How to Start a Cleaning Business Without Insurance?

You have your business plan ready, your cleaning supplies on deck, and are excited to open your brand-new cleaning business.  You may even have a grand opening date set.  You are ready to go.  However, you may be asking yourself, “Do I really need insurance for my cleaning business?”

Not having insurance can cost you a ton of money. Accidents happen to even the most careful business owners. Without insurance, you will be liable for any accidents or mistakes that occur on the job site. They can cost thousands of dollars in damages, legal fees, and judgment costs. A judgment can ruin your personal and financial credit. Luckily, this is all preventable — general liability insurance doesn’t have to cost a lot and can even have big payoffs that result in more money and more potential clients!

Starting a business can be very expensive. When you’re just starting out, you may be looking for every possible opportunity to reduce overhead costs and save money. After all, cleaning supplies, printing marketing materials, advertising, vehicle costs and more can really add up! In the grand scheme of things, insurance may not seem like something you want to pay for right now. You may not be 100 percent sure you even need coverage. Maybe you have had to file a claim before and had a bad experience, or perhaps you just know you are an excellent cleaner and don’t cause accidents (famous last words!)

You will be taking a risk every time you go to a job site

Not having insurance might cost you everything — including potential clients

Not having insurance puts you at risk financially. Even the most careful cleaners can have an accident.  Let’s say you are working at a client’s house and you accidentally break a priceless heirloom. The customer is angry and demands that you cover the costs of repairing it. She warns you that you must replace it or she will file a lawsuit, which can be damaging to your reputation, not to mention your pocketbook. 

This is a scenario that happens all the time. No matter how careful you are, an accident is bound to happen at one point or another — whether it’s a knocked-over vase or damaged fabric from using the wrong cleaning solution. If you work long enough, there will eventually be a mistake — and you will be financially liable for it. 

If you have general liability coverage, your policy provider will pay out the cost of the claim, which means you won’t have to dip into your business finances, or even worse — your personal finances.

You could lose everything based on one mistake

Let’s say you do have an accident — a costly one, bigger than a vase. It happens to people all the time. If you don’t believe me, just google “cleaning company sued.” The stories will horrify you, and you could end up with a judgment against you. 

Wages could be garnished, you could be prevented from making large purchases, and your credit rating could plummet.  You will almost certainly fail if this happens, even if you happen to have large cash reserves.  Your dream of owning a successful cleaning business can turn into a nightmare if this happens. 

Carrying insurance makes you and your business look good

Reputation is everything in the cleaning business. When you are just starting out, and therefore don’t have a lot of customer reviews, customers are really taking a chance just by hiring you. Give them some peace of mind by showing them you are insured. Having insurance for your cleaning business shows your potential customers that you are a serious business owner. You will be seen as someone who respects your customers and their property.

Check out this article to know the things you need before opening your cleaning business.

You’ll get more cleaning contacts

Carrying insurance provides peace of mind for your customers. They know that even if something happens in their home, they should be able to get a payout from your insurance company. For clients who are wealthy or for business clients, having insurance is imperative. Many homeowners’ policies will not cover a homeowner who hires a cleaner without insurance. In the commercial industry, many company policies will only allow vendors who are insured to work on the job site for liability purposes.

Depending on where you live, insurance may be legally required

Depending on your country or state, you may be required to carry business insurance. This is especially true if you have employees. Not having insurance can possibly prevent you from becoming registered as a business. Furthermore, in some places, there may be fines levied for being uninsured.

Types of Insurance

General liability insurance

General liability insurance protects your cleaning business from lawsuits due to property damage and client injuries. This insurance protects you against any financial losses that can occur from bodily injury, libel, slander, defending lawsuits, judgments, settlement bonds, medical expenses, and property damage. Where you live and where your business is will determine minimum coverage amounts. Researching your state or country’s laws is imperative to make sure that you are in compliance and don’t face future legal troubles for being uninsured or underinsured.

