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What Types of Insurance Does a Home Cleaning Business Need?

What Types of Insurance Does a Home Cleaning Business Need?

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What Types of Insurance Does a Home Cleaning Business Need?

Cleaning Business Insurance Quotes

Costs for business insurance can vary greatly, and getting insurance quotes from multiple companies is recommended in order to get the best pricing.

Coverwallet and Hiscox offer easy business insurance quotes at affordable prices.

If you’re starting a cleaning business,  you’ve probably wondered whether you need to purchase insurance. The short answer is yes!

How do you know which coverage you need? What amount of coverage should you choose – and how much will it cost? Read on to find out.

Related – Guide to starting a home cleaning business

What are Some of the Risks of a Home Cleaning Business?

When it comes to starting a cleaning business, you can choose to venture into different types of cleaning services – including:

  • Private homes
  • Commercial buildings and offices
  • Medical facilities
  • Shopping centers
  • Specializes cleaning (i.e., carpet cleaning, window cleaning, etc.)

While there are so many other options you can choose to offer your clients, there are general risks involved with these services that you’ll need to be covered for.

1. Damages to Your Supplies

No matter what your specialty, you’ll want to make sure your cleaning products, supplies, and equipment are all covered. Your supplies can get damaged, stolen, or lost while out on a job, resulting in really high expenses to you as the business owner.

2. Injuries

Do you have a plan in place in the event you or your staff get injured on the job? With all the specialized tools and equipment being used to service your clients’ homes and offices, injuries are common – to you, your staff, and even others.

3. Chemicals and Flammable Liquids

If you use any chemicals for your cleaning services, including toxic cleaning solutions or flammable products, it’s important to remember that they can have a negative impact on your health (and your employees!) and can be dangerous – especially if mishandled or not applied properly. Risks can include:

  • Leaving chemicals unattended
  • Storing flammable solutions on-site
  • Not wearing proper safety gear (i.e., gloves and a mask)
4. Damage to the Work Site

Cleaning businesses have to be prepared for any potential damages to their client’s properties. For example, this can include:

  • Damaging furniture and electronics with the use of chemicals
  • Accidentally breaking personal items of the homeowners
  • Short-circuiting the electrical system by using cleaning equipment

Types of Insurance Coverage a Home Cleaning Business Should Consider

With the many risks involved in a home cleaning business, insurance coverage is really important. It’s crucial to set up policies that can protect you as the business owner, your employees, the homeowner or business owner you’re servicing, your equipment, and your cleaning supplies.

Generally, purchasing a Business Owners Policy (BOP) will provide you with all the coverage you need – however, it’s important to know what to include and what you may not need. Here are the must-have insurance coverages for your business:

1. Business Auto Insurance

Whether you have a work van, a truck, a standard-size vehicle, or a combination of the different options, a business auto policy can cover all of them – and will make sure you’re covered for:

  • Damage to your vehicles or someone else’s vehicle as a result of an accident
  • Property damage (i.e., in the event your vehicle causes damage to a fence, pole, or other fixed objects)
  • Liability (in the event you are sued due to a motor vehicle accident)
  • Injuries and medical bills (to the drivers of your vehicles and a third party)

How Much Does Business Auto Insurance Cost?

The annual cost for business auto insurance can vary depending on:

  • How many drivers are operating the vehicles – and their driving records
  • How many vehicles you have on your policy
  • The type of vehicle (i.e., a truck vs. a standard van)
  • How much coverage you choose to have

On average, this will cost you about $1,200- $1,620/year  ($100 – $135 per month).

2. General Liability Insurance

Simply put, general liability insurance covers you in the event your business gets sued for nearly any business-related issue.

This coverage will make sure you’re covered for injuries and damages caused by you and your employees at any of your work sites.

If you have a physical business location where you meet clients, sell products, or offer consultations, you’ll need to make sure to add that location to your liability insurance. However, since you may not have a physical location, you may want to exclude the property coverage from your liability policy.

