How Much is Insurance for a Cleaning Business?

If you own a cleaning business or are considering starting one, you should know what insurance coverage you need to protect yourself from lawsuits and business losses.

Like most businesses, you may want to invest in general liability insurance, commercial property insurance, and more. But how much is insurance for a cleaning business? General liability insurance is the primary type of coverage you’ll want to have, and it costs about $50 per month for most independent contractors, according to Insureon.

Let’s examine the different insurance coverages available for your cleaning business and what they may cost.

Key takeaways

• General liability insurance is important for all businesses, including cleaning businesses. It costs about $50 per month on average.
• A business owner’s policy bundles general liability and commercial property insurance coverage.
• Business insurance costs vary depending on the types of coverage needed, deductibles, policy limits, and other factors.
• Cleaning businesses with employees are usually required by state laws to carry workers’ compensation insurance.

How much is insurance for a cleaning business?

The cost of insurance for a cleaning business depends on several factors. You may need different types of insurance coverage based on the size of your business.

For example, if you are a solo entrepreneur without a physical location, you can probably get by with general liability insurance. However, if your cleaning business is larger, has employees, an office location, and company vehicles, you’ll also need commercial property, workers’ compensation, and commercial auto insurance.

Other factors, such as where your business’s location, years in business, past claims, coverage limits, deductibles, type of cleaning, and the risks involved, also impact how much insurance costs for your cleaning business.

According to Insureon, an online insurance agency, here are the average monthly costs for the insurance coverage you may need for your cleaning business.

Types of business insurance for a cleaning business

There are different types of insurance coverage you may want to carry when you own a cleaning business. Which types of insurance you should have depends on the size and scope of the operation.

For example, you may not need workers' compensation coverage if it is just you. However, you will likely be legally required to carry workers' compensation if you have employees.

Here are the main types of insurance you may need with a cleaning business.

General liability

General liability insurance is coverage that every business owner should have. It can protect you from lawsuits if you are found liable after a customer is injured or their property is damaged in relation to the work that you have done. For example, if they slip on a floor that you just waxed or if one of your employees accidentally breaks a valuable lamp in their home.

General liability insurance also covers “advertising injury” if an advertisement for your business causes slander, libel, violation of privacy, or copyright infringement. If you are found liable, your general liability insurance will pay the injured person's damages, attorney fees, and medical bills.

Commercial property

You’ll need commercial property insurance for your cleaning business if you have a physical location, but it is also good coverage if you have expensive equipment. This coverage helps pay for repairing or replacing your building and equipment if it is damaged in a covered event like fire and storms, as well as vandalism.

Business owner’s policy

A business owner’s policy (BOP) is a bundled policy that includes general liability and commercial property insurance. Combining the two coverages may save you money. The average policy limits on a BOP are $1 million per incident and $2 million aggregate.

A BOP may also include business interruption insurance, which helps cover your costs and lost income if you have to close your business temporarily because of a fire, water damage, or other event covered under your commercial property insurance.

Workers Compensation

Most state laws require cleaning business owners to carry workers' compensation insurance if they have employees. Workers’ compensation pays medical bills and lost wages for employees injured on the job. If the employee’s injuries prevent them from returning to work for a while, your policy provides them with benefits until they can return.

Commercial auto insurance

Commercial auto insurance is a must if you own and operate vehicles for your cleaning business. This insurance coverage is usually required by laws in your state.

Like personal auto insurance, commercial auto insurance covers repairs or replacement of your cleaning vehicle if it is involved in an accident, as well as medical expenses if someone is hurt. The cost of your commercial auto insurance can vary depending on the age and value of the vehicle, and the driving record of those who operate it.

Surety bond

When customers are looking for a cleaning business to hire, they often look for one that is “bonded and insured.” This means the cleaning business carries a surety bond, otherwise known as an employee dishonesty or janitorial service bond.

This bond ensures that if one of your employees steals from the customer, the company that issued the bond will reimburse the customer. You will then be required to reimburse the bond carrier for the claim.

Although surety bonds aren’t required for a cleaning business, they are a good idea to provide peace of mind for your customers. Some customers may require you to have a surety bond before they hire you.

Commercial umbrella

If you need more liability coverage than your general liability insurance, you could get a commercial umbrella insurance policy that provides extra protection. Commercial umbrella insurance is usually available in $1 million increments.

For example, if a customer required you to carry $2 million liability coverage, but your general liability insurance only covered up to $1 million, you could get a $1 million commercial umbrella policy to meet the customer’s needs.

Factors in business insurance costs

Many factors influence the cost of insurance for your cleaning business. Things that can impact the cost of business insurance include:

• Business location: Where you operate your business can affect how much you pay for business insurance. Your insurance may cost more in an area prone to hurricanes or flooding. Higher crime and vandalism rates in the area can also increase insurance rates. If your business operates out of a commercial building, then the size and condition of the building also impact your cost of insurance. You’ll also likely pay more for insurance if your office gets a lot of foot traffic.
• Risk involved: The riskier your business, the higher your business insurance cost will likely be. For example, if your business cleans windows on high-rise buildings, you will likely pay more than if you clean residential homes.
• Years in business: If you’ve been in business for several years, you should have more experience than someone just starting out. Your experience can mean you’re less likely to make a mistake and trigger a claim, so your insurance company may charge you less for coverage.
• Claims history: Having a lot of insurance claims and the types of those claims can also drive up your cost for business insurance.
• Number of employees: Workers compensation insurance is required by law if you have employees at your business. The more employees you have, the more expensive your insurance will cost you. The number of employees you have may also impact your costs for general liability insurance and commercial auto insurance (if those employees drive company vehicles).
• Business equipment: Your cost for business insurance may also be higher if you have expensive equipment that needs to be covered under your commercial property insurance.

FAQ

Cleaning business insurance: bottom line

A crucial part of operating a successful cleaning business is protecting yourself and your business with adequate business insurance. Even if you’re just a one-person operation cleaning residential homes, you risk losing everything if you don’t at least have general liability and commercial property insurance coverage.

The cost of insurance for a cleaning business can vary depending on the type of insurance coverage, policy amount, deductible, number of employees, and other factors. However, the cost may be worth it if you ever get sued or your business is damaged in a fire or other covered event.

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