Janitorial Businesses Need General Liability, Workers Compenstation, Bond and Business Auto Insurance
by Ed Sneineh, Chicago Insurance Agent
Janitorial services establishments are exposed to some legal actions and property losses, similar to all other businesses. Their property can be destroyed as a result of fire, theft, water damage, etc. Lawsuits can also be brought against janitorial services 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 policies. Further 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. A number of home based janitorial services may pass up these coverages due to the fact that they are not large enough. Another possible form of property coverage is inland marine to cover cleaning machinery, tools, and materials while doing the job at varying service places.
2. Janitorial Liability Insurance
Legal actions against the janitorial businesses may be brought by the its customers or the others for property damages and bodily injuries that the janitorial establishment's negligent acts inflicted on them. This may include bodily injury or property damage to clients due to poor janitorial/ repair method or practice. A janitorial commercial general liability will offer cover for the business against such legal actions at the business places at the remote clients places.
Pricing and acceptability for commercial general liability is based on the size of the janitorial service (measured by total annual receipts) and degree of risk. The essence of the janitorial businesses offered from an establishment to another. Due to that, insurance carriers will want to understand more details about the business such as details about experience; customers kind and amount of business transacted with them (Aircraft, apartments, constructions make-ready, grocery store and supermarkets, convention halls, hospitals & hotels, offices, commercial and industrial facilities).
Kind of activities carried out may also shape eligibility and pricing. Under the term 'Janitorial Services' some businesses may be doing a variety of services that have different degrees of risk, therefore, different acceptability and rating. 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 obtain the right insurance a complete list of activities must be provided to the insurance company before insurance is placed. A low priced policy that does not provide the right cover is an inappropriate policy.
3. Auto Liability Insurance for Janitorial Businesses
Commercial auto coverage is required to protect the janitorial business from any auto related accident legal actions against the business. Cleaning and janitorial equipment and tools should be insured under inland marine coverage, not under auto coverage.
Rating and acceptability points include garaging site (ZIP) of the business autos, weight of autos, radius of activities, ages and driving history of drivers.
4. Janitorial Workers Compensation
General liability for janitorsis not the only key coverage. Work related injuries can cause a business a lot of annoyance and monetary losses. Workers compensation is a legally compulsory coverage to protect employers from legal actions of personnel for work related injuries. Rating for workers compensation is always speculative and is a forecast for the final number of the projected next yearly wages. At the end of the policy term a final audit of wages is performed by the insurance carrier and a final premium charge is set. Adjustment for any overcharged or undercharged premiums will take place at the end of the insurance period.
5. Importance of Umbrella For Janitors
An umbrella coverage offers extra liability insurance above the limits provided by the underlining liability contracts. The underlining insurance plans include commercial general liability, commercial auto liability, and workers compensation. Rating of umbrella is dependent on the desired limits (ie 5 million umbrella is more costly than 1 million), and the scope and nature of the underlining insurance contracts.
6. Janitorial Bonds
Certain janitorial businesses may require fidelity bonds to protect themselves from dishonest acts of their staff when they go to work on customers' locations (an employee steals property of a customer.) License/ permit bonds may be required from fewer janitorial services that are engaged in any repair services where local authority permits are needed. The premium for the bonds is based on limits of coverage and size of the business.
Insurance for Your Janitorial Services
Insurance for a 'carpet/ upholstery cleaning' janitorial services and 'accident site cleanup' janitorial establishment is not the same! The first category is a low risk class and is accepted by many standard and non standard companies, mostly at low price. The second category where hazardous chemicals could possibly be used is surely not acceptable by the vast majority, if not all, of standard insurance firms and may only be approved with fewer non-admitted insurance providers. Therefore, janitorial services that have riskier activities are advised to deal with independent insurance agents who represent more than one insurance firm. Captive consultants who deal strictly with one insurer may not be able to be as productive as other independent agent for janitorial services.