In particular, you’ll need General Liability coverage to protect you from lawsuits that might arise from:

  • Improper use of cleaning equipment
  • Damages from chemicals
  • Accidental injuries to others
  • Damage to the home or business you’re cleaning
  • Negligence from you or your employee’s part
  • False advertising
  • Products liability coverage (if you sell products at your physical location)

Typically, the best coverage option is to select a “Per Occurrence” option for your liability. This means that you’ll be protected for every incident that occurred during your policy term – as long as you had an active policy at the time.

Coverage amounts will typically be offered in increments of $1,000,000. You might see this coverage listed as:

$1,000,000/$2,000,000

What this means is that you’ll have $1,000,000 in coverage for each occurrence (i.e., each time you get sued), with a maximum of $2,000,000 in coverage for the entire policy period (typically 1 year).

How Much Does General Liability Insurance Cost?

This tends to vary depending on:

  • How many homes or businesses your cleaning company typically visits per week
  • Whether or not you have a physical location
  • The type of services your cleaning company offers (Ex: Prices will be higher if you specialize in cleaning up construction sites)
  • How many employees you have
  • Whether or not you have been sued in the past

On average, a $1,000,000/$2,000,000 general liability policy will cost approximately $500 – $800 per year ($42 – $66 per month).

3. Business Property Insurance

If you rent a location to store your equipment or if you have a physical storefront location, cleaning companies will need coverage if something were to happen to your property. This can include tools, equipment, office furniture, cash on-premises, damage to property rented by you, and more. Typically, this will cover you in the event of:

  • Fire
  • Windstorm
  • Theft
  • Pipe burst
  • Loss of use/Business Interruption (i.e., you can’t stay in your office space due to one of the reasons above)

It’s important to keep in mind that business property insurance only covers your items if they’re damaged in your specified location – and not anywhere else.

How Much Does Business Property Insurance Cost?

The average cost of business property insurance coverage for a cleaning company business is approximately $500.00-$1,000.00 per year and can vary based on:

  • The type and size of the location (i.e., storefront, storage facility, large office space)
  • How much coverage you need for your property
  • The approximate total value of equipment and supplies kept on-premises

4. Inland Marine Insurance (Supplies and Equipment Coverage)

Don’t let the name fool you! This is essential coverage for cleaning businesses of all kinds since it protects all of your equipment no matter where they are – whether it’s in transport, in storage, or currently in use at a client location.

Typically, this policy covers you in the event your supplies and equipment are lost, stolen, or damaged – and is especially important for your:

  • Heavy equipment, including vacuums, specialty carpet cleaners, floor buffers, etc.
  • Cleaning supplies that are transported to each worksite
  • Portable electronic equipment

Most insurance companies require that large items and power tools be 5 years old or less, and you’ll be required to take an itemized inventory of what you’d like to be insured.

How Much Does Inland Marine Insurance Cost?

Inland Marine policies for cleaning companies will typically cost anywhere from $100.00-$300.00 per year.

5. Workers’ Compensation Insurance/Disability Insurance

If you have employees, purchasing a worker’s compensation policy is extremely important. In fact, most states require that you maintain a current and active policy.

worker’s compensation policy will cover you and your employees in the event of:

  • Injuries sustained while working, regardless of how they occurred
  • Loss of wages
  • Disability caused by work accidents

How Much Does Worker’s Compensation Insurance Cost?

Costs vary based on the risk of injury involved, the number of active employees, and the total salary that each employee is paid per year. On average, worker’s compensation policies for a cleaning company can cost $500 – $1,500 per year.

The Bottom Line

With the different types of cleaning services you can offer, it’s important to make sure your business is covered properly. Purchasing a Business Owners Policy can make sure that you’re covered for everything listed above – and having one policy (under the same insurance company) can save you money.

Here are the average annual costs for a cleaning services company’s insurance coverage:

  • Business Auto: $1,200 – $1,620/year
  • General Liability: $500 – $800/year
  • Business Property Insurance: $500 – $1,000/year
  • Inland Marine: $100 – $300/year
  • Workers Compensation: $500 – $1,500/year

In total, insurance for your home cleaning business will cost approximately $2,800 – $5,220/year.

 

What Types of Insurance Does a Home Cleaning Business Need?

What Types of Insurance Does a Home Cleaning Business Need?

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