As a commercial cleaning business owner, one of the worst things that can happen is an accident while you’re at work. Indeed, no matter how careful you and your employees may be, there are times when you really can’t prevent property damage or personal injury.
This is why established commercial cleaners have public liability insurance and why you should, too, in case your business doesn’t have one yet. Should something unwanted happen and a third party makes a claim, you can rest easy knowing that you won’t go bankrupt paying compensation and legal costs.
Why Does a Commercial Cleaning Company Need Insurance?
As earlier mentioned, having public liability insurance ensures that your commercial cleaning business is protected against financial consequences should you be found accountable for property damage, illness, injury, or loss of life.
Many public liability insurance policies also provide product liability cover. This is for those who supply or deliver goods and services (which include cleaning), in case the goods or services cause damage or injury.
What you have to keep in mind is that accidents can and will happen, most of the time when you least expect it. What’s more, a cleaning business deals with chemicals and heavy-duty machines day-
to-day. With these factors in mind, it’s not an exaggeration to say that an accident while you’re conducting your job is a matter of when and not if.
With a good public liability insurance cover in place, there’s little risk of shutting down because of financial losses. Thus, you’ll have more peace of mind as you go about your daily business. Getting insured is also good for business because many clients (especially other businesses) require liability insurance as part of their contract.
How Does Insurance Work for a Commercial Cleaning Business?
A cleaning business deals with various types of risks, so it’s likely that you’re going to need more than one policy. Here are some that you should think about getting:
1) Asset Insurance
This type of insurance can cover theft and damage to items that you use in conducting your business. These include computers, tools, and even your stock of cleaning supplies.
You can choose between indemnity, which also takes into account the wear and tear of the item, and replacement, which pays the full cost so you can get a new one.
2) Commercial Property
The beauty of a cleaning business is that it’s highly mobile. You usually won’t need an office, since your typical workday is spent on the go. Nevertheless, if you own a building (e.g., for administrative purposes and keeping stocks), commercial property insurance is necessary.
This type of insurance covers damage to structures, such as from fires and floods. Some insurers won’t cover earthquake damage unless you provide certain information, so be sure to inquire about them.
Also, do note that you still need commercial property insurance even if you’re running your business from home. This is because household insurance usually doesn’t cover workspace and business assets.
You may also purchase portable equipment or general property insurance cover for items of lower value that you are nevertheless using for business. These include electronic items, cleaning equipment, and the like. Make sure to ask your insurer about what kinds of accidents or events are covered.
3) Business Interruption
This type of insurance provides cover for losses that result from occasions when you can’t conduct business. For example, if a natural disaster occurs and you’re forced to stop work, business interruption insurance can help pay your employees’ wages.
4) Commercial Vehicle
You need comprehensive third-party insurance for your cleaning vehicle. This should be on top of private motor insurance since this doesn’t provide coverage when the vehicle is used for business purposes.
When Should You Buy Public Liability Insurance?
Ideally, you should have public liability insurance as soon as you start your business. It might seem cost-prohibitive for small businesses, but you can actually get by with minimum cover. Then, as your business grows, you can work towards getting more coverage.
It’s also ideal to get insured right from the outset if you want to appeal to more customers. Again, most businesses require their contractors to have public liability insurance before signing contracts.
In the same vein, if you’re offering B2B services, make sure that the other party has public liability insurance as well. This way, you’re both covered in case of accidents.
Who Needs to Be Covered by Your Policy?
In the simplest terms, everyone in your business needs to be covered by your policy. Even if you’re a sole proprietor, you still need public liability insurance in case you cause property damage or physical injury while you’re working at a client’s office or a public space.
In fact, it can even be argued that sole traders need insurance more than mid-sized or large enterprises. This is because you’re at a greater risk of losing your assets if you’re held financially and legally responsible for work-related accidents
If you’re running a small business, there’s also something called key person insurance. This can cover the cost of losing someone who’s integral to running the business, such as the CEO.
What Happens If There Is an Accident and You Don’t Have Coverage?
In New Zealand, the Accident Compensation Corporation (ACC) provides compulsory insurance cover for personal injury. This applies to everyone: citizens, residents, and even visitors. If you get injured by an accident while in the country, the ACC can cover a certain percentage of your medical bill.
Some people argue that the ACC cover is enough, particularly for sole entrepreneurs. However, there’s a lot that the organisation doesn’t cover. For example, they won’t cover legal defence costs. In short, you can still end up in dire financial straits even with the help of ACC.
In summary, insurance is a must if you want to secure the future of your business. With a good policy, you can focus on doing your job, expanding your network, and building success.