What is cleaning insurance?
Cleaning insurance is a policy designed specifically for cleaning businesses (and professional solo cleaners). Whether your business offers residential or commercial cleaning or specialized services such as window washing or carpet cleaning, this policy will protect it.
You or your employees may be the most careful, most professional cleaners in the world, but no one is infallible. Everyone is capable of mistakes, and in business, mistakes can be costly. Insurance can help you avoid unnecessary losses and keep chugging along without much downtime.
Who needs cleaning insurance?
Anyone who owns or operates a cleaning business, including solo cleaners, small cleaning companies, and larger agencies. Even if you're just starting out, having insurance coverage is essential for protecting your investment and reputation. In fact, most cleaning contracts require you to be insured to avoid mishaps down the road.
Some examples include:
- Professional cleaning companies: These are businesses offering residential, commercial, or industrial cleaning services need insurance to protect against potential liabilities, such as property damage or personal injury.
- Independent cleaners: Those who freelance or self-employed cleaners should have insurance to cover any accidents or damages that might occur while working in clients' homes or offices.
- Janitorial services: Companies that provide janitorial services in office buildings, schools, or public facilities need insurance to cover potential risks associated with their work.
- Specialized cleaning services: Businesses offering specialized cleaning, such as carpet cleaning, window washing, or hazardous waste cleanup, require insurance due to the specific risks involved in their services.
What does cleaning insurance cover my business for?
What gets covered will depend on the kind of policy you have. There are two types:
- Named perils: This one provides protection strictly against the perils listed on the policy. No more, no less. As you can imagine, this can be pretty limiting, since anything that isn’t listed will be an exclusion. Because of this, this policy type is the cheapest one you can purchase.
- All risk: This one protects your business against all perils – unless the peril is listed as an exclusion on the policy. This is the more inclusive policy of the two, and as a result, will cost more.
Regardless of the policy you choose, you should get coverage for the following:
- General liability: This is the backbone of cleaning insurance. It covers bodily injuries, property damage, and personal injury claims that may arise during your cleaning operations. For example, if a client trips over your vacuum cleaner and gets injured, general liability insurance will cover the medical expenses and any legal costs that follow.
- Tools and equipment: This protects your business property, including your office, cleaning equipment, and supplies, against risks like fire, theft, and vandalism. If your vacuum cleaners or other expensive equipment are stolen, this policy will help replace them.
- Workers' compensation: If you have employees, this is essential. It covers medical expenses and lost wages for employees who get injured or fall ill due to their job. In a physically demanding job like cleaning, this protection is crucial for both you and your employees.
- Commercial vehicle(s): This coverage is required by law in Canada if your cleaning company uses cars to transport employees and equipment. It protects your company vehicles from damage, theft, and accidents.
What insurance coverage add-ons are recommended for cleaning businesses?
A few add-ons can improve your cleaning insurance policy and offer extra levels of protection above and beyond the basic coverage. Typically, add-ons will include:
- Equipment breakdown: This add-on covers the cost of replacing or repairing cleaning equipment that breaks down due electrical or mechanical problems. The cleaning sector depends heavily on machinery, so having this coverage helps prevent expensive disruptions.
- Inland marine insurance: Though the word ‘marine’ may imply the presence of boats, water or fish, what this refers to is high-value items transported over land – typically by train or truck. Those high-value items are likely to be your tools and equipment, such as your floor buffer, carpet extractor or vacuum cleaner.
- Employee dishonesty: Not all employees have your best interests in mind. In fact, some may even subject your cleaning business to theft or fraud (or both). This coverage will protect your company from any financial losses this may cause.
- Cyber liability: If your business stores sensitive client information digitally, this add-on is crucial. It protects against data breaches and cyber-attacks, covering the costs of recovery and legal fees.
How much does cleaning insurance cost in Canada?
We wish we could give you a standardized rate right here and now, but we can’t. That’s because insurers use your business’ unique attributes to calculate the cost – and they each have their own unique method of doing so. That said, if we were to ballpark it, we’d say a midsized cleaning business should expect to pay from $700 to $2,000 per year for a standard policy.
Even in this statement we had to use a qualifier: ‘midsized business.’ Bigger businesses would cost more to insure and smaller ones less. Insurance companies can get very granular when assessing your business, which is why pinpointing the exact cost without any details about your business is near impossible.
What factors determine the cost of cleaning insurance rates?
So, which factors will influence the cost of your cleaning insurance rates, you ask? Here are some of the most common ones:
- Business size and revenue: Larger businesses with higher revenues generally face higher premiums. This is because they typically have more clients, employees, and assets at risk.
- Value of your assets: The more expensive your assets are – such as your tools and equipment – the more they will cost to protect.
- Type of services offered: The specific cleaning services you provide affect your insurance costs. For example, a business specializing in hazardous material cleanup will have higher premiums than one offering standard residential cleaning.
- Claims history: If your business has a history of frequent claims, insurance providers may view you as a higher risk and charge higher premiums. Maintaining a clean claims record can help keep your rates lower.
- Location: Your business's location can impact your insurance costs. Areas with higher crime rates or stricter regulations may result in higher premiums.
- Coverage limits: Higher coverage limits provide greater protection but also come with higher premiums. Balancing adequate coverage with affordability is key.
How does cleaning insurance work?
You buy a policy from the insurance company of your choice, and they provide your cleaning business with financial protection against various risks. When putting together a policy with your provider, you can opt for annual or monthly premiums, depending on your financial situation, as well as choose the coverage you want and the limit of that coverage. You also get to set your deductibles (the amount you have to pay out of pocket in the event of an incident).
Should something happen during your business operations, such as an employee getting injured, you can file a claim with your provider, who will then either approve or decline it, depending on its validity. After that, you’ll get your payout – minus the deductibles. Your premiums may also go up as a result.
How to get the cheapest cleaning insurance quote
To get the cheapest quote for your cleaning business, you’d have to get creative. Here are some things you can:
- Bundle multiple policies: If you already have insurance for your business vehicle (which is a legal requirement in Canada), you can bundle it with general liability insurance or workers’ compensation insurance to get a discount.
- Increase your deductibles: The higher the deductibles, the less you have to pay in premiums. This is a double-edged sword, however, as you’d have to pay more out of pocket should an incident occur.
- Avoid unnecessary claims: This may seem a little oxymoronic, as insurance, by design, requires claims. However, not all claims are equal. For instance, if your equipment malfunctions but the fix is cheap, then consider paying for it out of pocket instead of filing a claim. This will be cheaper for you in the long run.
- Ask for discounts: If you belong to a professional association or have taken any safety courses, you may be eligible for a discount. So, don’t be shy and ask your provider about any discounts they may be offering. You might be surprised by the answer.
- Compare quotes: Most businesses will go with the first insurance provider they find. That’s a mistake. Each provider will offer you their own unique quote, meaning that it’s always a good idea to shop around and compare quotes. Better yet, consult an online comparison tool like RATESDOTCA to see quotes from multiple providers in one go (and in seconds!).
