Cleaners and housekeepers provide an essential service, ensuring that homes and offices remain clean and organized. But like any other business, they face risks that can result in financial loss and damage their reputation. That’s why cleaners and housekeepers must have the right business insurance coverage to protect themselves and their clients. In this guide, we’ll cover everything you need to know about cleaners’ and housekeepers’ insurance requirements, so you can focus on keeping your business running smoothly and keeping your clients satisfied.
Is Insurance Required?
You might wonder whether you need insurance if you’re a cleaner or housekeeper. Having insurance is recommended in most scenarios. Insurance can protect you and your clients from accidents or damages during your work. While it’s not required by law in most places, many clients will only work with cleaning professionals who have insurance.
For example, imagine you damage a client’s antique vase while cleaning their home. Without insurance, you would be responsible for covering the cost of the damages, which could be thousands of dollars. However, if you have insurance, your policy could cover the cost of the damages, saving you from a financial burden.
Insurance is also beneficial for homeowners and offices who hire cleaning professionals, and it's important for the cleaner to have these policies to keep the home or office owners from becoming liable for injuries, etc. If a cleaner sustains an injury while working on the property and doesn't have insurance, the homeowner or office could be liable for any resulting medical expenses or lost wages. However, if the cleaner has insurance, their policy would cover these costs instead.
While insurance might not be required, it’s recommended for anyone working in the cleaning industry. Not only can it protect you from financial losses, but it can also give your clients peace of mind and make you a more desirable hire.
Types of Insurance for Cleaners and Housekeepers
As a cleaner or housekeeper, there are several types of insurance you can consider to protect yourself and your business.
General liability insurance
General liability insurance is the most common type of insurance that covers injuries, damages, and accidents that may happen to your clients or their property. It can cover medical bills, legal costs, and any property damage caused by your business. However, while it may cover legal fees for the policyholder if sued, it won't cover damage to their own property or on-the-job injuries that happen to the owner. Damage or on-the-job injuries affecting the owner or their property would fall under other policies.
Professional liability insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, covers claims related to professional negligence or mistakes you or your staff make. This type of insurance is essential for cleaners and housekeepers who work with valuable and fragile items, such as antiques or fine art. It's important to understand that this isn't referring to a simple accident that damages property, as that would be covered under general liability insurance. Instead, E&O insurance covers damage caused by professional mistakes. For example, E&O insurance would potentially cover damage caused to an expensive antique vase by using an improper cleaning technique, rather than because a housekeeper dropped it.
Workers’ compensation insurance
Workers' compensation insurance is another option that can provide coverage for your employees if they get injured on the job. This type of insurance can cover medical expenses, lost wages, and legal costs if an employee files a lawsuit against your business, and it may also provide a death benefit if an employee is killed on the job.
Business owner's policies
If you run a cleaning service, you may also want to consider a business owner’s policy (BOP). This type of insurance combines general liability, property, and business interruption insurance in one package. Business interruption insurance provides financial protection against lost revenue if a business has to close temporarily due to a covered event, such as property damage due to a fire. It can provide broader coverage at a lower cost than purchasing each type of insurance separately.
Ultimately, the type of insurance you need will depend on the size and scope of your cleaning business, the types of services you offer, and the level of risk involved. It’s essential to consult with a licensed insurance agent to discuss your specific needs and get a customized insurance plan that fits your business.
Additional Types of Insurance to Consider
Lost Key Insurance
Lost key insurance is essential for cleaners and housekeepers, especially in high-end homes or offices. It covers the cost of rekeying customer locks, installing new cylinders, providing new master keys, and reprogramming digital locking systems, which can cost thousands of dollars. It gives the customer and the cleaner peace of mind in case of a lost key.
Premises Liability Insurance
Premises liability insurance is crucial for cleaning businesses because it covers injuries or damage caused by the creation of unsafe conditions, such as if a cleaner were to leave a tangled vacuum cord in a high-traffic area and someone got injured because of tripping over it. Damage or injuries that aren't caused by the creation of unsafe conditions are covered by general liability insurance.
Business/Commercial Automobile Insurance
Business auto insurance covers travel to and from jobs (or elsewhere) in company cars, while Commercial automobile insurance covers you in case of financial loss from accidents involving your business vehicle or specialized car used for jobs, such as a carpet-cleaning vehicle that includes a hose that runs from the vehicle into the building. Keep in mind that your personal auto insurance may not cover business-related incidents if you use a vehicle for business purposes, so you may need commercial auto insurance if you own, lease, or rent a vehicle for business purposes.
Cyber Liability Insurance
Cyber liability insurance protects your business in case of online security and privacy breaches that expose essential information about your customers and your business. This type of insurance is crucial if your business processes prospective and new customers through website forms, maintains a customer portal on your website, or accepts online payments.
Surety Bonds
A janitorial bond is a type of surety bond that protects your customers and pays them if you're found guilty of theft. Some bonds only cover you if you or your workers are convicted of theft. Bonds without a conviction clause may cost twice as much as a conviction clause bond. While there are different opinions on whether solo cleaners or partners need bonds, having one can put your customers’ minds at ease and insure them in cases of loss by theft or dishonesty.
