Eli Porter
You’ve got your first client. They love your work and rates. Now they want proof of insurance. You have no idea what to do next or what insurance will cost.
Cleaning businesses have everyday risks. A client could slip on your wet floor. An employee may break a client’s furniture. Thieves could steal your vacuum. One accident could wipe your savings away if you lack the right insurance.
The average cleaning business insurance is only $33 a month. Yet, your specific cost depends on factors like your coverage needs. Here’s a breakdown of what to expect when paying for insurance.
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What Does Cleaning Business Insurance Cost
Basic liability coverage costs an average of $48 per month. This is crucial to have when working at clients’ places.
Here are common monthly rates for insurance types:
- General liability: $44-$48
- Workers’ compensation: $116-$136
- Business owners’ policy (BOP): $76-$129
- Janitorial bond: $10
- Commercial auto: $138
Cleaning business owners spend about $398 per year altogether on packages. This gives essential protection without breaking your bank.
The total insurance costs vary depending on which policies you choose. An individual house cleaner will require less coverage than a firm with 10 workers and five vehicles.
General Liability Insurance Costs for Cleaning Services
Cleaning service businesses pay, on average, around $44 a month or $525 yearly for their general liability insurance. It is the main coverage for incidents that commonly happen at the client’s location.
General liability can help you when:
- Someone falls over the vacuum cord of your cleaning equipment and breaks her/his arm
- You cause the hardwood floor to stain or scratch with your detergent mixture
- The employee unintentionally breaks the glass on a valuable vase
- Some say that you spread or invented lies about a rival business, while no such thing happened
Typically, a local cleaner settles for a $1 million per-occurrence limit and a $2 million aggregate limit in general liability insurance, meaning an insurance company can pay up to $1 million for a single incident and $2 million total per year.
53% of the cleaning industry, where general liability is mandatory, has an average monthly fee that is less than $50. Your premium will be at this low when you keep your business scaled, sharing low risk.
The situation of pressure washing businesses is far different. The typical price for a pressure washing business is $75 per month or $895 per year, because the work done increases the risk of property damage compared to regular house cleaning.
Workers’ Compensation Insurance Costs
House cleaning businesses pay, on average $116 per month or $1,395 per year for workers’ compensation insurance. As most states require, this insurance is a must when there’s even one part-time employee in the company.
Workers’ compensation covers hospital expenses and wages when a worker is injured on the job. Suppose your cleaner might:
- Lose balance and fall on the bathroom wet floor, and thus a twisted ankle
- Repetitive scrubbing motions can cause shoulder pain
- Have acid/bleach burns due to the use of harsh chemicals for cleaning
- Get back muscle pulled by lifting too heavy stuff
The average monthly rate for employees’ injury coverage in the cleaning industry is $136; thus, the annual cost can reach up to $1,627. This figure fluctuates by region, number of employees, and the nature of their work.
Even if you are a solo worker, a workers’ compensation policy is still important. Health insurance companies generally reject claims for work-related injuries. A workers’ compensation insurance policy is the one that pays you when you are disabled from work.
Business Owner’s Policy (BOP) Costs
The small local clean-up business with a low risk of occurrence may be able to afford the owner’s insurance policy, which averages a monthly cost of around $76 and an annual cost of $907. A BOP combines general liability and commercial property coverage, enabling savings compared to separate policies.
Apart from that, the bundled policy protects:
- The office or store building
- Cleaning tools and materials
- The PCs and office furniture
- Money was lost due to the closure of the business caused by some kind of property damage
The clients of The Hartford’s cleaning industry might spend approximately $1,553 per year or about $129 monthly to secure a Business Owner’s Policy. The money spent depends primarily on the value of the company’s business premises and equipment.
Those who do small-scale work and possess little property pay less. Companies with warehouses, pricey tools, and a large amount of stock pay much more.
Factors That Affect Your Insurance Costs
Several factors influence your cleaning business insurance costs. By knowing these factors, you will be able to calculate your rates and also figure out how to save money.
- Type of Cleaning Work
What your business does for the customer is the main factor that will determine your rates. House cleaning is usually less expensive than office or other commercial building cleaning. Hospital sanitation is a service that will entail higher premiums due to the risk of biological hazards.
Cleaning windows on skyscrapers will cost more than cleaning a basic floor. Post-construction cleaning may release dust and debris, thereby increasing the risk.
