Janitorial & Cleaning Business Insurance: Cost & Coverage
Nancy Fernandez is a Credit Card and Insurance Expert at Fit Small Business, specializing in business credit cards and business insurance.
Janitorial and cleaning businesses typically need to purchase a group of insurance policies to cover their risks and protect their assets. Every cleaning business, from residential maid services to commercial janitorial companies, needs business insurance. Which policies they buy and how much their coverage costs depends on their business operations. General liability for a small cleaning company typically ranges from $350 to $7,000 per year, depending on the coverage.
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Janitorial & Cleaning Business Insurance Costs
General liability insurance for a small housekeeping business ranges from about $350 to $7,000 per year. If that business also needs workers’ compensation, the price tag could go up by another $2,000 or more. For comparison, large commercial janitorial businesses might pay between $8,000 to $12,000 annually.
Janitorial Insurance Costs by Policy & Coverage Amount*
Insurance Type | Annual Premiums | Coverage Amount |
|---|---|---|
General Liability | $350 to $7,000 | $1 million occurrence limit—$2 million aggregate limit |
Commercial Property | $380 to $1,000 | $5,000 to $10,000 |
Business Owner’s Policy (BOP) | $1,500 to $3,800 | $1 million occurrence limit—$2 million aggregate limit |
Commercial Auto | $1,350 to $2,800 | Combined single limit: $1 million |
Workers’ Compensation | $2,000 to $6,700 | $100,000 bodily injury by accident (each accident); $500,000 bodily injury, policy limit; $100,000 bodily injury disease, each employee |
Inland Marine | $180 to $900 | $5,000 to $10,000 |
Umbrella | $400 to $1,500 | $1 million |
*Based on commercial cleaners with five or fewer employees
Businesses with similar insurance needs can end up paying different rates because insurers look at a variety of factors to determine the premium, such as:
- Clients: Business owners with commercial and industry contracts face greater risks, so they pay more for their janitorial insurance coverage than those who only take on residential work.
- Revenue: Businesses that earn more have more to lose, and that makes them riskier to insure, causing their rates to go up.
- Claims history: Businesses with few or no claims usually get more favorable rates because insurers assume that they’re safer than others.
- Employees: Having more employees increases your workers’ comp premiums automatically because you have more people to cover. Other policy rates may also go up because of the additional risks employees bring.
- Location: Businesses located in flood zones, high-crime areas, or far from fire stations pay more for their janitorial insurance than those that aren’t.
- Coverage limits: Increasing your limits provides greater coverage, but it also means you pay more for your insurance.
- Deductibles: Higher deductibles usually mean lower premiums, but make sure you choose an amount you can afford to pay if a disaster strikes.
Because cleaning business insurance costs vary from carrier to carrier, business owners should get multiple quotes from top janitorial insurance companies before they pick their policies. This gives them a chance to compare rates and policy terms to find the right coverage for their business. Business owners who don’t have the time to shop around for policies can use a broker like CoverWallet to get matched up with the provider that’s best for them.
Types of Janitorial Insurance Coverage
Cleaning business insurance isn’t a specific policy you can buy. Instead, it’s any number of commercial policies janitors may need to protect their businesses. Each policy covers a specific set of risks. For example, general liability, which can cost anywhere between $350 and $7,000 per year, covers customer lawsuits. However, cleaning businesses can face other risks that require other policies, like commercial property and business auto.
Most Common Cleaning Business Insurance Policies
Type of Insurance | What It Covers |
|---|---|
General Liability Insurance | Third-party claims for bodily injury or property damage |
Commercial Property Insurance | Damage to physical business assets like buildings, equipment, and supplies |
Commercial Auto Insurance | Injuries, property damage, and lawsuits arising from accidents involving business-owned vehicles |
Inland Marine Insurance | Business property as it moves between job sites |
Workers’ Compensation Insurance | Employees’ medical bills and wage replacement following work-related illness or injury |
Umbrella Insurance | Claims that exceed limits on liability coverage |
General Liability Insurance
General liability insurance protects cleaning businesses when third parties accuse them of causing bodily injury, property damage, or reputational harm through copyright infringement or defamation. Policies cover repair bills, medical expenses, and your legal defense in liability lawsuits. Because clients’ lawsuits could be your greatest financial risk, general liability is the most important coverage type for most cleaning businesses.
Some situations that trigger your general liability insurance coverage include:
- A customer slipping on their clean floor after you mop it
- Your employee knocking over an expensive statue in your client’s lobby
- A competitor claiming your tweet about their service is defamation
Since you’ll be working at either the client’s place of business or their personal residence, your cleaning business must own general liability insurance. Third-party damages, even if you’re not at fault, may result in expensive court costs and lawyer fees.
Pro tip: Getting a certificate of liability insurance (COI) will help improve your relationship with your clients, as they don’t want to risk being held fully liable for any damages that stem from collaborating with your business.
Commercial Property Insurance
Commercial property insurance covers the cost of repairing or replacing your cleaning business’ physical assets up to your policy limits. These assets typically include your office space, its furniture and fixtures, and your cleaning equipment and supplies. Business owners who lease commercial space can get property insurance for equipment and supplies.
Additionally, cleaning business owners should consider the following endorsements:
- Lost key coverage: Pays for rekeying a building if you or your employees lose the keys
- Employee dishonesty: Pays for a client’s property when an employee steals it
You can choose to insure your business property either at actual cash value or replacement cost. Actual cash value replaces at market value minus depreciation and has lower premiums, whereas replacement cost pays what it costs to replace the item at today’s value but has higher premiums.
