Squeaky Clean: Carpet Cleaning

The Commercial Cleaning Industry includes any type of service that is advanced, deep-cleaning that is commonly done on a semi-regular basis. These types of services may include power washing, window washing, tile and grout cleaning, furniture and upholstery cleaning, and even carpet cleaning. Carpet Cleaning is a type of business that has risks that are unique to the specific work each business does. There are many types of services the business may offer and you need an insurance agency that is prepared to service the unique risk management needs of this niche industry.

Running your own carpet cleaning business can be both rewarding and stressful at the same time. Owning your own business allows you to work on your own time and hold the keys to your success in your own hands. With that freedom comes a tremendous amount of risk. Risk that falls on the shoulders of the business owner alone. Because of these risks, your business needs an insurance agency who specialized in carpet cleaning companies. An insurance agency that understands the your business, because offering business insurance to carpet cleaning companies is more complicated than most small businesses where a one size fits all approach may work. If your insurance agent does not ask the specific questions it could leave your business with dangerous insurance gaps.

Because of the risk of gaps in insurance policies, it is important to take an adequate amount of time to speak with your insurance agent about the day to day operations of your business. It is equally important to let them know exactly what your employees do as well as what they do not partake in on a daily basis. This will help to make sure your agent has your business classified properly with the insurance carrier. Properly classifying your business can save a lot of headaches when it is time for your business to undergo an end-of-term audit. If your business is not properly classified, it can cause you to under pay throughout the year because you were placed in a less risky classification code. This can cause your business to have an unexpected cost at the end of the policy term. Now one way to prevent this from happening is by going with the Pay as You Go Option for Workers Compensation insurance. Even if you decide not to go with the Pay as You Go Option, and your business has over paid throughout the year, you get a refund on premium previously paid. This means your business has tied up cash throughout the year in unnecessary over payment of your insurance premium. Taking time to talk extensively with your insurance agent can help prevent gaps in coverage as well as under or overpaying premium because of misclassification.

Common Class Codes for Carpet Cleaning Companies

2581 Carpet, Rug, or Upholstery Cleaning—Shop or Outside & Drivers (Texas)
2585 Carpet, Rug, or Upholstery Cleaning—Shop or Outside & Drivers (National)
2592 Carpet, Rug, or Upholstery Cleaning—Shop or Outside & Drivers (Oregon)

May 29, 2018June 28, 2018

Janitorial Services Vs. Commercial Cleaning Companies

What are the differences between Janitorial Services Vs. Commercial Cleaning Companies?

When comparing a Janitorial Services Vs. Commercial Cleaning Companies, it is important to define what exactly each are. While they are similar businesses, from a risk management perspective they do have some distinct differences. This is why they are classified differently for insurance purposes and why a business owner in one or both of these industries should think about the unique risks each type of business faces. Here is a description of what exactly these businesses are and how a business owner should prepare their insurance and risk management plans for ultimate success.

What is a Janitorial Services Business?

A janitorial services business provides basic cleaning maintenance to the interior of premises for commercial and industrial clients. These services are typically provided on a daily, weekly, or biweekly basis. Activities include in this type of service include taking out the trash, sanitizing the bathrooms, kitchens, and break rooms so the business is ready to receive employees and customers. The contract may also call for regular vacuuming and dusting of furniture or bookshelves. Commonly it is an exclusion for janitorial services companies to come in contact with computers or other electronic devices. If your business does interact with electronics, it is important to tell your insurance agent. Electronics are frequently exclude from many insurance packages in this industry.

What is a Commercial Cleaning Company?

Commercial cleaning service companies handle more in-depth and heavier cleaning tasks. These services occur on a regular basis throughout the year, but not on a daily or weekly basis. These types of services likely include carpet cleaning, power washing, window washing, tile and grout cleaning or even furniture and upholstery cleaning.

How are Janitorial Services Vs. Commercial Cleaning Companies different?

