Squeaky Clean: Hired and Non Owned Auto Insurance

When might a Commercial Cleaning or Janitorial Services Company need Hired and Non Owned Auto Insurance?

Hired and Non Owned Auto Insurance is a type of Commercial Auto Insurance designed specifically for businesses that have employees who drive rented vehicles or the employees personal vehicles as a part of their daily responsibilities. If this applies to your business, you should speak with your independent insurance agent about whether or not you need this coverage.

Hired and Non Owned Auto Insurance

Hired and Non Owned Auto Insurance will reimburse your business for losses sustained by your business from damages to third parties that are the result of a car accident that is the fault of an employee. This can occur from something as simple as you sending an employee to the store to get snacks for the rest of the staff or to the bank to get some change on a busy day. When the employee is behind the wheel while on the job, the liability to third parties is the liability of the business.

It is important for you as a commercial cleaning or janitorial services business owner to understand that personal auto policies have exclusions that limit or out right negate coverage for vehicles being used for business purposes. Even if the personal auto policy of your employee does not have this exclusion, most personal auto policies are purchased at the state minimum liability limits. This limit will not cover most of the expenses of a crash when a vehicle is totaled or someone has to spend time in the hospital. When you purchase Hired and Non Owned Insurance for your business it will either replace or overlap the employees personal auto policy when an accident occurs.

It is important to remember that Hired and Non Owned Auto Insurance only covers vehicles the business does not own. If your employees are using

Examples of the need for Hired and Non Owned Auto Insurance

✓ Cleaners driving to appointments at remote locations
✓ Running business errands for boss
✓ Picking up lunch for office event
✓ Taking mail to the post office
✓ Renting a car while travelling out of state

Cleaners driving to appointments at remote locations

When you require employees to utilize their personal vehicles to drive from one location to another throughout the day the business is liable for damages that occur from an accident they cause. This is because the primary reason the employee is behind the wheel in the location they are, is because of the actions of the business. Therefore the business is liable for any damages that result.

Running business errands for boss

Once in a while a business owner has an errand they need run and they simply have more important things they need to take care of. When this occurs, it is very tempting to have an employee run the errand for the business. If the business does not have a Hired and Non Owned Auto Insurance Policy, the business is liable for any damage to third parties for damages that occur as a result of a car accident caused by the employee of the business.

Picking up lunch for an employee monthly meeting

Commercial Cleaning and Janitorial Services Companies have employees who work remotely a majority of the time. In order to keep a sense of consistency throughout the company, all staff meetings are necessary from time to time. When a business has these meetings it is common to provide lunch or some snacks for the employees. This may seem like a small activity, but if you do not have insurance specifically for this situation, the owner of the business should pick up the snacks themselves.

Taking mail to the post office

Picking up mail is an additional task that is commonly designated to mid level employees. If a business owns a company vehicle secured by a commercial auto policy, it is important to use this vehicle and not let the employee use their personal vehicle. If the employee does use their personal vehicle the business needs to secure a Hired and Non Owned Auto Insurance Policy or the business is liable for damages caused by the employee in a car accident.

Renting a car while Travelling out of state

Hired and Non Owned Auto Coverage will provide liability protection for the vehicle being rented or borrowed. This liability will not be covered if you only secure a commercial auto policy. A Hired and Non Owned Auto needs to be purchased as an addition or in place of Commercial Auto Insurance.

For most commercial cleaning and janitorial services companies who have employees who use company owned vehicles Commercial Auto Insurance is a must to properly protect the business for liability resulting from automobile accidents. If these employees use their personal vehicles for business purposes, the business needs to secure Hired and Non Owned Auto Insurance or be liable for damages to third parties that result from a car accident caused by your employee. This type of insurance can be added to most Business Owner’s Packages (BOP) or Commercial Package Policy (CPP).

July 30, 2018

What is a BOP?

How might your business benefit from a BOP?

There are many aspects a commercial cleaning or janitorial services business owner should consider when deciding to buy commercial insurance. First and foremost, a business owner should consider partnering with an independent insurance agent to save them time and money when shopping coverage. Independent agents can shop your policy around to multiple carriers for you and get multiple quotes with only one phone call. They also can give you unbiased opinion on the positives and negatives of each particular carrier. An additional aspect of purchasing commercial insurance is to secure a Business Owners Package (BOP). A BOP can make sure your business has no gaps in coverage, maximize savings, and a BOP can be customized to your specific business needs.

A BOP Prevents Gaps in Coverage

The first reason a commercial cleaning or janitorial services business owner should purchase a BOP is that it prevents gaps in coverage. What a gap in coverage is a situation where you have an accident happen within your business that is not covered by the insurance policies your business has purchased. A good example of this for a commercial cleaning or janitorial services business is if you have an employees who drives to multiple locations throughout the work day. The business has a commercial auto policy that covers the driver when they are operating a company owned vehicle, but one day an employee asks to drive their own car to work one day. The supervisor approves the employee driving in their own vehicle one day and that day the employee causes an accident on their way to work. The liability to the other driver involved in the accident is the liability of your business, not the employee. The damage to your employees vehicle is covered by their personal auto insurance policy, but the property and bodily injury damage of the other person involved in the accident is the liability of the business. Unless the business purchased an additional Hired and Non-Owned Auto Insurance Policy the damages have to be paid out of pocket. If your business did not secure this policy this would be an example of a gap in coverage. Purchasing a BOP policy with one insurance carrier is the best way to prevent a gap.

A BOP can Maximize Savings

Maximizing savings is another huge benefit of going with a BOP as opposed to purchasing each policy separately from multiple carriers. Insurance companies are much more likely to dig deep for deeper discounts and additional credits, if they know they are going to get multiple policies from your business. Most businesses need anywhere from three to seven policies depending upon the specifics of your business. If an insurance carrier knows they are going to be quoting multiple policies, they are hungrier to quote your business and more likely to offer additional savings.

