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Operations / Management And Training
March 2014 Contractor Success

Tailoring Liability Insurance To Your Business

Due diligence is important when shopping for janitorial service business insurance.

March 07, 2014
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As proprietor of a janitorial service company, your work is a necessity of life.

Keeping the world clean enables people to safely function at work, at rest and at play without over-exposure to a potentially hazardous environment.

As much of a necessity as it is for your customers, your janitorial service faces its own risks and exposures such as: 

  • Dealing with chemicals that can be harmful if mishandled
  • Possibly working with inexperienced employees
  • Equipment that can break down (even in the middle of a job)
  • Working during  hours when accidents are more prone to occur
  • Cleaning in facilities that may be very unsanitary to begin with.

These and many other exposures you face can be hazardous to your livelihood.

If a claim gets made against an area not covered by gilt-edged liability insurance, you could lose your business.

Liability insurance covers a lot.

Many are unaware that it covers everyone who performs work in relation to your cleaning business.

This means you, the people you hire to clean, any office staff, even your spouse or other family members doing tasks for you are all protected against any liability claim. 

What Liability Insurance Covers

Your general liability, or GL policy, is designed to protect your covered personnel if any of them or your business is ever the target of a lawsuit.

If that unfortunate event occurs, you can expect the policy to pay out for the following:

  • Any time that you or anyone else covered spends working on a case
  • Any court costs, attorney’s fees, expenses for documentation, etc.
  • A court ordered judgment
  • A settlement agreed to by both parties.

Four General Liability Coverages

There are several coverages included in your GL policy and many more you can purchase.

Three of the more common coverages are:

Bodily injury: This coverage kicks in if someone is hurt at your shop, office or garage — maybe a customer trips while trying to inspect a new piece of cleaning equipment.

All medical expenses and compensation for lost work time will be paid for.

Property damage: If someone connected with your cleaning business inadvertently damages another’s property, any loss of use as well as repairs to or replacement of the property will be taken care of. 

Products and completed operations: This is a key coverage.

It protects you in case any of your employees complete a cleaning job that turns out to be subpar or damaging in some way causing a claim to be submitted to your insurance company.

Damage to premises rented to you: If you rent or lease space for your janitorial service business and mistakenly cause any damage to the premises, this part of the policy covers it.

Other Factors To Consider

Janitorial service coverages: While there are many liability coverages that are common to all businesses, you will want to make sure that insurance protections specific to your profession as a janitorial service are available.

This is why it’s best to seek out policies insurance companies write that are tailored to your profession.

These are designed specifically for the risks and exposures you face.

Limits: Make sure you understand your policy limits.

They are quoted per incident as well as with a total of the maximum that will be paid out if several incidents occur over the policy period.

They will read like this: $100,000/$300,000 or $250,000/$500,000.

You might be surprised that the premium you pay does not increase that much as you increase your limits.

Whatever limits you choose, they should cover any potential asset loss while providing you with peace of mind.

Claims: The reason why you buy insurance in the first place is to make sure any claim you submit or that is submitted against you is handled the way you want it to be.

The first thing to decide is if you want your claims handled as either an occurrence or a claims made basis.

Here is the difference:

  • Occurrence: This protects you for any claims submitted during the policy period as well as any submitted in the future for that same policy period. This coverage is recommended for businesses but does cost more than claims made.
  • Claims made: As long as you continue to pay your premiums, any claims will be taken care of. However, if you stop paying premiums because you decide to go with another insurance company, for example, the earlier coverage stops. This means if a customer claims you damaged some furniture while cleaning on February 12, 2012 (while the policy was in force) but didn’t submit the claim until November 18, 2012, after the policy expired and you didn’t renew, you would not be covered.

Perform due diligence on these three important issues when you are shopping around for liability insurance for your janitorial service business.

 

Sam Meenasian is the executive director of USA Insurance, an insurance agency specializing in general liability policies written specifically for janitorial services and other small artisan contractors. USA Insurance offers online insurance and complete suite of insurance coverages with easy online quoting.

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