The main difference between Janitorial Services Vs. Commercial Cleaning Companies is the frequency of the service and the detail with which each service entails. Janitorial services deals more with the regular maintenance and cleanliness of the facility where commercial cleaning deals more with periodical deep cleaning of a facility.

What do Janitorial Services Vs. Commercial Cleaning Companies need to be concerned about from a risk management stand point?

Janitorial Services Vs. Commercial Cleaning Companies both face risks related to the work the employees do on a daily basis. Three areas both janitorial services and commercial cleaning companies face risk are related to employee driving exposure, common general liability claims, and employee dishonesty.

Employee driving exposure results when a business has more than one facility that employees travel to throughout the work day. The time employees spend travelling from job to job is time the business is responsible for the liability to third parties for damage that occurs in traffic accidents.

Common general liability claims results most often from slips, trips, and falls that occur as a result of the cleaning activity taking place. Cleaning after hours eliminates many of these risks, but if your employees do clean facilities when they are open to the public, it is important to train your employees well about how to warn customers of a tripping hazards. It is always more important to prevent a trip from happening in the first place than to try to limit the damage after an incident has taken place.

Employee dishonesty is the final common risk Janitorial Services Vs. Commercial Cleaning Companies face. The employees frequently work at a third party facility when none or few of the businesses employees are present. Often times there are few or only one of the cleaning companies employees present. Unfortunately, this lack of supervision is too much of a tempting situation for many employees. Preparing for the day when your employee steals from a client will go a long way towards the success of your business when this situation does occur. Securing a comprehensive insurance package will help your business with the costs of such a situation. It is equally important to be prepared for the day when your employees are innocent and being accused of theft. When something shows up missing, the cleaning crew who is here by themselves after hours are an easy target for blame. Establishing a deep relationship with both your employees and your clients in order to deal with these situations in order to get the best outcome for all parties involved.

What types of Insurance do Janitorial Services Vs. Commercial Cleaning Companies Businesses need?

The risks faced by Janitorial Services Vs. Commercial Cleaning Companies are all unique to each and every business, but there are certain insurance policies that all businesses in this industry should consider.

✓ General Liability Insurance
✓ Business Personal Property
✓ Hired and Non-Owned Auto
✓ Workers Compensation Insurance
✓ Commercial Crime/Employee Dishonesty
✓ Inland Marine Coverage

Partnering with an experienced independent insurance agent is a great way to limit the time it takes to find insurance coverage and insures that your agent is getting you the best value for your insurance coverage. Independent insurance agents are not tied to one carrier, this allows them to acquire a quote from multiple carriers and make those carriers compete for your business. If executed properly, an independent agent should be able to get your business better coverage at the most competitive rates around. Also, they can give you insight into the positives and negatives of each carrier that a captive agent cannot tell you about their carrier.

Common Classification codes for Janitorial Services Vs. Commercial Cleaning Companies

SIC Business Insurance Codes:

7349: Building Cleaning and Maintenance Services

NAICS Liability Classifications:

561720: Janitorial Services
561210: Facilities Support Services
561790: Other Services to Building and Dwellings

Business ISO General Liability:

96816: Janitorial Services

Common Workers Compensation Class Codes:

9014: Janitorial Services by Contractors—No Window Cleaning Above Ground Floor

May 25, 2018June 28, 2018

How can Pay as You Go Benefit my Business?

What is Pay as You Go Workers Compensation and why might a Commercial Cleaning Company want to use it.

What is Pay as You Go Workers Compensation?

Pay as You Go Workers Compensation Insurance is an alternative payment option that allows commercial cleaning and janitorial services companies to pay their insurance premium monthly instead of in a lump-sum payment. This alternative payment option allows seasonal and cash-strapped businesses to get coverage in place at a much lower cost and to increase the accuracy of their payments by allowing the business to pay workers comp premium based on the actual payroll from the previous month.