A BOP can be Modified to fit your needs

Commercial Cleaning and Janitorial Services Companies come in many shapes and sizes. Some businesses have few or no employees. Other businesses have more than a hundred employees. Most businesses in this industry fall somewhere in the middle. Some businesses have employees who come to one location, clean that facility and go home from the day. Other businesses have employees who drive to two or more locations throughout the day. Some businesses, like window washers, have employees who climb high into the air to clean remote areas of a property. Other businesses do not allow their employees to even step on a ladder. All of these aspects of your business make your business unique when it comes to purchasing commercial insurance. A BOP is ideal for this industry because, depending on the size and scope of your business, a BOP can be tailored to meet your businesses unique needs.

Common Coverages Included in a BOP for Commercial Cleaning and Janitorial Services Companies

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

General Liability Insurance

General Liability is a particular type of insurance that protects a business from most liability exposures other than automobile and professional liability. One thing to keep in mind is that General Liability is not all encompassing. Consult with your insurance professional to determine what additional coverages your business may need.

Business Personal Property

Business Personal Property Insurance is the most basic form of property insurance coverage that is offered to businesses and and non-profit organizations. It is similar to Personal Property Insurance in a Homeowner’s Policy. Business Personal Property covers nearly all items of value that aren’t considered a structure, fixture, automobile, watercraft, or aircraft. For a commercial cleaning or janitorial services company, this would include items such as desks, chairs, tools, equipment, appliances, furniture, etc.

Hired and Non-Owned Auto

When a Small Business has employees who operate a vehicle as part of business operations, it is necessary to secure some form of commercial auto insurance. If the business owns and operates the vehicles being used, a standard commercial auto policy is all that is needed. If the business has employees who drive rented vehicles or their personal vehicles for business tasks, the business needs to secure additional auto insurance coverage. This coverage is called Hired and Non-Owned Auto Insurance. It can be purchased as a stand alone policy or as an addition to a commercial auto policy.

Workers Compensation Insurance

Workers Compensation Insurance is frequently referred to as the ‘Exclusive Remedy’ because it provides a mutually beneficial situation for employee and employer when injuries occur on the job. Employers gain the peace of mind that they cannot be sued for injuries that occur as a part of normal business operations and employees get medical costs and some lost wages covered in return for the promise not to sue for damages that occur naturally as a part of the job.

Employee Dishonesty

Employee Dishonesty Coverage is designed to deal with situations where employee theft of money, securities, or property occur within your business. These policies are typically written with either a per loss limit, a per employee limit, or a per position limit.

Inland Marine Coverage

Inland Marine Insurance is a form of Property Insurance that is designed specifically for property in that is frequently in transit over land. Some policies also include certain types of movable property; instruments of transportation like bridges, roads, and piers; and instruments of communication such as television and radio towers. This policy is frequently referred to as ‘Floater Coverage’ because the policy provides coverage without regard to the location of the covered property.

Common Class Codes for Commercial Cleaning and Janitorial Services Companies

SIC Business Insurance Codes:

7349: Building Cleaning and Maintenance Services

Business ISO General Liability:

96816: Janitorial Services

NAICS Liability Classifications:

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

Common Workers Compensation Class Codes:

9014: No Window Cleaning Above Ground Floor
9008: California only. This is a state special class code and applies to to similar operations indicated above.
9170: Includes window cleaning above ground level. This class is similar in most aspects to class code 9014, however, it specifically includes the inside and outside cleaning of windows above ground.

July 23, 2018

Workers Compensation Insurance for Commercial Cleaning and Janitorial Services Companies.

A dangerous accident in factory warehouse can cause an enormous workers compensation claim.

Why a Business needs Workers Compensation Insurance and how it can benefit

Workers Compensation Insurance is required by law in 48 out of 50 states. For this reason, it is usually where business owners start their insurance buying process. Each state has exclusions for some businesses depending upon the size, industry, and scope of the work the business does. Even if you are not required to carry this coverage, it is almost certainly an insurance policy your business should secure to properly protect your business. Talking with an Independent Insurance Agent can help you determine how to best insure your business from the risks it faces related to injured employees.

Workers Compensation History

The Workers Compensation System in the United States developed over the first half of the 20^th century. Wisconsin was the first state to adopt such legislation in 1911 and Mississippi was the last state to adopt a formal workers’ compensation program in 1948. Prior to workers compensation legislation, employees who were injured on the job had no formal system to compensate them for their injuries. Injured employees only form of recourse was to sue their employer. Each state has a different way of administering the Workers Compensation System within its state, but they each provide employees with medical costs and some lost wages, while also providing employers with the peace of mind that they cannot be sued for injuries that occur as a part of normal business operations. Because of this mutually beneficial system, workers compensation is frequently referred to as the ‘exclusive remedy’.

Workers Compensation as the ‘Exclusive Remedy’

The ‘Exclusive Remedy’ comes from the mutually beneficial system for helping injured employees and businesses deal with the costs associated with employees being injured on the job. When an employer purchases workers comp coverage they cannot be sued for injuries that occur as a part of normal business operations. They can be sued under some narrow circumstances where the employer was willfully negligent or intended to cause the injury. The injured employee gives up the right to sue, but recoups some lost wages (60% in most states) and medical costs that result from the injury. The idea behind the exclusive remedy is to provide some compromise between both employee and employer.

