Wednesday's Ask the Experts: Insurance
April 7, 2010
Wednesday''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.