cleaning business insurance, based on the types of coverage you choose.

Ways to Save on Cleaning Business Insurance

As you’re probably well aware, insurance premiums add to your cleaning business expenses, which chip away at your revenue. But you can employ several strategies to save. Here’s how:

  • Explore your options: Prices can differ significantly from one insurer to another. The best way to find a good price is to compare business insurance quotes among several different insurers.
  • Look into bundling: A business owners policy (BOP) bundles three types of coverage: business liability insurance, business interruption insurance and commercial property insurance. A BOP generally costs less than buying each coverage type separately.
  • Bump up your commercial auto deductible: A higher insurance deductible typically reduces your premium because your insurer will pay out less if you file a commercial car insurance claim.
  • Ask about discounts: Insurers might reduce premiums when you carry out preventive measures, such a setting up a workplace safety program.
  • Choose an annual payment: Paying your annual premium in full may qualify you for a discount.

Where Can You Get Cleaning Business Insurance?

Most small business insurance companies sell common types of insurance so you can customize your cleaning business insurance policy. You can start with a BOP and add the coverage types you need to it, such as workers’ compensation and commercial auto insurance.

Here is a list of several companies that sell small business insurance:

  • Acuity
  • Allianz
  • Allstate
  • American Family Insurance
  • AmTrust Financial
  • Auto-Owners Insurance
  • Chubb
  • Cincinnati Insurance
  • Clear Blue Insurance
  • CNA
  • Erie Insurance
  • Farmers Insurance
  • Frankenmuth Insurance
  • The Hanover
  • The Hartford
  • Liberty Mutual
  • Nationwide
  • State Farm
  • Travelers
  • Utica First Insurance
  • Westfield Insurance

Business Insurance Made Simple

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Cleaning Business Insurance FAQ

Why would a cleaning business need insurance?

A cleaning business insurance policy covers all sorts of problems that your business faces, such as workplace injuries, lawsuits, car crashes and stolen property. Without the right type of small business insurance, you would have to pay out of pocket to cover the cost of claims against your cleaning business.

If your cleaning business has any employees, you’re required to carry workers’ compensation insurance in most states.

Do I need liability insurance for my cleaning business?

Your cleaning business needs general liability insurance to cover accidental injuries and property damage caused to others. For example, if you break an expensive vase while cleaning a client’s home, your liability insurance will cover it. Without liability insurance, you’d have to pay to replace it on your own.

Does my cleaning business need a commercial auto policy?

If you use a vehicle such as a car, van or truck for your cleaning business, you need a commercial auto insurance policy. Your personal car insurance policy won’t cover any work-related accidents.

For example, if you’re transporting cleaning tools and supplies to a job site and get into a car accident, your commercial auto policy can pay expenses such as medical bills and car repair bills.

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