How is Pay as You Go Workers Compensation Different?

A traditional workers compensation program requires a business to pay a portion of the premium up front just to get the policy in place. This amount is often 25% and some times as much as 33%. Depending upon the revenue of your business, this may be a substantial amount your business is required to pay just to get coverage in place. After making this large payment, the rest of the premium is paid in 9 monthly payments over the course of the last 9 months of the term. A Traditional Workers Compensation Insurance Policy determines your monthly payment based off of the estimated payroll from the previous year or an average of monthly payroll over the past few years. There are many factors that may make the man hours of your business considerably different from year to year. Pay as You Go Workers Compensation Insurance allows a business to prevent get a policy in place at a lower initial cost and increases the accuracy of the payment each month.

How can a Janitorial Services Company benefit from Pay as You Go?

Commercial Cleaning and Janitorial Services Companies benefit from a pay as you go policy in three main ways: less up front costs, more accurate monthly payments, and less risk of being audited mid-term.

Having a lower up front cost allows start-ups, cash-strapped, and seasonal cleaning companies the ability to get coverage in place and pay their premium throughout the year as they gain more positive cash-flow. Their may be a number of reasons why cash is tight within a business and pay as you go is a great way for businesses to get legally required workers comp coverage in place at a lower price then a traditional workers comp policy.

Because a pay as you go workers comp policy allows your business to partner with a payroll company to accurately pay your premium each month, there is less risk for a mid-term audit. With a traditional workers compensation policy the monthly payment is based upon an estimate of payroll from the previous year or the previous few years. This results in a business either over or under paying for premium throughout the year. If there is an underpayment, the business will owe the extra premium at the end of the term. If it appears that there is a significant underpayment in place, the insurance carrier may require a mid-term audit to adjust the payment. A mid-term audit takes your employees away from their daily routine to help the inspectors adjust the premium payment. This is time that is spent by your employees on activities that are not making the business profitable. The more accurate the premium payment is through a pay as you go policy, the less likely your business is to experience a costly mid-term audit.

May 23, 2018June 28, 2018

Keep Your Insurance Policies Squeaky Clean

5 Insurance Coverages Small Business Owner’s may not realize they need for their Commercial Cleaning or Janitorial Services Company

Janitorial Services and Commercial Cleaning Companies have unique risks no other businesses face. Because of these unique risks, businesses within this industry need unique insurance to properly protect the business. There are certain policies that all businesses should have, but there are also several policies that many commercial cleaning and janitorial service companies should strongly consider. Here are five additional policies business owners and managers should strongly consider securing.

Business Income
Cyber Insurance
EPLI
Umbrella
BOP

Business Income with Extra Expense

Business Income with Extra Expense Coverage is also commonly referred to as Business Interruption Insurance. It is a type of commercial property insurance covering loss of income suffered by a business when damage to its premises causes a slowdown or suspension of its operations. A common time when this policy is needed is when a fire takes place. The coverage applies to loss suffered during the time required to repair or replace the damaged property. It may also be extended to apply to loss suffered after completion of repairs for a specified number of days.

Cyber

Cyber liability is divided into two categories of coverage: first-party and third-party. The first -party coverage is commonly referred to as Data Breach Insurance. This policy deals with the immediate response cost related to a data breach. These cost may include notifying all customers who are affected by the breach, hiring a forensic team to find out how the breach occurred and fix it, and providing credit monitoring services for those impacted for up to one year.

EPLI

EPLI stands for Employment Practices Liability Insurance. EPLI is a form of professional liability insurance designed to specifically address the unique risks associated with hiring, employing, and terminating employees. The average out-of-court settlement for an Employment Practices Liability Insurance claim is about $40,000. If the case actually goes to trial, the average award amount is $218,000, and nearly 10% of these cases can result in an award of more than $1,000,000. Employees file over 90,000 charges per year with the U.S. Equal Employment Opportunity Commission. EPLI Coverage can protect your business if you become the target of one of these cases.

