Cleaning Business Insurance: A Plain Guide to Coverage Types

Please read this first. This is general information, not insurance advice. Coverage needs vary by state, by client contract, and by whether you have employees. Talk to a licensed insurance agent about your business and your state before you buy or change any policy.

The SBA's Get business insurance page gives an overview of common business coverage types and how to work with an agent. This page puts those ideas in cleaning terms.

Why clients ask for proof of insurance

Homeowners sometimes ask whether you are insured. Commercial clients and property managers may ask for more than a yes. Here is what they may ask for:

• A certificate of insurance. A document that summarizes your coverage, often called a COI. Your agent or insurer usually issues it.
• Being added as an additional insured. Some contracts ask that the building owner or manager be named on your policy in a specific way. Ask your agent if your policy allows it.
• Certain coverage types or limits. A contract may list coverage it expects. Read it before you sign, and send the list to your agent.
• Proof of a bond. Some clients ask about bonding, often in connection with access to their property.

Keep a current certificate on file. When a prospect asks, a quick answer shows you are ready for the work.

Coverage types, explained

These are the coverage types cleaning owners often ask agents about. Not all of them will fit your business, and the names can vary between insurers.

General liability

General liability is often the first policy owners ask about. It is generally meant for claims that your work caused property damage or injury to someone else, such as a client or a visitor. What it covers, and what it leaves out, depends on the policy. Ask your agent to walk you through the exclusions.

Janitorial or surety bonds

A bond is not the same as an insurance policy. In cleaning, janitorial or surety bonds are often discussed in connection with client property and access to homes and buildings. How a bond works, and who it protects, depends on the bond. Ask your agent to explain it in plain words before you advertise that you are bonded.

Workers compensation

Workers compensation is generally meant for work-related injuries to employees. Each state sets its own rules for it, and those rules often depend on whether you have employees and how many. If you plan to hire, ask a licensed agent and check your state's rules first.

Commercial auto

If you drive to jobs, carry equipment, or have staff drive for the business, your personal auto policy may not cover business use. Commercial auto is meant for vehicles used for work. Tell your agent how you use your vehicles and ask what fits.

Tools and equipment

Vacuums, floor machines, and carpet extractors cost money to replace. Some policies or add-ons are meant to cover business equipment, including gear you carry from job to job. Ask whether equipment in your vehicle or at a client site is included.

Professional liability

Professional liability, sometimes called errors and omissions, is generally meant for claims that a service was done wrong or not done as promised. Some cleaning owners ask about it, especially with commercial contracts. Your agent can tell you whether it is relevant to your work.

Umbrella

An umbrella policy is generally meant to add coverage above the limits of certain other policies. Some contracts ask for higher limits than one policy provides. Ask your agent how an umbrella would fit with what you already carry.

Subcontractors and insurance

If you use subcontractors, ask your agent how your policies treat their work, and whether you should ask them for their own certificate. Whether someone working for you is a contractor or an employee depends on the facts, not the label. Read the IRS page on independent contractor or employee and check with your accountant.

What affects what you pay

This page does not list premiums or ranges, because any number here could be wrong for your business. Insurers generally look at factors like these:

• The services you offer, such as house cleaning, offices, floors, or post-construction work
• How many people work for you, and whether they are employees
• Any past claims
• Where you operate
• The coverage limits and deductibles you choose
• The vehicles and equipment you use

Ask your agent which of these matter most for your quote, and what would change it.

Questions to ask a licensed agent

Bring a short description of your business and any contract you are about to sign. Then ask:

1. Based on what I do, which coverage types should I look at, and why?
2. What does each policy cover, and what does it leave out?
3. What are the limits and deductibles, and how do they affect the cost?
4. Am I covered when I am working inside a client's home or building?
5. Is damage to a client's property covered, or only damage to other people's property?
6. What happens if I break or lose a client's key?
7. Does my personal auto policy cover driving to jobs, or do I need commercial auto?
8. What are my state's rules on workers compensation if I hire?
9. How do I get a certificate of insurance, and how fast?
10. Can I add a client as an additional insured, and does that cost extra?
11. How does a bond differ from my policies, and do I need one for the clients I want?
12. When should we review my coverage again?

How insurance shows up in contracts and pricing

In your contracts. Many service agreements have an insurance clause. Only state the coverage you actually carry. The cleaning contract template shows where that clause usually sits. Have a local lawyer review your agreement.

In your prices. Insurance and bond costs are overhead. Add up what you pay for the year, divide by your billable hours, and that share belongs in every job's cost. Leave it out and your break-even is too low. The guide to cleaning business profit margin shows how overhead flows into your price. The margin you add on top is your call.

Coverage checklist

Use this to prepare for a call with your agent. It is a list of questions, not a list of what you must carry.

Where this fits

Insurance is one step in setting up the business. See how to start a cleaning business for the full order, and the cleaning business license guide for the difference between licensing, bonding, and insurance.

Put your overhead in the price

Once you know what your coverage costs, it belongs in every quote. Binderlane organizes that math: answer a few questions, see your break-even and your price, then text the client a branded quote with your logo. It does not set or recommend rates. First 3 quotes are free to send, no card.