- Your Location
Where you carry out your business is important. Insurers keep an eye on local rules, security and the number of local claims made by businesses.
In general, insurance rates tend to be higher in states with a higher cost of living. The prices are also relatively high in areas vulnerable to natural disasters, such as hurricanes or tornadoes.
- Number of Employees
More employees will lead to greater workers’ comp expenses. Hiring each additional employee increases your exposure to work-related injuries.
Your ultimate premium will be influenced by several factors, including your area, the number of employees, the types of buildings you service, and your claims history.
- Coverage Limits and Deductibles
Higher coverage limits will be the main reason for your monthly premium increase. A $2 million policy will cost significantly more than a $1 million policy.
By selecting a higher deductible, you can reduce your monthly instalments. When you make a claim, you will pay more from your own pocket, but on the other hand, you will save money on regular premiums.
- Claims History
If a company has made many claims requests in the past, it tends to pay higher rates. Such companies are considered higher risk by insurance providers.
Having a spotless claims record will help you get lower rates and better discounts when looking for a new insurer.
- Annual Revenue
The larger the company, the higher its revenue, so it will normally pay the most. The increased revenue corresponds to more clients, in turn, more work, and, consequently, a greater chance that something will go wrong.
- Equipment Value
High-priced gear will be the reason for high property insurance for the commercial cleaning business. Those who operate with $50,000 worth of commercial cleaning machinery will pay more than someone who is only equipped with basic supplies.
Additional Insurance Types for Cleaning Businesses
Specialised policies that cover your cleaning business against different kinds of risks that it may face accompany basic coverage.
Commercial Auto Insurance
Cleaning companies pay an average of $138 per month or $1,652 per year for commercial auto insurance. This insurance covers cars the business owns that are used to transport the necessary equipment and employees to the job sites.
Commercial auto covers the business against:
- Accident damage to your vehicle
- Medical expenses of the injured parties
- Liability when your employee causes an accident
- Work vehicle theft
- Vandalism and weather damage
Personal auto insurance will not cover vehicles that are used for business purposes. Most states have a law requiring commercial coverage for company-owned vehicles.
Tools and Equipment Insurance
The commercial vacuum, floor buffers, and pressure washers that you use are your major investments. Tools and equipment insurance protects these assets against theft or damage.
This insurance can be provided, whether your equipment is:
- In the trailer of your work vehicle
- At the property of a client
- In your storage facility
A thief gets into your locked van at night and steals $5,000 worth of equipment. Tools and equipment insurance will help you replace stolen items so you can continue your work.
Janitorial Bond
The janitorial bond average cost is $10 per month or $120 per year for house cleaning companies. It is a surety bond that protects the clients in cases when an employee of your company steals from them.
Most clients only hire bonded and insured cleaning companies. The bond is proof that your company is reliable and financially stable.
Unlike insurance, if the bonding company pays, you must repay them. Nevertheless, having a bond is one of the reasons why you will get more contracts.
Professional Liability Insurance
It is also known as errors and omissions insurance and covers cases where the client claims you gave them incorrect advice or made mistakes in the services you provided.
A customer might take you to court because:
- You recommended the wrong cleaning product for their antique furniture
- Your advice ruined their expensive flooring
- You did not follow the instructions given for cleaning
Professional liability helps in protecting the business against negligence charges that general liability might not cover.
You may also read: What are typical business owners insurance rules for cancelling
Protect Your Cleaning Business
Cleaning business insurance is more affordable than you might think. The majority of cleaning businesses have a monthly premium of around $33 for the most basic coverage. That little monthly amount is what keeps what you have built safe through your hard work.
Accidents are not predictable. A client could get injured tomorrow. An employee may break expensive equipment next week. Your tools could be stolen next month. If you don’t have insurance, any of these scenarios could result in the termination of your business.
Having the correct coverage will give you a great feeling of assurance. You can concentrate on scaling your business rather than being fearful of the potential risks. Additionally, the clients will feel more comfortable entrusting you with their needs when they see that you have the right insurance in place. Therefore, you will be eligible to sign up for better contracts and gain access to bigger opportunities.
Visit Insurancheck.com right now if you want to receive instant quotes for your cleaning business. Just answer a few simple questions regarding your operations and get insurance alternatives tailored just for you. Securing your cleaning business is a must. Do it before your next job. The cost is small, but the security is priceless.