Statistics about Workers Compensation Insurance

In 2015, the last year for accurate data, workers compensation systems in the United States covered more than 135 million workers throughout the country at a cost to employers of $61.9 billion. According to the Bureau of Labor and Statistics, Commercial Cleaning and Janitorial Services Companies employ more than 2 million employees each year. Employers pay anywhere from 75 cents to $2.74 per $100 in employees’ wages. This amounts to an enormous cost to the businesses in this industry, but that cost is offset by the peace of mind business owners get from not having to suffer the burden of medical costs when employee is injured on the job.

Why your business needs Workers Compensation Insurance

Most businesses are not financially secure enough to withstand the burden of providing medical costs and lost wages to employees when they are injured on the job. Workers Compensation Premium may seem burdensome to your business. It seems even more of a burden when the policy is not used frequently, but the one time your business experiences a serious injury to an employee can cover the cost of several years if not decades of insurance premium.

Accidents happen, even to the most safe companies. If a business sticks around long enough they are going to experience a situation where they are going to have an employee injured and need to collect workers comp benefits. Unless your business is extremely financially secure, purchasing coverage is always the better financial decision.

Additional Workers Compensation Information

Monopolistic States in the Workers Compensation System

The Monopolistic States include North Dakota, Ohio, Washington, Wyoming, as well as Puerto Rico, and the U.S. Virgin Islands. What being a monopolistic state means is that the state workers’ compensation system does not recognize workers comp coverage purchased in another state. If a business operates in multiple states, and one of those states is a monopolistic state, the business much purchase additional coverage for their employees while they are doing business within the jurisdiction of that state. This comes in to play for trucking companies and businesses in states that border a monopolistic state. Partnering with a national independent insurance agency can help you maneuver the tricky landscape of operating in a monopolistic state.

States with Workers Compensation Opt-out Provsions

Two states currently offer some businesses the ability to opt-out of workers compensation system if they meet certain criteria. Those states are Oklahoma and Texas. Texas has had an opt out provision in place for several years. Oklahoma implemented a limited opt out provision in 2013. Texas requires businesses to apply for and if they meet certain criteria they can opt out of workers compensation coverage altogether. The businesses are required to meet a bare minimum amount of coverage that is similar to what is provided within the workers comp system. The way Texas has implemented the opt out provision allows large companies with strong safety records to opt out if they are financially secure. The way Oklahoma is implementing this provision is quite different and does not require companies who opt out to meet as much criteria or to provide as many benefits if they are approved to opt out. In addition to the opt out provision in Oklahoma, the system was changed in 2013 to the Oklahoma System. One of the main changes impacting the Oklahoma Workers Compensation System is that all injuries must be reported within 24 hours of the injury or they are not covered. In this system, if an employee is injures their back on Friday afternoon and reports it to their boss first thing Monday morning, they are not covered under the workers compensation system in the state of Oklahoma.

July 13, 2018August 20, 2018

Why should your Commercial Cleaning Business Partner with an Independent Insurance Agent

Independent Insurance Agent

Partnering with an Independent Insurance Agent is the best way for a Commercial Cleaning or Janitorial Services Small Business Owner to get the best possible coverage at the lowest rate possible. An Independent Insurance Agent is better because they interact with multiple insurance carriers. IN some cases as many as twenty or thirty, in an attempt to get business owners more options for their unique insurance needs. If you are a business owner who is about to look for insurance to protect your prized investment, here are four ways an Independent Insurance Agent can help your small business.

An Independent Insurance Agent Only Works for You

When you partner with an agency who is not independent (A Captive Agent) the agent has a partnership with the carrier they represent. Yes they work for you too, but the carrier is who signs their check. An independent agent works for you, the business owner. Because the independent agent is the middle man who is trying to get you the best deal possible, they are incentivized to get you the best policy for you and your needs. They are not looking out solely for what is in the best interest of the insurance carrier. An independent insurance agent, who partners with multiple carriers, has more of an incentive to keep you the business owner satisfied in order to continue to win your business in the future.

An Independent Insurance Agent gives you more choices

When you partner with an independent insurance agent your business will have the choice between multiple insurance carriers. When you partner with a captive agent you will get quotes from one or a select few carriers. If you want to shop around your policy, you have to do it yourself. With an independent agent you can get multiple quotes interacting with one agency because the agent can shop your policy around for you. They can get quotes for general liability alone compared to if it is purchased as part of a business owner’s policy. Most independent agencies partner with between 10 and 40 insurance carriers. This means more options and in most cases more comprehensive coverage. Also, because of the relationships an independent agent has established, they tend to know which carriers are actively looking to quote particular industries. They also know which carriers offer better claims service. Because of this knowledge they can not only tell you honestly which coverage is better, which price is the best value, and also which insurance company is better to work with.

An Independent Insurance Agent can be an Advocate

An independent insurance agent can give your business unbiased advice about the insurance coverage you are looking to secure. Because they do not work for only one insurance carrier, they can tell you which policy is better and why. A captive agent can only tell you what the benefits and prices are for the insurance they carrier. Like most things in life, when you purchase insurance you get what you pay for. For this reason, it is not wise to decide on insurance only on price. An independent agent can tell you which carrier has the best claims process, which company is most likely to raise your rates after a claim, which company is actively looking to quote your industry, and which industry is more likely to dig deep for discounts and credits. Also, an independent insurance agent can be your advocate mid-term. If you have a large claim, an independent agent knows the only way to keep your business is to keep your premium as low as possible. They can attempt to use your well-documented safety program to show the carrier this claim is a one time occurrence and not a sign of how your business operates. Plain and simple, an independent insurance agent is more likely to negotiate on your behalf to limit the increase in premium. If they are not successful, they have the ability to find coverage with another carrier.