Understanding Insurance Premiums and Taxes for Cleaners and Housekeepers
For new cleaners and housekeepers, paying insurance premiums in monthly installments can be a practical option. Basic premiums may start at less than $30 per month, so it's possible to cover the cost with just one cleaning job.
Once your cleaning business is more established, switching to an annual payment plan can help you save on monthly installment fees.
The good news is that your considered part of the cost, as the IRS considers them part of the cost of running a business. So, keep track of your premium payments, and consult with a tax professional to ensure you maximize your deductions.
Benefits of Insurance
Insurance may seem unnecessary when starting out as a self-employed house cleaner or running a small cleaning business. However, investing in the right insurance policy can provide a wide range of benefits that make it worth the cost. Some of those benefits include:
- **Protection from financial loss: ** Insurance protects you from financial loss due to unexpected events or accidents. Accidents happen, and without insurance, you could be held responsible for the costs of damages or injuries. With insurance, you can rest easy knowing you're financially protected in case of a mishap or lawsuit.
- Peace of mind for your clients: Insurance shows your customers that you take your business seriously and care about their well-being. Clients are more likely to trust an insured cleaning business, which can lead to more business and better rates.
- Peace of mind for you and your employees: Insurance can also provide peace of mind for you and your employees. Cleaning can be a demanding job, and accidents happen. Workers’ compensation insurance can help cover medical expenses and lost wages if someone gets injured on the job.
- More opportunities: Having insurance can help you comply with legal and contractual requirements. Some clients or agencies may require proof of insurance before allowing you to work on their property, so having insurance can expand your opportunities for new business.
Overall, the benefits of having insurance for your cleaning business far outweigh the costs. It provides financial protection, improves your credibility with customers, and can give you and your employees peace of mind. Don’t wait until it’s too late—invest in insurance for your cleaning business today.
Tips When Shopping for Insurance for Your Cleaning Business
The following tips can help you find the right cleaning business insurance for your needs:
- Decide which type of insurance you need. Determine what coverage you need based on the nature of your business. This will help you find a policy that offers the right amount of protection.
- Do your research. Research different insurance companies to compare their policies, prices, and customer reviews. This will help you find a reputable company with affordable premiums.
- Get referrals. Ask for referrals from other cleaning businesses in your network. This will help you better understand which insurance companies are trusted in your industry.
- Ask questions. Don’t be afraid to ask questions and clarify any doubts you may have about your coverage or policy terms. A good insurance agent will be happy to help you understand your options.
- Reevaluate regularly. Review your policy every year to ensure you still have the right coverage for your business. As your business grows and evolves, your insurance needs may change as well.
Best Insurance Companies
Finding the best insurance company for your company might feel daunting, but keep in mind that it's also subjective. The best insurance company for another cleaning service might not be suitable for you. The following list includes the top-rated insurance companies for the cleaning industry:
Next Insurance
Pros of Next Insurance:
With Next Insurance, you can add tools and equipment insurance to your general liability insurance policy. This coverage protects the tools your employees use on the job.
In addition to general liability insurance, NEXT also offers errors and omissions insurance, which can protect you if a client accuses you of negligence.
Cons of Next Insurance:
Unfortunately, NEXT doesn't sell janitorial service bonds.
Why we like Next Insurance:
NEXT Insurance makes it easy to get a quote and purchase a policy online within minutes. You can add an additional insured to your policy at no extra cost and access your certificate of insurance anytime. NEXT also boasts quick resolution times for claims, with many resolved within 48 hours.
Nationwide
Pros:
Nationwide offers business service bonds, which are fidelity bonds that can pay out if an employee steals from a cleaning business client.
If your cleaning business uses valuable equipment, you can add equipment breakdown coverage to a Nationwide BOP.
Cons:
In some states, you can get a quote online, but you’ll need to call your agent or Nationwide to get a copy of your insurance certificate or to add an additional insured.
Why we like Nationwide:
Nationwide is a comprehensive commercial insurance provider that offers almost every type of policy, including fidelity bonds. They work with independent agents nationwide, providing personalized support as you choose the best coverage for your cleaning business.
Hiscox Insurance
Pros:
Hiscox offers an add-on to a BOP called commercial crime insurance, which can cover theft of client property up to $5,000. This type of coverage protects the employer and their clients from theft by the cleaning company's employees. This can also include forgery and illegal funds transfers.
You can buy a BOP online from Hiscox.
Cons:
Hiscox business owner policies aren't available in all states, and some policies may not be available for large companies.
Why we like Hiscox:
Hiscox provides commercial crime insurance that you can purchase online, which can safeguard your cleaning business if an employee steals from a client or your company. Hiscox provides a quick and easy way to purchase a BOP.
Bottomline: Is Cleaning Business Insurance Worth Having?
Accidents and unexpected events can happen to any business, and cleaning companies are no exception. To find the right insurance for your business, you'll need to think about your unique needs and preferences.
While it may be tempting to skip out on purchasing insurance to save some money, the potential costs of a liability claim or property damage could far exceed the price of your insurance policy. As the saying goes, it's much better to be safe than sorry. Investing in cleaning business insurance can provide peace of mind and protect your hard-earned assets in the long run. So, don’t hesitate to take the necessary steps to safeguard your business and employees.
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