Types of Cleaning Business Insurance

Cleaning businesses face unique risks, which makes it essential to have the right insurance coverage. Whether you operate a residential cleaning service or a commercial cleaning company, the right insurance protects against unexpected events. To protect your investment, there are several types of cleaning business insurance that you should consider, from general liability insurance to a business owner's policy (BOP).

Below are the main types of insurance for cleaning businesses, each serving a specific purpose.

General liability insurance for cleaning businesses protects against bodily injury and property damage claims. For example, suppose a client trips over cleaning equipment and gets injured. This insurance would cover medical expenses and legal fees if they pursue a lawsuit. Additionally, if an employee accidentally damages a client's property, such as breaking a valuable item, cleaning liability insurance helps pay for repairs or replacements.

Cleaning businesses that own or lease a physical location should consider getting commercial property insurance. This coverage safeguards your business properties — such as cleaning equipment, supplies and office furniture — from risks like theft, fire or vandalism. For instance, if your office suffers damage from a fire, commercial cleaning insurance helps cover the costs of repairs and replacements.

Workers’ compensation insurance is crucial for cleaning businesses that employ workers. This cleaning business insurance provides financial support for employees who sustain work-related injuries or illnesses, covering medical expenses and lost wages. For example, if a cleaner slips and injures themselves while on the job, workers' compensation ensures they receive medical care without financial strain on the business.

Additionally, workers’ compensation insurance protects cleaning businesses from potential lawsuits related to workplace injuries. Without this coverage, an injured employee might seek damages through legal action, which can result in substantial financial burdens.

Also known as errors and omissions (E&O) insurance, professional liability insurance is essential for cleaning businesses that offer specialized services. This coverage protects against claims arising from professional negligence or failure to deliver agreed-upon services. For instance, if a client alleges that your cleaning methods caused damage to their property, cleaning service insurance provides the necessary financial support for legal defense and any settlements that may arise.

Professional liability insurance also safeguards your business from dissatisfaction claims related to service quality. If clients feel that the cleaning provided did not meet their expectations, they may file a complaint. This insurance helps cover the costs associated with addressing these claims.

Consider getting commercial auto insurance if your cleaning businesses use vehicles for operations. This coverage protects your vehicles from accidents, theft and damage while used for business purposes. Suppose an employee driving a company vehicle gets into an accident while heading to a job site. In that case, commercial cleaning insurance helps cover repair costs and any liability arising from the incident.

Furthermore, commercial auto insurance typically covers all business vehicles, including vans and trucks, for transporting cleaning supplies and equipment. This is particularly important for cleaning companies that rely on specialized vehicles to perform their services.

Business interruption covers lost income and ongoing expenses when a disaster disrupts operations. This can occur due to fires, floods or other unforeseen incidents that make your facility unusable. For example, cleaning business insurance can compensate for lost revenue if a fire damages your office and you cannot operate for several weeks.

A BOP combines several types of insurance coverage into one comprehensive package, making it an ideal option for cleaning businesses. Typically, a BOP includes general liability insurance, commercial property insurance and business interruption insurance. This bundled approach simplifies the insurance purchasing process and often results in cost savings compared to acquiring each coverage separately.

Fidelity bonds are an essential form of insurance that protects clients against theft or dishonesty by your employees. Suppose an employee is found to have stolen from a client. In that case, the bond compensates the client for their loss, helping maintain your company's reputation and client relationships. This coverage is especially valuable for cleaning businesses that manage sensitive or valuable items in clients' spaces, such as jewelry or electronics.

Having the right cleaning business insurance not only protects your financial investment but also builds trust with clients. Below are the main reasons why insurance is crucial for cleaning companies:

• Protection against liability claims: Cleaning businesses face numerous liability risks, such as accidents causing injury or property damage. As mentioned earlier, cleaning liability insurance helps cover medical expenses and legal fees in the case of liability claims.
• Enhances credibility: Clients are more likely to hire insured cleaning services. Insurance for a cleaning business demonstrates professionalism and a commitment to high standards, making customers feel their properties are in safe hands.
• Compliance with legal requirements: In many jurisdictions, certain types of insurance, such as workers’ compensation, are mandatory for businesses that employ workers. By prioritizing business insurance for cleaning companies, you ensure compliance with local laws, avoiding potential fines and penalties.
• Attracting higher-value clients: Many larger clients, particularly in commercial cleaning, require proof of insurance before contracting services. Comprehensive cleaning company insurance allows you to bid on lucrative contracts and expand your clientele, as clients feel more secure working with a company that prioritizes risk management.

The cost of cleaning business insurance depends on several factors, including the size of the business. Based on MoneyGeek’s analysis, the average price for general liability insurance is around $22,815 per year for an LLC with 20 employees. In contrast, a sole proprietor with no employees pays around $1,007 annually. This stark difference highlights how the number of employees can significantly impact insurance costs for cleaning businesses, as more employees generally lead to higher premiums due to increased risk exposure.

To help you better estimate your potential insurance expenses, here are the average monthly costs for the main types of insurance according to Insureon: general liability insurance averages $48 per month, while workers’ compensation is around $136. If you opt for a BOP, you can expect to pay about $76 monthly, and commercial auto insurance costs approximately $173. These figures represent the median costs of policies purchased by cleaning businesses through Insureon.