An Independent Insurance Agent can save you time and money

No matter what you value during the insurance buying process, an independent agent can usually save you time and money. For many successful business owners, time is a precious commodity. If this is the case for you, it is important to express this concern with your agent at the beginning of the quoting process. They usually will only need to ask you a few questions over a period of not more than 5 minutes and get back to you within a day or two with multiple quotes. On the contrary, partnering with a captive agent means you have to call each carrier individually yourself if you want to shop around your policy.

For many business owners, their time is better spent running their business than attempting to save a few dollars on an aspect of their business they do not understand as well as an specialist does. In many cases, the amount of premium they pay is not worth an enormous amount of time trying to save. Take for instance a 5 % savings on a $1000 policy. In the end this would save the business $50. On the other end of the spectrum, a large business with a $750,000 policy may block out as much time as a half a day or even multiple days to find the best insurance policy for their business. In this instance a 5% savings would add up to $37,500, which is a years salary for one of their employees. It could be a $500 bonus for 75 employees, or even a down payment on a second home in Florida for the owner of the company. No matter what you as a business owner value, an independent agent can save you time and money by having them do the searching for you all at one stop.

July 10, 2018

What is an Experience Modification Rating and how does it impact your Commercial Cleaning or Janitorial Services Company?

Experience Modification Rating

The Experience Modification Rating of a business is the main factor an insurance carrier uses to determine what to charge a business for Workers Compensation Insurance Premium. The positive or negative aspects of a businesses rating will result in either a credit or a debit applied to what the business pays in workmans comp premium. There are many terms business owners and people in the insurance industry might use to refer to this rating. Those terms include: experience mod, experience rating, e-mod, EMR, and sometimes it is just referred to as the mod. The rating is determined by the amount of losses a business has compared to other businesses in the same industry and classification code. Because this rating is one of the few aspects of your insurance premium that the business has control over it is important to know exactly what it is and how you can improve it.

The Formula for an Experience Modification Rating

The formula that most insurance carriers in most states use to determine an experience modification rating for a business is: Total Adjusted Actual Losses ÷ Total Adjusted Expected Losses = Experience Mod.

The total adjusted actual losses is determined by adding the actual primary losses + the stabilizing value + the actual ratable excess losses. To calculate the total adjusted expected losses you would take the expected primary losses + the stabilizing value + the expected ratable excess losses.

If you do not know these amounts for your business your insurance agent or someone at the insurance carrier should be able to help you find these numbers. If they do not have access to them they should be able to put you in touch with someone who does or they should be able to help you determine them yourself.

Time Period for claims used in an Experience Modification Rating

The Experience Modification Rating is generated 60 to 90 days before the rating effective date. It uses the loss histories of a third year period not including the most recent term. That means policies that have an effective date (the date the policy is active) that is no less than 21 months prior to the rating effective date. It also means that the three years being analyzed do not include a term more than 57 months before the rating effective date. In simple terms this means the policies that begin within 21 and 57 months before the rating effective date will be used in the calculation for an experience modification rating. This time period is established because it will prevent injuries that have recently happened or even claims that are still open from being considered for this data. Because this is how the calculation is determined, it is important to limit the frequency and severity of claims. An effective safety program is extremely important to limit these claims. If your business has a year in which it has a high frequency of claims or a severe claim, it will stick with your business for several years.

Who calculates the employers Experience Modification Rating?

The experience mod factor is generated by the National Council on Compensation Insurance (NCCI). As of 2017, 35 out of 50 states use this organization to assist in determining the experience modification rating for businesses and the recommended premium for individual classification codes.

11 states have their own method or a state run department to determine this formula and to administer the Workers Compensation System. Many of the states who do not use NCCI are states with extremely large economies like California and New York. These states have determined they can do it more efficiently through a department within the state government. States that use NCCI, for the most part, have average workers comp ratings noticeably lower than states that do not partner with NCCI.

There are 4 additional states that are monopolistic states. These states include: North Dakota, Ohio, Washington, Wyoming, Puerto Rico, and the U.S. Virgin Islands. According to the International Risk Management Institute (IRMI) Monopolistic States are defined as: “Jurisdictions where an employer must obtain workers compensation insurance from a compulsory state fund or qualify as a self-insurer (as is allowed in two of the jurisdictions).” This means that monopolistic states do not recognize other states workers compensation system and require business to purchase coverage within the state if businesses want to do business legally within the state. For businesses that do businesses in multiple states and one of the states is a monopolistic state, you need to purchase coverage in the state you operate and, in most cases, the state you do business in that is a monopolistic state.

The Experience Modification Rating is a mandatory plan if the insured is qualified.

In order to qualify for an experience rating the insured business must have paid a minimum amount of premium determined by the state within the most recent 24 months of the rating period. This means the business must be in business for two years before NCCI and the insurance companies can determine what their rating is.

July 2, 2018July 2, 2018

General Liability Insurance

General Liability Insurance issues for Commercial Cleaning and Janitorial Services Companies

What is General Liability Insurance?

General Liability Insurance is the first policy most Commercial Cleaning and Janitorial Services Companies buy because it is required by law for most businesses in most states. This coverage protects businesses from the liability faced to third parties for lawsuits and other claims related to both bodily injury and property damage as well as advertising injuries. Some common claims it covers include simple slips, trips, and falls related to areas open to the general public, but it also covers obscure claims like invasion of privacy or even assault to the customers’ employees.

Does your Business Need Liability Insurance?

In today’s business environment, we are operating in a litigious society. Because of this litigious business environment that we operate in, most businesses need some form of liability insurance. Even if you think you’re business is unlikely to face a lawsuit, getting insurance is a wise investment in the unfortunate event your are sued. In most cases, insurance is rather affordable compared to the damage to your business if you choose to go without proper coverage and need it.

