Customer Success

Insurance 101 for Your Cleaning Business

July 12, 2021

For any cleaning company, insurance is necessary. Follow our guide to getting general liability, workers comp and equipment insurance as an Airbnb cleaner.

For any cleaning company, insurance is necessary; if you’re an Airbnb cleaner, insurance, licensing, and bonding can help you get more jobs in the marketplace. If you’re unsure how to obtain insurance for your small cleaning business, follow our guide to getting insured as an Airbnb cleaner.

What are the different types of insurance for a cleaning business?

These are three main types of insurance we recommend for small cleaning businesses:

1. General liability insurance 

This usually covers legal fees, property damage by a cleaner, medical expenses for injuries suffered or caused by a cleaner, libel, and slander.

2. Workers’ compensation insurance

Workers’ comp covers bills associated with medical treatments, including work-related injuries. It also covers the wage of the person being treated while out of work.

3. Tools and equipment insurance 

Tools and equipment insurance covers your gear if it gets stolen or damaged in certain circumstances, such as being stolen out of your trailer on the job or damaged by another person.

How much is insurance for an Airbnb cleaner?

Generally, liability and property insurance can go from $500-$1000 per year. However, some states and policies can be more costly than others. For example, we obtained general liability insurance quotes for a cleaning business in Hawai’i.

What affects the price of insurance premium quotes? 

It includes, but is not limited to, these four factors: 

  • The size of your business – The more employees you have, the more coverage you need to obtain.
  • The industry you are in – A commercial window cleaning business will require more coverage than a small janitorial company.
  • Your location – Some U.S. states have different laws and regulations that require other policies.
  • The amount of coverage you need – If your work is deemed high-risk, you might need more coverage than a less risky industry.

General Liability Insurance

How much is general liability insurance, and what does it cover?

The monthly and down payment costs of general liability insurance vary based on your business. We obtained quotes from 3 different companies for an experienced cleaner looking to insure their company as the sole proprietor. Here’s what we found:

General Liability insurance covers the following:

  • Employee Injury and illness expenses
  • Employee injury lawsuits
  • Compliance with state laws

For most companies, general liability insurance provides the following numerical liability limits:

$1,000,000 per occurrence (claim)

$2,000,000 per aggregate = (sum of claim)

$100,000 per premises rented (Home office/place of business)

$5,000 per medical expenses

$1,000,000 per injury

$2,000,000 per third location (location of work, i.e. the cleaned house)

Deductible = $0 in case of a claim

Some companies will charge a deductible depending on the amount of the claim. If needed, the coverage of all the listed estimations above can be adjusted to your preferences. The premium, down payment, and monthly payments depend on the following factors:

Managers and business owners should supply employees with necessary safety equipment and procedures to avoid injury. Ensuring employee safety will also decrease workers’ comp premiums.

Why should I get general liability insurance?

As the most important coverage for small cleaning businesses, general liability insurance covers third-party liability such as:

  • Third-party property damage – If you damage or destroy an object or possession, such as a vase or a painting—you could be sued for property damage.
  • Third-party bodily injury – If someone slips on a freshly waxed floor or has an allergic reaction to cleaning chemicals, you could be sued. However, only non-employees are covered here. Workers’ compensation, which we’ll go over later, covers injuries or illnesses that your employees may acquire on the job.
  • Personal and advertising injury – Competitors and third parties could sue you for libel or copyright infringement.

Aside from insurance backing, if something goes wrong, getting insured also increases your chances of getting hired. If you use a cleaner marketplace like TurnoverBnB, you can stand out amongst your competitors by showing proof of insurance, bonding, and licensing in the form of “badges” displayed on your cleaner profile. Property managers and homeowners are more inclined to hire cleaners with these credentials than those without.


Workers Compensation Insurance

How much is workers comp insurance, and what does it cover?

According to primepay.com, workers’ comp insurance is calculated according to how employees are classified (regarding the specific type of work they perform) and the rate assigned to each employee classification. The premium rate itself is expressed as dollars and cents per $100 of payroll for each class code. The National Council on Compensation Insurance (NCCI) determines the classification rate and experience modification factor (MOD) in most states.

Factors of workers’ comp premiums:

  • Payroll
  • Location
  • Number of employees
  • Industry and risk factors
  • Coverage limits
  • Claims history

Formula for Calculating Workers Compensation Premium

(Annual Payroll / 100) x Workers Comp Insurance Classification Rate x Experience Modification Rate = Estimated Compensation Cost

Need help calculating? Here’s an example of a workers comp premium using the formula:

Say you own a cleaning company in Hawaii. Your rate based on classification is $1.68, and you have an annual payroll of $46,000, which makes your payroll $460. You also have an average claims history, so your modifier is 1.00. In this scenario, your rate would be calculated as follows:

(46,000/100) X 1.68 X 1 = $773.80

Insurers calculate workers’ compensation premiums using slightly variated formulas, and their calculations can be very different from company to company. Even more, these formulas depend on the workers’ compensation laws in each state.

