Having second thoughts about your cleaning business insurance? These are some indications it may be time to switch.
As a janitorial business owner, you know how important it is to carry good cleaning business insurance. That said, most business owners aren’t insurance experts, and what you do know, you probably learned directly from an insurance company. While most insurance agents are always honest, dependable, and matching customers with the most appropriate coverage at the best prices, the truth is that sometimes you may need to do a little due diligence, especially if something seems questionable.
How do you know what to look for in cleaning business insurance? We have some of the most critical areas for you to question and understand to help make sure that you’re getting what you pay for.
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Watch out for these 10 cleaning business insurance red flags so you know when it’s time to shop around
1. Baseless claim rejections
It happens more often than it should. There’s an accident, you file a claim with your insurance company, and they reject the claim—despite the claim falling within the policy limits on paper. If this has happened to you even once, regardless of the outcome, we’d recommend shopping around for new cleaning business insurance. Premiums and deductibles are expensive, and the only product they go towards is a potential payout in your time of need. You shouldn’t have to fight to get the coverage you’re paying for if the time comes when you need it.
2. Sudden rate increases without claims
Except for renewal increases at the expiration of a policy, your rates should stay relatively the same unless you’ve submitted a claim during the policy period. Occasionally, insurance companies may reassess the risk of your business, which can result in a small hike. Still, if you haven’t asked the insurance company for money, they really shouldn’t be asking you for more than what you’re giving them.
3. Insufficient settlement offers
Suppose a claim is submitted against your cleaning business insurance, and they come back with an underwhelming settlement amount that falls far short of the expected coverage or barely covers your expenses. This is a big red flag that it’s time to switch. Even if you’re a good negotiator and can get them up to an appropriate number, low-ball settlement offers indicate potentially unethical practices, and they certainly don’t make you as a customer feel like the insurance company cares about you or your business.
4. Unreasonable payout requirements
Understandably, insurance companies will want some documentation about any claims you submit. But if the requirements become unreasonable—asking for evidence that isn’t relevant to the claim, making multiple subsequent requests for additional evidence they could have asked for the first time—it may be a sign that the insurance company is trying to get out of paying the claim. If you feel like you’re getting the run-around, you probably are, which means it’s time to revisit the market and see what else is out there.
5. High premiums
If you haven’t shopped around cleaning business insurance policies recently, we recommend doing so every six months to a year. Even if you’re happy with your coverage, insurance companies frequently adjust their premiums, and spending a little time doing some research can save you a lot of money on premium costs. In general, your insurance premiums should be between $500 and $1,500 per year, depending on your location, risk liability, business size, and several other factors. If you’re paying more than $1,500 per year, regardless of your size, you might want to see what else is out there.
6. Delayed payouts
Even after approving a claim, sometimes an insurance company will delay the payout. This practice is always frustrating and occasionally unethical or illegal. Again, if you have a legitimate claim, you shouldn’t have to fight for what you’ve already paid for. Delayed payments are definitely an indication you should at least make some comparisons.
A word of caution: Delayed payouts are sometimes stipulated in a section of the contract, often in fine print, which can weaken your case. Make sure you read the fine print of your cleaning business insurance policy before signing, and if delayed payouts are part of the fine print, consider passing.
7. The deductible is too low
This one isn’t intuitive, but if you have a low deductible, you’re almost certainly paying a higher premium. If you have some emergency cash in the bank and haven’t made many or any claims, save on your monthly premiums by increasing your deductible. There is some risk associated with this, so make sure you have your books in order first, but the premium savings can be substantial here.
8. Automatic premium increases
Another famous member of the fine-print club is an automatic premium increase clause. While you can expect to have your premium reviewed (and probably increased) at the policy end, that at least gives you a chance to dispute a premium increase, especially if you haven’t made any claims or otherwise become more of a liability. With automatic renewals, you agree to a rate hike that may not be warranted, which can get expensive. Only invest in cleaning business insurance that gives you a fair assessment at renewal time, so you don’t end up overpaying.
9. Unhelpful customer service
Whether you’ve filed a claim or simply want to better understand an aspect of your policy, your insurance agents, adjusters, and other representatives should be helpful, informative, and honest. If you feel like your insurance company is lacking in any of these areas, find a better company. There are plenty out there, and just as your customers expect you to be invested in their cleaning needs, you should expect your insurance company to be invested in your coverage needs.
10. Poor online reviews
Finally, even if you haven’t had any problems with your insurance company, if they have a track record of bad reviews online, consider getting out before you end up being one of the reviewers. Word-of-mouth is the best advertising, but it can also be the most detrimental thing to a business. If others are consistently unhappy with their cleaning business insurance from your policy provider, there’s a good chance you will be too.
Insurance can be challenging to figure out, but a few simple steps could save you a lot of money over time.
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