Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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cleaning businesss insurance

When starting a cleaning service a commonly asked question could be, do I need cleaning business insurance?

Many budding entrepreneurs feel that if they start out as a home-based business, which many cleaning services do, they do not have to worry about paying for insurance for the business. That is the furthest thing from the truth.

Home-based businesses like cleaning services should always have business insurance to protect their personal assets separately from the business assets.

Compare business insurance rates for your cleaning business right here by entering your zip code above. Find the best rates available by comparing online!

Starting a Cleaning Business

Cleaning businesses can be very profitable. The start-up costs are not expensive, and the business can be started with just one person until it begins to grow. While some people may think that a cleaning business only requires a broom and a bucket, it is still a business so the principles of starting a business apply, and there is a science to cleaning that must be understood.

Any business requires a sound business plan. There are aspects to the cleaning business that should be planned in order to prevent failure. In order to be successful, an analysis of the amount of time it should take to clean a home or office should be performed. The first cleaning visit will always take longer than subsequent visits, and the frequency of the cleaning visits will also be factors in the number of homes or offices cleaned each day. Travel time, and personal clean-up time are variables that will determine the financial viability of the business.

Rates, service area and marketing and advertising costs must be determined, as well as when to begin hiring staff or contract employees. All of these variables impact the bottom line of the cleaning business. And since the business owner or employees will be entering into other people’s homes or office space, insurance is critical to the continued success of the business.

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Necessary Business Insurance

To prevent expensive lawsuits when operating a cleaning business, there are certain small business insurance coverages that are a must.

Liability Insurance

This insurance is a business essential, especially when working in other people’s homes of offices. Should something accidentally breaks, or if an employee steals from the location being cleaned, public liability insurance will protect the business against claims for damages or injury made by a third party. Liability insurance is generally required for legitimate office environment cleaning contracts, and should be considered necessary for residential cleaning, as well.

What Liability Insurance Covers for a Cleaning Business

liability insurance

The liability insurance should also cover the use of chemicals, as some people may have allergic or more severe reactions to the chemicals used in cleaning products. Even using green products does not eliminate potential reactions to the solutions.

Liability insurance should cover accidental slips and falls that can occur due to wet floors in homes or offices. Even if the floors appear dry, falls from wet spots can occur by customers or cleaning service employees.

There should be clauses in the liability insurance policy that addresses the proper use of signs, especially when cleaning office buildings. The cleaning company prominently displaying all necessary signs is protected from people who ignore the signs and suffer accidents or injury.

Accidental breakage would include things like accidently pulling loose wires or cords that can mean computers are cut off and important information is lost, or a loose cord accidently causes items to fall. These are the small incidentals that are often overlooked in insurance policies but can be costly to the cleaning business owner.

There are several different types of liability insurances, and most will come with limits per occurrence. Typical liability insurance coverage starts at $1,000,000. Consult with an insurance broker who understands the needs of cleaning businesses and can provide competitive quotes.

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Janitorial Bond

A type of fidelity bond that is similar to insurance is good to have if the cleaning business employs workers, even contract workers. Most clients will ask the cleaning service if they are licensed and bonded before hiring. The bond covers any expenses in case an employee steals from the customer and is arrested and convicted. The cleaning service will not have to pay to cover the loss if the business has a third-party bond.

The rates for janitorial bond coverage will depend on the dollar amount of coverage and the number of employees. Standard coverage is $25,000, but the start-up one person business can probably purchase less.

Worker’s Compensation

If the cleaning business employs staff, the business should be paying worker’s compensation of all employees, including the owner if they are also cleaning in homes and offices. This eliminates any claims against the customer for injuries occurring in the place of cleaning.

Background Checks

background check

It is important to remember that even a person with a lengthy criminal history can work for a company that is bonded. Bond insurance does not ensure that only non-criminals are hired. Cleaning services business owners should always perform criminal background checks on employees not only locally, but nationally. It makes sense to also screen for substance abuse, as the employee will be entering homes and offices where valuables may be clearly displayed, and could be a temptation to someone with a drug problem.

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Do I Need Cleaning Business Insurance?

Even though it is an added expense to purchase the necessary cleaning business insurance, the money will be well spent if a customer files a lawsuit because the cleaner accidently knocked over the family heirloom vase that costs thousands of dollars. If an employee is accused of stealing from the employee’s desks in the office building that is being cleaned, the cleaning business owner can be facing an expensive lawsuit.

Protecting the business’ assets, or the business owner’s assets from a potentially damaging lawsuit through accidental acts will more than pay for the cost of the business insurance premiums. Determine the business insurances and levels of coverage required then request rate comparisons from reputable insurers to ensure getting the best deals.