General Liability Insurance is also needed for most Commercial Cleaning and Janitorial Services Companies because in most states it is required by law. It is important to check with the proper governing body in the state your business operates in to make sure you are complying with the law. Because of the legal requirement in most states general liability and workers compensation insurance are the two policies most business owners start with. These are not the only two coverages most business owners need. Most businesses need additional coverages because a General Liability Policy is not all encompassing.

A General Liability Insurance Policy can be purchased separately or as a part of a business owner’s package. Purchasing the coverage as a package is a positive for two reasons. One it helps to ensure there are no gaps in coverage because all of the policies are purchased through one carrier. This can help with the time to process a claim because there is only one underwriter and one insurance carrier involved in the claim. Buying coverage as a package also incentives the the carrier to dig deeper for more credits and discounts to help you lower your overall premium.

What level of coverage do I need?

There are many things about a commercial cleaning and janitorial services companies that determine how much general liability coverage each business needs. A good example of this is, a restaurant gets sued for $300,000 in medical costs associated with a slip-and-fall injury. The policy this business has in place are $250,000. If this happens to your business, you will be responsible to cover the difference of $50,000.

What does General Liability Insurance Cost?

Most carriers have a minimum premium that starts at as little as around $350 per year. Most annual premiums for small businesses range from $750 to $2,000 depending on your industry, type of work, and coverage needs. This may sound like a significant amount, but it is significantly less than the thousands or millions you might need to spend to cover a claim.

What Factors Impact General Liability Insurance Rate?

The size of your business

The size of your business includes both the number of employees and the revenue of the business. The number of employees is taken into consideration because the larger the number of employees, the harder it is for managers to keep tight control on the actions of all employees. The revenue of the business is considered because the severity of claims rises with the amount of revenue a business takes in.

Class Code

Most states partner with the National Council on Compensation Insurance to determine recommended premium rates for businesses based upon certain industries. Currently there are more than 700 specific classification codes depending upon the industry and scope of your business. Each industry has anywhere from five and twenty classification codes depending upon the operations of your business. It is important to take adequate time to talk with your insurance agent to make sure you are classified properly. Not being placed in the proper classification code can cost your business significantly in additional premium.

Loss History

A businesses loss history is a term referring to the historical amount of claims a business has made over a period of time. Insurance carriers typically ask for five years worth of claims when they are determining whether to offer coverage and what to charge a particular business for that coverage. Now the loss history is one of a number of factors that are taken into consideration during the underwriting process, but it is one of the few aspects a business has direct control over.

Frequency vs. Severity

In the insurance industry, frequency refers simply to the number of claims a business or individual makes throughout the year. High frequency means that a large number of claims are expected to come in. On the contrast, severity refers to the amount of a claim. High severity claims are more expensive than average estimates and low severity claims tend to be less expensive on average.

Medical-Only Claims

Medical-only claims do not have a dramatic impact on the experience
modification rating of a business because most states use what is called an approved Experience Rating Adjustment (ERA). The ERA limits the amount of these types of claims in the experience modification calculation. This ERA is designed to decreases the incentive for employers to pay medical-only claims without reporting them to the carrier. The carrier wants all claims reported so they can track them to determine what industries have the most claims and what types of claims are common in those industries. The insurance carriers use this information to determine what industries they want to work with, what to charge industries, and how to help industries that have a high frequency or severity of claims history.

June 27, 2018June 28, 2018

Squeaky Clean: Commercial Cleaning Companies

Person polishing the floor indoors for a commercial cleaning company.

What exactly is a Commercial Cleaning Company?

Commercial Cleaning Companies are similar businesses to Janitorial Service Companies with one significant difference. Commercial Cleaning Companies focus more on deep cleaning that may occur once or twice a year. These deep cleaning services may include carpet cleaning, floor waxing, window cleaning, and pressure washing. Because of the deep cleaning nature of these companies, the risks the business faces are distinctly different than other cleaning companies and so are the insurance policies they need to secure. Here are three types of commercial cleaning companies, three risks those companies face, and five types of insurance all commercial cleaning companies should consider purchasing.

Types of Commercial Cleaning Companies

Carpet Cleaning

Carpet Cleaning includes the removal of stains, dirt, and allergens from carpets and rugs. The removal is done through two primary methods: Hot Water Extraction and Dry Cleaning. Carpet is the main floor covering in most commercial settings. With the advent of cubicles and workstations, fabric can now cover many businesses all the way from floor to ceiling. If this is the case, carpet is a big investment that needs to be protected. This is why companies will pay to have specialists come in to clean only their carpets.

Window Cleaning

A commercial window cleaner uses a wider variety of tools to accomplish window cleaning in a very efficient and thorough manner. Because of the difficulty of this task, especially on high rise buildings, many property management companies are willing to pay to have an outside company clean the windows of their property periodically.

Pressure Washing

Pressure washing or power washing is the use of high-pressure water spray to remove loose paint, mold, grime, dust, mud, chewing gum and dirt from surfaces. The surfaces that need to be cleaned are often buildings, vehicles and many concrete surfaces. Property needs to be cleaned and stained periodically and the previous paint or stain needs to be removed. Pressure washing can make sure this gets done and the new coat of paint or stain is there to protect your businesses property for years to come.

Risks Commercial Cleaning Companies Face

Employee Theft

Unfortunately employee theft is a realistic problem in the commercial cleaning industry. Employees are often working at a third party site and frequently they are working with little or no supervision. Insurance should be purchased to deal with this situation. Also, your business should be prepared for the day when your employee is falsely accused of theft. It is common in business for things to go missing or to be misplaced. Your business is a prime target for blame when something goes missing because it is far easier to blame a third party company than to investigate an employee you have to look in the eye on a daily basis. In many cases it is better to apologize and move on then to argue trying to prove your innocence. No matter how your business decides to deal with each situation, it is important to plan ahead for the day your business experiences employee theft.