Umbrella

An Umbrella Insurance Policy is designed to lift the limits of all existing policies a business has in place. When a claim occurs, the existing policy will cover the business up to the limits of the policy if the claim is a covered loss. In some instances, the claim will be more than the limits of the policy. In this case, if the business has an Umbrella Policy in place, the Umbrella Policy will cover the additional costs up to the limits of the Umbrella Policy. The key to this policy kicking in is that the underlying claim must be a covered loss. If the underlying loss is the result of a tornado and the business does not have a specific Tornado Policy in place than the Umbrella Policy will not kick in.

BOP

A BOP stands for a Business Owner’s Policy or a Business Owner’s Package. These packages of coverages are designed by insurance carriers for businesses in particular industries. Because of historical claims data, the insurance carriers know what claims are common within the particular industry and through this knowledge they know which policies to recommend to business that operate in a given field.

May 22, 2018June 28, 2018

Insurance Policies for Janitorial Services Companies

5 Types of Insurance every Commercial Cleaning or Janitorial Services Company Should Have.

Janitorial services companies provide basic cleaning services to the interior of premises for commercial and industrial clients. Some operations provide exclusive services for one client only, while others have a number of regular clients or offer services to the public on an “as needed” basis. Typical services include the removal of trash from all areas of the premises, cleaning restrooms, dusting and regular vacuuming, mopping or sweeping of floors. Other services may include cleaning of eating areas, carpet cleaning, floor polishing, cleaning of drapery and window washing. With all of services that are provided come unique risks each business faces. Here are five insurance policies that all businesses in this industry need.

General Liability

General Liability Insurance is a type of insurance coverage designed to protect a business from basic liabilities the business faces to third parties injured by the actions of a business. Third parties include customers, vendors, and random people who are damaged because of the actions of a business or its employees.

Workers Compensation

Workers Compensation Insurance is like General Liability Insurance in that it deals with the liability a business may face related to injuries, but it deals with injuries to the businesses employees and not third parties. Because the workers compensation system provides benefits to both injured employees and employers, it is frequently referred to as the ‘exclusive remedy’. The benefit an employee receives as a part of the exclusive remedy is that medical expenses and some lost wages are paid while they are hurt and not able to work. The employer benefits from the fact they cannot be sued for injuries that occur on the job, but are a result of normal operate procedures.

Inland Marine

Commercial Cleaning Companies have a lot of equipment the employees use on a daily basis. Much of this equipment can be extremely expensive and is not commonly used by businesses outside of the cleaning industry. This equipment is essential to the work the business does. It is also fairly expensive. An inland marine insurance policy can help your business protect the specialized equipment you use when it is damaged and you are not able to use it.

Commercial Crime (Employee Dishonesty)

Commercial Crime (Employee Dishonesty) Insurance protects a business against dishonest and criminal actions over your employees. These acts are not covered under general liability, professional liability, or property insurance. Damage that is included under this type of policy include damage to business property, employee fraud, and theft of your property. Most policies also cover theft of your client’s property.

Hired and Non-Owned Auto

Many janitorial services companies have employees who have to drive to two or more locations throughout the work day. The time that these employees spend behind the wheel is time that the business is liable for accidents that occur while the employee is on company time. A Hired and Non-owned Auto policy will cover your business for the liability it faces for damages that occur during car accidents that are the fault of your employee.

Common Classification Codes used by Commercial Cleaning and Janitorial Services Companies.

SIC Business Insurance Codes:

7349: Building Cleaning and Maintenance Services

NAICS Liability Classifications:

561720: Janitorial Services
561210: Facilities Support Services
561790: Other Services to Building and Dwellings

Business ISO General Liability:

96816: Janitorial Services

Common Workers Compensation Class Codes:

9014: Janitorial Services by Contractors—No Window Cleaning Above Ground Floor