Every cleaning business needs janitorial insurance, but not every company’s insurance package will look the same. Read on to find out what policies are right for you.
Growing a cleaning business requires a big investment. Before you can even apply for a business license, you’ll need to carry janitorial insurance and in some states, surety bonding. That can seem overwhelming if you’re not familiar with the types of insurance available. After all, you don’t want to find yourself underinsured, but you also don’t want to put money into something you don’t need.
Deciding on janitorial insurance policies doesn’t have to be difficult, however. Especially for small businesses, there are a few primary types of insurance that will protect your company from most lawsuits or claims that may arise due to an accident or some other unexpected situation. And in some cases, the choice is made for you by your state.
Most states require you to carry certain insurance policies to start a business. In most cases, the types of insurance you need depends on the kind of business you want to start. You can determine which insurance policies your state requires by visiting the official guide to government information and services, selecting your state, and clicking on the link for insurance requirements.
However, most state-required insurance won’t be enough to adequately protect your business. There are many other types of janitorial insurance to consider before you start serving clients.
4 Of the most important janitorial insurance policies
1. General liability
General liability insurance is precisely what it sounds like. Carried by most businesses, a policy like this protects your business against liabilities like on-site accidents involving non-employees, some property damage liabilities, and personal injury. GL insurance is usually very affordable, which makes it worth the investment since it can save you thousands of dollars or more in the event of an incident. This is probably the most critical type of insurance policy you can carry since it covers a broad array of liabilities.
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2. Workers’ compensation
Required by most states, workers’ compensation insurance protects your business in the event an employee is injured on the job due to something other than misconduct or improper use of equipment. Workers’ compensation is often one of the most expensive components to a janitorial insurance package, but businesses have little choice but to carry a policy since the majority of states regulate it. Despite the price, workers’ compensation insurance can still save you a lot of money should something happen to one of your workers.
3. Property insurance
You’ve invested a lot of money in your equipment and your office space, so you’ll want to protect it in the event of an accident or theft. Commercial property insurance covers your cleaning equipment and supplies as well as any physical office space you might have. Look carefully into these policies, though, as they sometimes exclude things like weather-related liability, fire liability, and commercial vehicle liability. (Commercial vehicle policies are available for purchase in addition to property insurance policies. Since you probably have at least one company vehicle, you may want to consider this as well.)
4. Surety bond
Janitorial insurance might also include a surety bond. Required by some states, a surety bond not only protects your business against losses due to incomplete work, but it also establishes credibility with current and new clients. A surety bond works like this: If your business is unable to complete a job for any reason, the client makes a claim against the bond, and the insurance company pays for their lost expenses. However, you are then required to pay the insurance company back. The benefit is that the client won’t sue you, and most insurance companies have repayment plans, so you don’t have to pay it back all at once.
The dangers of improper coverage
While many of these janitorial insurance policies aren’t required, you run a high risk in leaving your business exposed to the liabilities these policies are designed to cover. Clients or even employees may file a lawsuit against you for far more than what you’re paying for the policies over time. Not only that, but in some instances, depending on the incident, you may even have to close the business you’ve worked so hard to build.
Ultimately, it’s best to talk to an insurance agent about what kind of janitorial insurance is right for your growing business. They can guide you through all the different types of policies available and which ones are most crucial for your company size, types of clients, and equipment you need to protect. Whatever you decide about purchasing insurance, make sure you do your homework, so you don’t end up in a costly situation.
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