Therefore, the rules will depend on where your business is based. For example, North Dakota, Ohio, Washington, and Wyoming require companies to purchase workers’ compensation insurance through a monopolistic state fund.

To guarantee that you find the best price for your business, it’s recommended that you request quotes from a mixture of workers’ compensation insurance providers. Moreover, you can use an independent agency or broker who can assess the options and offer you the most competitive rates available for your cleaning company.

How can I get workers comp insurance?

Insureon’s Workers Comp State Law Tool is a search bar that will help you find more information about regulations according to state. For instance, workers’ compensation insurance is not required in Florida if they have a team of less than 5. However, workers comp insurance is required in New York even if there is only one employee.

Sole proprietors, independent contractors, self-employed workers, and partners are not required to get workers’ compensation. However, you can purchase a policy to protect yourself, too.


Tools and Equipment Insurance

Tools and equipment insurance for cleaning company
Photo by La Miko from Pexels

From your carpet cleaning machine to a commercial steam cleaning machine, it is essential that you insure your heftier equipment. Tools and equipment insurance covers your gear if it gets stolen or damaged in certain circumstances. This coverage is ideal for those who bring their own tools to work.

Tools and equipment insurance provides financial help to protect equipment owned by you and employee tools or clothing. In addition, it can even protect borrowed equipment when you choose to add more coverage. 

How much does it cost?

Basic tools and equipment coverage can start at $12.50 a month. According to insureon.com, the median premium for a contractor’s tools and equipment insurance is $14 per month or $169 per year.

Depending on how much coverage you want on your assets, you can increase your policy according to your needs. Most insurance companies offer tools and equipment insurance as an add-on to general liability.

Resources to help you get started:

Insureon’s Small Business State search tool will help you find insurance regulations in your state. Click on the link to get started by choosing your state and reading through the list of steps to get quotes for general liability insurance.

Once you’re familiar with your state’s rules and requirements, it’s time to get busy. Some people prefer speaking with an insurance representative for a quote, while others prefer browsing websites. Whichever method is more comfortable for you, make sure you do thorough research for at least five companies and policies. Draw similarities between quotes and take notes of their customer service.

Once you find an insurance company and policy that aligns with your business goals, confirm the policy and payment information. Lastly, be sure to keep in touch with your primary agent to oversee your insurance needs if they may change.

What insurance companies do actual cleaners recommend?

Sifting through the many companies and insurance policies, you may be wondering what actual Airbnb cleaners use to insure their cleaning company. Additionally, the air hosts forum for Airbnb hosts suggests Allstate and Hiscox as their top insurance companies.

Airbnb professional cleaners group on Facebook, which is comprised of professional short term rental and Airbnb cleaners, favor the following companies for General Liability Insurance:

Other insurance policies you might need for your cleaning company:

Insurance for cleaning company, auto insurance
Photo by JESHOOTS.com from Pexels

Commercial auto insurance: Commercial auto insurance protects vehicles purchased by your business. However, it can also cover injuries and property damage in an accident, theft of a company vehicle, and certain types of vehicle damage.

Business owner’s policy (BOP): A BOP is a cost-effective way for a cleaning business to purchase general liability insurance and commercial property insurance together. Small, low-risk cleaning businesses are usually eligible. Property insurance pays to replace or repair your insured gear when it’s lost or damaged because of:

  • Fire
  • Theft
  • Vandalism
  • Certain weather events

You can purchase property insurance on its own. Still, because you own a small business, you may be able to bundle your property and general liability coverage together in a business owner’s policy. This can save you some money on your premiums.

Commercial umbrella insurance: Cleaning businesses can purchase umbrella insurance to increase the policy limits on their general liability insurance, commercial auto insurance, and employer’s liability insurance.

Janitorial bonds: Also known as employee dishonesty bonds, janitorial bonds protect your clients from employee theft. Some clients won’t hire your company unless you have this coverage.

Get insured

Since we’ve reviewed steps to protect your business, here’s a recap of our guide. 

In summary:

  • Workers’ comp, general liability, and tools and equipment insurance are the three policies that small cleaning companies should first consider.
  • Business owners should research the insurance rules according to their state and assess the coverage they need for each policy.
  • Determine what other types of coverage you need to safeguard your business in the long run.

Now that you know the basic types of insurance for your small cleaning company, you can take steps to get insured and protect yourself, your business, and your equipment.

Kayla Bisquera Avatar

By Kayla Bisquera