Commercial Auto Insurance

When you clean houses or commercial properties, you are likely regularly driving to job sites. Typically, personal auto insurance will not cover accidents that occur when driving for work. If you use your own vehicle for business, you’ll likely need to purchase additional auto insurance coverage. Check with your current auto insurance company to determine if you need to change or increase your coverage. You can always shop around for a new provider and it may be possible to bundle your various insurances and save money.

Workers’ compensation insurance

If you are just starting out and you are a solo entrepreneur, you do not need workers’ compensation insurance. However, most states require that you carry workers’ compensation insurance after hiring your first employee. This insurance will help cover medical bills and reimburse workers for lost wages when getting hurt on the job site.

How to start a cleaning business? Visit this article to learn the steps you need to take.

How to Get Affordable Insurance for your business

Search for your state’s minimum coverage policies

Many companies have “minimum coverage policies” that cover the bare minimum without any extra frills and added on benefits.  This can result in a much cheaper monthly premium, which is perfect for those just starting out. For some states, this can be just $19 dollars, cheaper than a single cup of artisan coffee per week. Be sure to read the fine print, however, to ensure that you will be adequately covered. 

Ask around

Word-of-mouth is a terrific way to get new clients, but it is also a great way to find services for yourself. Ask any friends who own businesses who cover them, what their policy covers, and how much they pay. Another great way to find out information is to reach out to your local Chamber of Commerce and Small Business Administration. Not only will you get some great referrals, but networking can help you gain future clients!

Bundle with your current insurance and save money

Many insurance companies allow you to bundle your services and save. If you have car insurance, renters or homeowner’s insurance, and business insurance with the same company, you are more likely to save money than if you were to buy them separately. Don’t be afraid to call around or find various estimates online before making a choice.

Getting the Most out of Your Insurance

Okay, so you know that you really should have insurance when you open your business and that it can help you out in the long run, saving you time and money. It can even help you get clients! Once you have found the best policy for you and you are covered, it is recommended that you advertise your coverage. Include it on your business cards, project sites, websites, any marketing materials that you use, and your work vehicle.  

Clients would much rather work with someone insured — so make sure they know you are! Having insurance is having peace of mind. It may be annoying to pay for a monthly premium that you may never end up needing, but it is much better to do so than to have an accident and not have it.

Many businesses, both in cleaning and other industries, take time to build up cash reserves and be successful. Having insurance will protect you in case the worst happens, helping you keep your finances and your reputation intact. Insurance also lends your business instant credibility and can help you get your first clients. 

It’s an easy choice — spend a little bit now or end up paying for it later. We want you to be a successful business, and if you are successful, you will be going to a lot of job sites. It’s not a matter of if you will need insurance, but when. Start out on the right foot by making sure you are insured. Your business (and all those future clients!) will thank you for it.

Frequently Asked Questions

What kind of insurance do I need to start a cleaning business?

What kind of insurance you need will depend on your state or country, so make sure to check city, state, and federal ordinances. You will most likely need general liability insurance. You may also need workers’ compensation insurance and commercial auto insurance, depending on your situation.

What is the cheapest cleaning business insurance?

Many companies have “minimum coverage policies” that cover the bare minimum without any extra frills and added on benefits. This can result in a much cheaper monthly premium, which is perfect for those just starting out. For some states, this can be just $19 dollars, cheaper than a single cup of artisan coffee per week. Be sure to read the fine print, however, to ensure that you will be adequately covered. 

What is general liability coverage, and do I need it?

General liability insurance protects your cleaning business from lawsuits due to property damage and client injuries. This insurance protects you against any financial losses that can occur from bodily injury, libel, slander, defending lawsuits, judgments, settlement bonds, medical expenses, and property damage.  Most states and/or countries have laws regarding minimum liability coverage.

To learn more on how to start your own cleaning business, check out my startup documents here.

Please note that the contents of this blog are for informational and entertainment purposes only and should not be construed as legal advice. Any action taken based on the information provided in this blog is solely at your own risk. Additionally, all images used in this blog are generated under the CC0 license of Creative Commons, which means they are free to use for any purpose without attribution.

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