Working at heights

Working at height is one of the largest causes of fatalities and serious injuries. Common cases of injuries include falls from ladders and through fragile surfaces. In addition, many injuries involve over-reaching, over-balancing or the failure of a fragile surface. If you have employees who work at heights, it is extremely important to supply them with the proper training and equipment to do their job safely.

Working with chemicals

Chemical hazards and toxic substances pose a wide range of health hazards. Just a few of those hazards include: irritation, sensitization, carcinogenicity, flammability, corrosion, and the likelihood of it becoming explosive. There are a number of factors that should be considered before choosing a cleaning product. The beginning of these concerns should be the ingredients, how it will be stored, whether ventilation is adequate in the storage area, and if the chemical can come in contact with am employees skin. No matter what type of commercial cleaning business you operate and what type of chemicals you decide to use, the use of chemicals should be done carefully with the health and well-being of your employees as well as clients in mind.

Insurance Commercial Cleaning Companies should Consider

General Liability Insurance

A general Liability Policy is designed to protect a business for third-party claims of bodily injury and property damage. In most states, general liability insurance is required by law for most commercial cleaning companies. For this reason, it is typically the first insurance policy a business purchases. One thing to keep in mind when securing coverage is that general liability is not all encompassing. Taking an adequate amount of time to talk with your insurance agent about all the activities of your business will help you determine what policies your business definitely needs and what policies you can do without.

Workers Compensation for Commercial Cleaning Companies

Workers Compensation Insurance is also required by law for most commercial cleaning companies in most states throughout the United States. This policy is frequently referred to as the ‘exclusive remedy’. It is called the ‘exclusive remedy’ because the system provides employers with the comfort of knowing they will not be sued for injuries that occur on the job and employees benefit from medical bills and wage replacement when they are injured on the job.

Employee Dishonesty Insurance

Crime exposure comes mainly from theft by employees of clients’ property. Background checks, supervision, monitoring and regular crew changes are all used to minimize the exposure. Employee dishonesty may also be covered under a commercial crime policy.

Umbrella Insurance for Commercial Cleaning Companies

Commercial Cleaning Companies may need an Umbrella policy if the busniess is not sure the limits of their underlying policies will fulfill the liability of claims. If you fear a claim may exceed the limits on liability coverage an umbrella policy is purchased in order to help cover your businesses liabilities in excess of the limits on the underlying policies.

Business Owners Policy (BOP)

A Business Owners Policy (BOP) combines general liability insurance with additional lines of coverage built into the policy. A BOP is often better suited for small business owners because they include targeted coverage options designed for specific types of businesses. Insurance carriers have historical claims trends on file and they know what types of accidents happen most often in any given industry. With this knowledge in mind, they know what policies commercial cleaning companies need and what types of policies the business may be able to go without. No matter what is most important to your business when purchasing insurance, it is important to partner with an insurance agency that you trust and listen to their recommendations.

Common Classification Codes for Commercial Cleaning and Janitorial Service 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
9170: Janitorial services by contractors- Includes window cleaning above ground level. This class is similar in most aspects to class code 9014, however, it specifically includes the inside and outside cleaning of windows above ground.
9008: Janitorial services by contractor- California only. This is a state special class code and applies to to similar operations indicated above.
0917: Residential cleaning services. This classification is applicable to businesses that provide residential cleaning services inside of a customer’s residence.

June 22, 2018June 28, 2018

Squeaky Clean: Janitorial Services

A lady who is the janitor of the building working for an outside Janitorial Service Company.

Common Tips about Insurance and Risk Management for Janitorial Service Companies

The differences between Janitorial Service and Commercial Cleaning Companies may be slight, but they make the risks involved in operating these businesses quite different. Janitorial Service Companies primarily deal with the daily and weekly ongoing cleaning of a facility. Commercial Cleaning Companies are regularly scheduled, but may come to a facility once or twice a year to perform specific deep cleaning. Because of these differences, the type of equipment used by the employees is drastically different and the nature of the work is different as well. Janitorial Service Companies have needs that are specific to each individual business and each individual property being cleaned. Here are five types of insurance policies every janitorial service company should have, three risks most companies face, and three additional tips for Janitorial Service Business Owners.

General Liability Insurance

General Liability will cover your businesses liability to third parties for damages involving bodily injury and property damage. A common example of a need for this policy is a customer slipping and falling in a retail store after an employee of a janitorial service company has mopped the floor. The liability of this injury is with the janitorial service company and not with the retail store. This is why it is always best to clean the facilities when the business is open to the public. In most cases it is even better to clean the facility in the evening and not right before the business opens.

Workers Compensation for Janitorial Service Companies

Workers Compensation Insurance is required by law for most janitorial service companies in most states. The workers compensation system is governed by the state governments in the United States. For this reason, the laws may be drastically different from state to state. Some states have exclusions that allow some businesses not to carry this coverage depending upon several factors. It is best to check with the governing body within the state or states you operate in to make sure you are within compliance of the workers compensation system within your state or states.

Inland Marine Insurance

Janitorial Service Companies have lots of specialized equipment. This equipment is typically used and stored at a third party site. If you have a bare bones package of commercial insurance, these pieces of equipment are typically not covered under a basic general liability policy. When the equipment is being transported away from the businesses physical location and when the equipment is being used by the employees at a third party site, the business is liable for any damages to the equipment while being used off site. If a business has equipment that your business depends on and the business does not have enough cash on hand to replace that equipment quickly, the business needs to secure an inland marine insurance policy.

