Tuesday's Ask the Experts: Insurance
January 13, 2009
Tuesday''s Ask the Experts question from a cleaning professional on the International Custodial Advisors Network (ICAN) "Ask the Experts" page: What is the cost for a surety bond and general liability insurance? Where do I go to get it? Is $500,000 a lot for a surety bond for janitorial services? General liability is $1 million. Is that reasonable, and if the building already has insurance and I use their equipment what is this for?
A surety bond is basically a purchased guarantee that if you do not perform the agreed upon services for this company, they will be paid the cost of the non-performance, perhaps by being reimbursed for hiring another to do the work you didn’t do. Personally, I have never seen this required of a small cleaning contractor, since the money at stake is seldom a six-figure amount, even for an annual contract on a medium sized building. This sort of bond makes sense for construction and large, time-constrained projects, but not for what you are doing.
The general liability covers damages for which you may be held responsible. Many of us carry a million or more in coverage due to the tendency of people to sue everyone in sight for their personal irresponsibility. Slip and fall incidents are the big concern. They can be expensive, even to defend against. A computer monitor knocked off a desk by an enthusiastic vacuum operator is of minor concern. Pocket change these days.
I would certainly have liability, since the building’s insurance may or may not cover your operations, and that isn’t the only place where you work and are at risk. However, I consider the surety bond a waste of money due to the nature of our work. Are they going to file against the bond for finding a few ounces of... — Lynn E. Krafft, ICAN/ATEX Associate Editor