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Submitted by: Maria Lopez Jimenez
Janitorial services establishments are exposed to certain legal actions and property losses, similar to all other businesses. Their property is the subject of destruction as a result of fire, theft, accidental breakage, etc. Legal actions can also be brought against janitorial businesses because of bodily injuries or property damages that the janitorial service business causes to other people. These risks and others can be protected against by the proper insurance coverage. Additional important insurance coverages required by janitorial business include workers compensation, commercial auto, bonds, and umbrella coverage.
1. Property Coverage for Janitorial Services
Property insurance for janitorial services may cover the building they occupy (if they own it or if they have to insure it), business personal property such as office furnishings and tools. Many home based janitorial establishments may pass up these coverages because they are not big enough. A further form of property coverage is inland marine to insure cleaning machinery, tools, and supplies while operating at varying service places.
2. Janitorial Liability Insurance
Legal actions against the janitorial services may be brought by the its customers or the others for property damages and bodily injuries that the janitorial establishment’s negligent performances caused to them. This may include bodily injury or property damage to customers because of unacceptable janitorial/ repair method or procedure. A janitorial commercial general liability will give protection for the business against such litigations at the business premises at the remote clients locations.
Pricing and eligibility for commercial liability is based on the size of the janitorial contractor (measured by gross annual receipts) and level of risk. The quality of the janitorial businesses offered from an establishment to another. Because of that, insurance companies will want to know more information about the business such as facts about expertise; clients type and volume of business done with them (Aircraft, apartments, constructions make-ready, grocery store and supermarkets, convention halls, hospitals & hotels, offices, commercial and industrial amenities).
Type of operations completed may also influence acceptability and premiums. Under the term ‘Janitorial Services’ some businesses may be doing a range of services that have different levels of risk, thus, various eligibility and costing. These procedures may or may not include light carpentry; carpet/ upholstery cleaning; construction sites cleanup, accident sites cleanup, floor stripping/ waxing; landscaping and plant/shrub service; sandblasting, restaurant hood cleaning, snow plowing, window cleaning; etc. To get the proper coverage a complete list of activities must be provided to the insurance company before coverage is placed. A low priced coverage that does not offer the proper insurance is an inappropriate contract.
3. Business Auto Insurance for Janitorial Services
Commercial auto coverage is required to protect the janitorial business from any car related accident legal actions against the business. Cleaning and janitorial equipment and tools should be covered under inland marine insurance, not under auto policy.
Rating and underwriting variables include garaging site (ZIP) of the business vehicles, weight of autos, radius of operations, ages and driving backgrounds of drivers.
4. Workers Compensation for Janitors
Commercial liability for Janitors is not the only key coverage. Work related injuries can cause a business a lot of frustration and financial losses. Workers compensation is a legally mandatory coverage to protect employers from legal actions of personnel for work related accidents. Rating for workers compensation is always speculative and is a projection for the final number of the projected next yearly salaries. At the end of the policy term a final audit of payroll is performed by the insurance provider and a final premium charge is set. Adjustment for any overcharged or undercharged premiums will take place at the end of the policy period.
5. Janitorial Services Umbrella
An umbrella coverage offers extra liability coverage above the limits given by the underlining liability insurance plans. The underlining policies include commercial general liability, commercial auto liability, and workers compensation. Pricing of umbrella is based on the desired limits (ie 4 million umbrella is more costly than 2 million), and the breadth and nature of the underlining insurance plans.
6. Janitorial Services Bonds
Certain janitorial services may require fidelity bonds to protect themselves from acts of dishonesty of their staff when they go to work on customers’ locations (a worker steals property of a client.) License/ permit bonds may be required from fewer janitorial services that are engaged in any renovation services where local authority permits are required. The premium for the bonds is based on degree of coverage and size of the janitorial services.
Insuring Your Janitorial Services
Insurance for a ‘carpet/ upholstery cleaning’ janitorial services and ‘accident site cleanup’ janitorial business is not the same! The first class is a low risk class and is accepted by many standard and non standard companies, mostly at low price. The second type where hazardous chemicals could possibly be used is surely not allowed by the vast majority, if not all, of standard insurance companies and may only be permitted with fewer non-admitted insurance firms. Due to that, janitorial services that perform riskier activities are advised to deal with independent insurance agents who represent more than one insurance company. Captive representatives who deal strictly with one insurance provider may not be able to be as productive as other independent representative for janitorial establishments.
About the Author: Author is member of Insurance Navy, a Chicago leader of business and auto insurance. You can get information about
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