Self-Employed House Cleaner’s Deep Guide To Insurance

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Insurance is a vital layer of protection for your cleaning business. Insurance helps shelter you against storms that can wash away your business and years of hard work due to injury, accidents, criminal activity or natural disasters.

All cleaning businesses need insurance. Whether your cleaning business is residential or commercial, solo, with a partner or with employees, there are special risks to providing cleaning services in a customer’s home.

That is on top of the risks all businesses face from flood, fires, earthquakes, theft and lawsuits.

Getting Started With Insurance

If you are just starting out and clean only one house a week, you need to be insured. You also need insurance even if your customers provide cleaning supplies and equipment. Getting a basic liability insurance bundle plus a surety bond should be at the top of your start-up list.

Get quotes from several insurance companies through a commercial insurance agency. Commercial insurance agencies work with many different insurance companies. Try to find an agency experienced in working with house cleaning or janitorial services.

An agent can help you find policies with coverage that suit your particular needs. Your agent can put together a bundle of policies that cover everything from general liability to commercial auto insurance.

Your agent at the insurance broker should also provide you with an updated certificate of insurance every year. A current certificate of insurance can be posted on your website or shown to prospective customers during your walkthrough.

Blank certificate of insurance form
Certificate of Insurance form

When you are just starting out, you should be able to pay your insurance premium in monthly installments. At $50 to $85 per month you should be able to cover your monthly insurance premium with one cleaning.

As you get more established, it is a good idea start paying your premium once a year to save on monthly installment service fees.

Your business insurance premiums are tax-deductible, since they are viewed as part of the cost of running a business by the IRS.

Cleaning Business Insurance for Sole Proprietors and Partnerships

2 men working as cleaning business partners
Photo Credit: Andrey Popov

General Liability

Residential house cleaners should carry at least one million dollars ($1,000,000) in general liability insurance. General liability insurance covers your business against financial loss due to claims of damage caused by you or your workers for which you are legally responsible.

Umbrella Liability

Umbrella insurance policies cover liabilities over and above the limits of other policies in your business policy bundle, especially for lawsuits against your company.

Property Damage

Property Damage insurance covers damage to your customer’s property while in your care, custody or control. Property damage can happen in the course of your cleaning activities or while providing extra services like laundry.

For example, I once used a steam mop on a customer’s cork flooring in their kitchen. For some reason, I left the mop head steam side down on the floor while I did something in another room. When I came back I found steam from the mop had warped one of the cork tiles. In the middle of the kitchen floor!

Aarrgh!!!

I was fortunate the customers didn’t scream about that warped tile. As it turns out, they were a few weeks away from a total kitchen remodel that included replacing their cork floor tiles with porcelain tiles.

Worker laying cork floor tiles
Laying cork floor tiles

Instead, the customers said the “four magic words” and I didn’t have to replace that tile.

Whew! Replacing that one warped cork tile plus the surrounding tiles could have cost my business hundreds of dollars.

Lost Key

Lost key insurance covers loss of your customers keys. Policies cover the costs of re-keying customer locks, install new cylinders and providing new master keys.

This coverage is really needed when cleaning high-end homes or offices where the cost of re-keying locks, new locks and cylinders plus new master keys can run into thousands of dollars.

Premises Liability

Premises liability insurance covers injuries to workers, customers or others (like other tradespeople) that happen at a job site (your customer’s home) for any damages caused by your work. This insurance is often sold in a bundle with other types of liability insurance.

Medical Expenses

Medical Expenses insurance pays medical costs in case of injury or accident on your premises or because of your work in a customer’s home. This insurance is often sold in a bundle with other types of liability insurance.

Commercial Automobile

Business Automobile or Commercial Auto insurance covers you in case of financial loss from accidents involving your business vehicle. If you use a personal vehicle for business purposes, your personal auto insurance policy may not cover business related incidents.

You may need a Commercial Auto policy if:

  • Any of your vehicles are owned by a partnership, LLC or corporation
  • Any of your vehicles are registered or titled to a business, including corporation or partnership
  • Any of your employees or you rent or lease vehicles for business purposes
  • Any non-listed drivers use their own vehicles to conduct business on your business’s behalf

Cyber Liability

Cyber Liability policies provide liability protection in cases of online security and privacy breaches that exposes important information about your customers and your business. This insurance is important if:

  • you process prospective and new customers through website forms
  • maintain a customer portal on your website
  • accept online payments

Surety Bonds

A Surety Bond (or janitorial bond) is insurance that protects your customer and pays them if you are found guilty of theft. Some bonds only cover you if you or your workers are convicted of theft.

Bonds without a conviction clause may cost twice as much as a conviction clause bond. Be aware that convictions may take up to three years. So you can actually save time and money with bonds that do not require a legal conviction to pay your customer.

Do You Need A Bond?

There are different opinions about whether solo cleaners or partners need bonds. After all, the cleaning business is yours. You and your partner are not employees. So you are not likely to do anything to cause the headaches that theft (suspected or real) brings into your business.

If things go missing in your customer’s home, your relationship with your customer suffers. Your business reputation suffers. Your business takes a financial hit, from which it may never recover. You and your partner may be arrested and convicted of theft.

You are aware of these bad outcomes and would probably do everything you can to avoid even the appearance of dishonesty. So why would you as a solo house cleaner or cleaning partnership want to pay for a surety bond?

Related: The Dirty Dozen: 12 Things Not To Do In Your Cleaning Customers Homes

The short answer is: to put your customer’s mind at ease. A bond insures your customer will be repaid in cases of loss by theft or dishonesty.