Employee Dishonesty Coverage for Janitorial Service Companies

The nature of the janitorial service industry requires employees to work at a third party location with little to no supervision. No matter how trustworthy a group of employees are, the temptation to steal from a business is too great for many people. This can include employees stealing products from a retail store you are cleaning in the evenings, but it can also include your employee stealing a purse of a customer at a business your business is cleaning. In relation to this risk, it is important to remember that things go missing and when things go missing it is common to blame the cleaning crew. In addition to securing an employee dishonesty insurance policy it is important to be prepared for a day when you or your employees are accused of theft when it did not occur. The perception of the customer is equal to or more important than the truth. In some cases, a situation where your employees are accused of theft can have an enormous impact on your business in the form of Better Business Bureau, Google, and Facebook Reviews. Depending upon the amount of theft that takes place their may be negative press about your business. Depending upon the type of policy you decide to purchase, an employee dishonesty policy can help with the cost to hire a public relations agency to repair the damage to the businesses reputation. No matter the severity of the situation, it is more likely a janitorial service company should secure a employee dishonesty insurance policy.

Commercial Auto Insurance

If you have employees who operate vehicles as a part of their job, you need to secure some form of commercial auto insurance. If you own vehicles and the employees drive those vehicles when on the clock, than you can purchase just a standard commercial auto policy. If you have employees who operate their own vehicles or vehicles you rent for them to use, than you need to secure a Hired and Non-owned Auto Insurance Policy. This type of coverage will cover a business for the liability the business faces when the employees are using a vehicle while on the clock. Even if your employees have their own personal auto policy in place the damages caused by a wreck when they are on the clock are the liability of the business. Even if the employee is at fault or is breaking the law by speeding or breaking another law.

Common Risks for Janitorial Service Companies

In the Janitorial Service Industry, it is important to not only secure proper insurance coverage, but it is equally important to take the proper precautions to not have to use those policies frequently. There are many things that are unique to each individual business and each individual location your business operates, but there are several risks that all janitorial service companies face. Here are three risks you should prepare for in order to keep your business and your employees safe.

Slips, Trips, and Falls

Slips, Trips, and Falls are a risk that many different types of businesses face. The Janitorial Service Industry faces an elevated risk of slips, trips, and falls because of the exposure to the general public at many of the third party locations that are cleaned. Mopping is a huge concern, especially if your employees are cleaning the facility in the morning shortly before customers have access to the building. Training your employees to be aware of this issue and to properly prepare the facility to prevent slips, trips, and falls can have an enormous impact on the amount and severity of insurance claims within you business.

Driving Risk for Janitorial Service Companies

Not all janitorial service companies have employees who operate a vehicle as part of their job duties. Anything you can do to limit or eliminate the amount of time your employees are behind the wheel will lower the amount and severity of insurance claims and lower what you pay for insurance premium. It is important to take some additional time during the quoting process to inform your insurance agent exactly how much and what types of driving your employees do while on the clock. If you rush through this process, your agent may not secure this coverage or they may secure the wrong type of coverage for your business. This can cause a claim to not be covered.

Employee Theft

Unfortunately employee theft is a reality of the janitorial service industry. Some of the accusations are founded, but many are not. Your business is an easy target for blame when something shows up missing at a business. It is important for your business to take theft seriously, but it is equally important to be prepared for the day when your employees are falsely accused of stealing. There are insurance policies to help with the damage caused by this risk, but a small amount of prevention can help stop this from becoming a problem in the first place.

Additional Tips for Janitorial Service Business Owners

Know Your Risks in the Janitorial Service Industry

Every business has risks that are unique to that business. When you add in the fact that your business more than likely operates at multiple third party locations, there are many risks that are unique to you and your business. Having a plan in place for these issues is important.

In the Janitorial Service Industry, risks include injuries to you or your employees from slips, trips, and falls; as well as exposure to dangerous chemicals. You may face , damage to your client’s property, and accidents occurring while traveling to and from work locations. Even a minor injury can turn into costly lawsuits.

Buy Insurance Based on Value, Not on Price

When an accident occurs, no business ever wants to be under insured. In insurance, like many things in life, you get what you pay for. The cheapest coverage is rarely the best policy to have when an accident occurs. At the same time, the most expensive policies may cause you to over pay for coverage you more than likely do not need. This will tie up cash flow that may be need for other business purposes. Take some additional time to speak with your agent about what is important to you when insuring your business. The more honest you are with your agent, the more likely they are to pair your business with the ideal policy.

Classify Your Business Properly for Janitorial Service

In the Janitorial Service Industry, there are numerous classification codes depending upon the scope of your business. Making sure your business is in the right code will clear up many situations that may be come headaches either when an accident occurs or during the end of term audit.

Partner with an Independent Agent who Knows Your Business

Like many aspects of your business, it is important to work with someone that knows your industry. An independent agent is ideal because they are not tied to one or a select few carriers. An independent agent can shop around your policy and make carriers compete for your business. This is where a company like Janisure is ideal because not only our we an independent agency, but our agents specialize in insurance for Janitorial Service Companies. These agents know what issues businesses in this industry face, and how to find the best package of insurance policies to meet your businesses unique needs.

June 18, 2018June 28, 2018

Squeaky Clean: Inland Marine Insurance

Squeaky Clean | Male Workers using heavy duty cleaning equipment shows the need for Inland Marine Insurance. | Janisure

What is Inland Marine Insurance and how does it impact the cleaning industry?

According to the International Risk Management Institute (IRMI), Inland Marine Insurance Coverage is for specialized property that is frequently in transit over land, certain types of movable property, and property that is stored at a third party location. For Janitorial Services and Commercial Cleaning Companies this coverage is necessary because of the remote nature of the work and the specialized nature of the equipment employees work with. For this reason, it is important to partner with an experienced independent insurance agent and speak with them long and honestly about the equipment your business has and the value of that equipment.