Commercial Auto Insurance
Cleaning businesses that own cars, trucks, vans, or a combination of vehicles need commercial auto insurance in case one of their vehicles is involved in an accident. Policies can cover your repairs and medical bills, the other driver’s damages, and your attorney’s fees if the other driver sues. What your auto policy pays for depends on which coverage options you pick.
Commercial auto coverage options include:
- Liability: Pays the other driver’s medical and repair bills or your legal bills if they sue, as most states require you to have at least liability coverage for your business-owned vehicles
- Collision: Covers your repair bills after a car accident
- Comprehensive: Pays your repair bills after damage is caused by something other than a car accident like theft or vandalism
- Medical payments: Covers you and your passengers’ medical bills after a car accident, regardless of who caused the accident
- Uninsured/underinsured motorist: Covers your medical and repair bills after an accident with a driver who either doesn’t have coverage or whose coverage is insufficient for the damages
- Hired and nonowned liability: Pays the other driver’s medical and repair bills after an accident in a vehicle that’s rented, hired, or leased but not owned by your business
Personal auto policies exclude business driving when the vehicle in question is used primarily for business, but they may cover periodic business trips. Cleaning business owners who use their own car or truck for work need to review their policies or work with their agents to make sure they’re covered.
Inland Marine Insurance
Inland marine insurance is a type of property coverage that follows your equipment as it moves between work sites or is stored in an off-site facility. In comparison, commercial property insurance only covers items at the location listed on the policy. This is insufficient for most janitorial and cleaning businesses because most need to transport equipment and supplies to their clients’ homes or offices.
Aside from covering your business’s physical assets away from your main location, inland marine acts much like commercial property insurance. It covers similar perils, such as fire, wind, theft, and vandalism, and it can be written on an actual cash value (ACV) or replacement value basis.
Workers’ Compensation Insurance
Most states require businesses with even a single employee to carry workers’ compensation coverage to pay for employees’ lost wages and medical bills if they suffer a work-related illness or injury, such as:
- Chemically induced lung disease after years of inhaling toxic materials
- Broken arm after falling down the stairs
- Work-related lower back pain
In some states, workers’ comp policies include coverage for your legal defense if an employee claims that your negligence or intentional acts caused their injuries.
Umbrella Insurance
Umbrella insurance extends the limits of your other liability policies, which means it picks up where the others fall short. For example, if you have a general liability limit of $300,000 but your cleaning business has legal fees of $350,000, umbrella insurance covers the remaining $50,000.
Commercial umbrella policies only extend coverage on certain policies, including:
- General liability
- Employer’s liability
- Commercial auto liability
On top of providing additional coverage, a commercial umbrella policy can help you land large commercial jobs where the contract requires larger liability limits. Your umbrella coverage helps you meet the requirements and usually costs less than adding to your general liability limits.
BOP
A business owner’s policy, or BOP, is a type of insurance policy that combines both general liability and commercial property at lower premium costs. For small cleaning businesses with less than five employees, getting a BOP is cost-effective as compared to getting general liability and commercial property separately. Annual premium costs for a BOP for janitorial & cleaning businesses typically range from $1,500 to $3,800 and may increase depending on the services offered as well as the corresponding risks.
Surety Bonds
A surety bond, also called a janitorial bond, is a three-party agreement between your cleaning business, your client, and an insurer, or surety. The agreement states that the surety will pay the client if something goes wrong and then get reimbursed by you. Cleaning and janitorial bonds typically cost between 1% and 15% of the total amount of the bond.
Getting a surety bond is a great form of advertising for janitorial and cleaning businesses as it tells their current and future clients how trustworthy their business is. The bond protects clients in the event of theft by the business’s employees and typically is purchased for amounts ranging from $10,000 to $100,000 in coverage. Annual premiums for a surety bond start at $100.
Janitorial bonds typically cover two types of claims:
- Employee theft
- Failure to deliver on a contract
A surety bond works more like a guarantee than traditional insurance. This, plus the fact that your insurer promises first to pay and then get reimbursed by you, makes getting janitorial bonds more like qualifying with a lender than buying insurance from an agent.
Other Considerations With Janitorial & Cleaning Business Insurance
Licenses and Insurance
Contacting your state government before applying for a license is the best course of action as every state has its own rules regarding licensing. Some states either require janitorial insurance or a service contractor’s license to get your business licensed. Even if insurance isn’t required, getting insurance coverage to protect your business and earn current and future clients’ trust is good for your business in the end.
Janitorial & Cleaning Business Insurance for Home-based Businesses
If you run your business from your home, you’ll still need janitorial & cleaning business insurance, as most homeowner’s insurance policies exclude business activities. With a homeowner’s policy, your insurance company will most likely decline work-related claims such as a delivery person slipping on your front walk when they’re delivering cleaning supplies. Home-based business owners can usually cover their risks with a BOP.
Janitorial & Cleaning Business Insurance for Independent Contractors
Some insurance policies, such as general liability, exclude 1099 employees. Since your business can still be sued for the mistakes your independent contractors make, it’s important to work with an insurance company that can help you decipher your policy and advise you on what to do about the gaps.
Bottom Line
Whether you’re a sole proprietor offering house cleaning services or you own a janitorial cleaning company, you need quality small business insurance. Even if your business assets are limited and you don’t have expensive equipment to cover, you can still be liable for third-party property damage and injuries. Getting adequate insurance coverage is essential to protecting your business when the worst-case scenario happens.
Purchasing the right janitorial insurance for your company can be a relatively inexpensive way to protect against a loss so severe it puts you out of business. If you need reliable coverage for your cleaning business fast, connect with an expert at CoverWallet today.