A bond is worth the money for solo and partner cleaners because it helps build trust.

For me, a bond costing $100 per year is a small price to pay to let my customers know I’m looking out for them. That’s not a bad deal for twenty-seven cents (.27¢) per day. By comparison, you can’t get a bag of potato chips for under a dollar ($1.00).

How A Bond Works

Your customer tells you they are missing a genuine pearl necklace. They insist the last time they saw the necklace before your you or your worker’s cleaning visit.

Your customer then calls the police and files a report about the possible theft. The police do an investigation.

If they find proof that you or your worker stole the necklace, the bond would pay the customer the cost to replace the necklace. That is, if the necklace has not been returned by whomever took it from your customer.

Once the bond is paid out, you are required to repay the bonding company the cost of the necklace.

Reserve Fund “Insurance”

Finally, there is your Reserve Fund or Oops! Fund. I use a special savings fund to cover small items broken in my customers homes. I usually keep between $500.00 to $800.00 in this fund.

This fund has covered everything from broken wine glasses and holiday ornaments to broken vacuum cleaners. Using this fund makes it possible for me to quickly reimburse customers for small damages without going through my insurer.

Related: Find out how to save a Reserve Fund using a sub-account of your business savings account.

Insurance You Need If You Hire Employees

If you decide to hire workers, you must have liability insurance and bonding for your business. Even if you only have one part-time helper. Your helper is an employee in the eyes of the law and needs to be included in your business insurance.

To be covered by your insurance, workers must be payroll employees and not sub-contractors. Each person you hire will increase your liability insurance, but the coverage is worth the cost to your business.

If you are an employer in the US, you must also pay for workers’ compensation insurance, unemployment insurance and state disability insurance.

Workers Compensation (Workers Comp):

For businesses with employees, Workers Compensation (Workers Comp) insurance is often a legal requirement. Workers compensation insurance for house cleaning companies can cover:

  • Medical payments
  • Lost wages
  • Rehabilitation expenses
  • Death benefits

Workers Comp rates vary depending on your state. Most states require you purchase Workers Comp from private insurance companies.

Four states (North Dakota, Ohio, Washington and Wyoming) require you to purchase from a state fund.

Only two states, Texas and South Dakota don’t require Workers Comp insurance.

Commercial and residential cleaning businesses are considered high risk. Online business insurance quote site, Insureon posted a graph showing median (half pay more, half pay less) Workers Comp premiums by industry:

Graph of median workers compensation premiums by industry

Unemployment Insurance

Unemployment insurance covers workers who become unemployed through no fault of their own. Unemployment insurance provides weekly benefits to those workers. Unemployment insurance is overseen by the U.S. Department of Labor and individual states.

Unemployment insurance benefits are funded through taxes you pay on behalf of your employees. In some states, your employees pay this tax.

Unemployment taxes are kept in a state-controlled fund. When your employee loses their job, the insurance will then pay from that fund. Learn more about Unemployment insurance here.

State Disability Insurance

Only five US states (and the territory of Puerto Rico) require state disability insurance. They are:

More Insurance For Employers

Hired or Non-Owned Auto (HNOA)

This insurance policy covers your business for accident expenses involving cars, vans or trucks your business uses, but doesn’t own. That includes rented vehicles, as well as, your employees personal cars used during work.

All of your employees should carry personal auto insurance policy for their vehicles. In some cases, the employee’s insurance cannot or will not cover all claims. HNOA insurance can cover those costs.

Hired and Non-Owned Auto (HNOA) insurance adds an extra layer of protection for your cleaning business in case of accidents where the other driver sues both your employee and your business for medical treatment and car repair damages.

Employee Practices Liability

This liability policy covers legal fees for gender, race, age discrimination, harassment, wrongful termination and retaliation lawsuits.

Fidelity Bonds

A house cleaner caught stealing from a customer on camera
House cleaner caught stealing on camera – see video

If you have employees, a fidelity bond or 3rd Party Dishonesty Bond helps cover your business. These bonds cover loss of money or property due to theft by an employee.

Bonds can be purchased with or without a conviction clause. Also get coverage for “dishonest acts” by an employee that damages your customer’s property.

It’s important to get coverage that kicks in even if there is no conviction. Especially if there is evidence of the dishonest act and damage.

This short video (1:40) by Surety Solutions explains different types of fidelity bonds available to business owners.

Insurance For Cleaning Subcontractors

Subcontractors are business owners. As business owners, they need to carry their own business liability and commercial auto insurance.

Your insurance company may require your subcontractors provide proof of insurance. It is a good idea to review your subcontractors certificate of insurance and auto insurance coverage once a year to make sure it is current.

Insurance Is Worth The Cost

Business insurance for self-employed house cleaners can be a confusing and expensive subject. When you are just starting out as a solo or partnership business, it’s important to find a good commercial insurance agency.

Your agent will help you put together a policy bundle that includes general liability, umbrella liability and any special type of insurance your business may need.

If you decide to hire workers, business insurance becomes more expensive, more complicated and more necessary.

Insured cleaning businesses are able to command the highest rates and the deepest trust—for good reason. Carrying business insurance shows you care about your customers and your business.

Business insurance is worth the cost. Get your business protected from the mishaps and storms we all face in life.

Have you found insuring your cleaning business scary and confusing? Share your story of how you got set up with business insurance in the comments below. ⬇︎

Photo Credits: Woman with yellow umbrella Anton Kornieiev

Rainy Window: Matthias Uhlig

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