Any business that uses specialized equipment, especially equipment that is transported to or stored at a third party location, needs to consider purchasing an inland marine insurance policy. Many business owners make the mistake of thinking their general liability policy is all encompassing. For most businesses, general liability and workers’ compensation insurance are required by law. Many business owners only secure these policies when they are a start-up because of funding.

Many owners of Janitorial Services and Commercial Cleaning Companies assume all the equipment being hauled on a trailer, in a van, or being stored at their clients location is covered by their general liability or commercial auto insurance policy. In most cases, that assumption is incorrect. The vehicle is covered by a commercial auto policy, but the trailer and anything carried on the trailer are not a covered peril unless you have an additional inland marine policy. The same goes for property, like an expensive vacuum, stored at the third party location. Assuming all of your equipment is covered by a basic insurance package may be a devastating mistake when your business has an accident. This is why it is important to periodically track all the equipment your business owns and talk about that equipment with your insurance agent.

As any business grows, the business more than likely acquires more equipment and may be taking on additional risk. If this is your business, it may be a good time to sit down and make a list of all the equipment your business uses on a daily basis. Once you have made this list it is important to consult with the decision makers within your organization and determine if you have the ability to replace that equipment without an insurance policy. If you can, you may not need to secure an inland marine insurance policy. If your business cannot afford to replace the equipment out of pocket and the equipment is necessary for your employees to do their job, than you may need to expand the amount of insurance coverage you purchase.

This is the type of decision that could use the help of an experienced independent insurance agent. Speaking with an independent insurance agent is best because the independent agent is not tied to one or a select few insurance carriers. An independent agent is truly a middle man working between the insurance carrier and you the business owner to get the most comprehensive coverage at a value you as a business owner can live with. A captive agent does not truly have the businesses best interests at heart because at the end of the day, the insurance carrier is the entity writing their check.

In short, the role of an independent insurance agent is to get you the business owner the type of insurance coverage that best meets you and your businesses needs. In order to get the best coverage for your unique business is to take an adequate amount of time to speak with an independent agent about all of the tasks your employee do on a daily basis and what you value in an insurance policy. If you do this, an independent agent will be able to quote a policy with several different carriers and make them compete for your business. This will ultimately get your business better coverage and lower rates on premium.

Common types of equipment covered under an inland marine insurance policy.

Vaccums
Carpet cleaning machines
Truck Mounts
Carpet extractors
Tile and grout cleaners
Rotary extractors

June 13, 2018June 26, 2018

Squeaky Clean: Return to Work Program

Squeaky Clean | Return To Work | Janisure.com

What are the benefits of having a well developed Return to Work Program?

Safety programs are an integral part of any small business. By incorporating a return to work plan into a safety program a business can make an enormous impact on employee morale and limit the losses related to employee injuries. Limiting the amount of time an injured employee is away from work can help your business in many ways. First and foremost, it will help the injured employee regain their normal routine and give them a feeling of self worth. This is crucial to getting them back to work and contributing to the organization again. Humans are creatures of habit and the longer an injured worker stays off the job, the more time they have to create new habits. When injured employees create new habits, they are less likely to return to full time employment. This is when an insurance claim can really get out of hand and have extremely negative impacts on your business. Here are several tips to help your small business prepare for and execute an effective return to work program.

Before an injury takes place

Develop a formal return to work program

Most businesses have formal safety programs. When a business develops or revises their safety program, it is a great opportunity to incorporate plans for returning injured employees to the job in the unfortunate event they are injured. People are creatures of habit and the longer an injured worker stays off the job, the longer they have to develop new habits away from their work life. This is when insurance claims can get out of hand when an injured worker stays off the job long term or completely. This can have negative impacts on your businesses experience modification rating, which is the main factor insurance carriers use to determine what to charge businesses for premium.

Identify potential temporary light-duty assignments

The more light duty tasks you have in place for injured workers, the more likely they are to return to permanent work. For your business, the most important aspect when you have an injured employee is to get the injured employee healthy and to get them back on the job in any capacity as soon as possible. This will limit the damage to your experience modification rating, which is the number one factor insurance carriers use when deciding what to charge your business for premium each year.

When an injury occurs

Start the plan immediately upon injury/illness

Most workers compensation policies require a first report of injury form to be filled out quickly. This will help the nurses and doctors provide the best medical care to your employer, it will help the insurance carrier process the claim in a timely manner, and it will help your employee get back on the job sooner and in better health.

Take care of your employee

Healthy employees are happy and productive employees. Saying you care about an employee means far less than showing them you care when the time comes to help an injured worker. Taking care of the employees will give your business the opportunity to show the injured worker and other employees that you care about their health and well-being. This can help your business with retention of all employees and it will help the injured employee to recover from their injury as fast as possible. Most importantly taking care of your employees is the right thing for any business owner to do.

Post injury

Report the injury promptly

The quicker you report the injury, the quicker your insurance carrier can process the claim and get your employee the help they need and deserve. It is important to notify both your agent and the carrier, but do not be alarmed if your agent tells you to call the carrier. Processing the claim is the job of the carrier, not the agency. Your agent should be able to put you in touch with the proper person or department at the carrier to get the process expedited. It is also important to keep the agency in the loop in case the carrier does not live up to their obligations.

Develop a process for Communication throughout the process

When an injury occurs, it is important to communicate with everyone involved what is going on. It is important for the business owner and key employees to know exactly what the workers compensation process is and what they should or should not say to employees. It is equally important to communicate with your employee, the hospital, the insurance agency, and the insurance carrier. The more communication the better when it comes to getting an injured worker the care they need and the insurance claim processed in a timely fashion.