Commercial and Residential Cleaning Companies

Commercial and Residential Cleaning Companies are very similar businesses, but from an insurance perspective there is one critical difference. The difference is the driving aspect of Residential Cleaning Companies. Businesses in this industry, that work with residential clients as opposed to commercial clients, typically have employees who are traveling to 2 or more locations throughout the work day. Commercial Cleaning Companies typically have their employees work at only one business or location, like a mall. The time that the employee spends driving in-between locations is time that the business is liable for injuries that may occur. This is because the only reason the person is on their way or at the location where the injury occurred is because of the activities of the business. This risk increases the frequency of claims and the severity of those claims when they do happen.

Safety programs are one aspect that can determine the price for Workers Compensation Premium in both of these industries. If there is a well-documented safety program in place than agents can use that to negotiate deeper credits and discounts on your policy. Also, this is is an industry that tends to have a lot of small claims. Constantly bending puts the back at risk and slips and falls are common. When too many claims occur in one particular term it can cause your insurance carrier to raise your premium or drop you from coverage altogether. This can be very bad for your business. Higher premium takes money out of the business and puts it into larger insurance costs. If you are dropped from coverage by your carrier it makes it more difficult to get another carrier to quote your business and they will not be very hungry to offer discounts or credits. If you fail to secure coverage on the open market you are forced to buy coverage from the state provider also known as the pool. Depending upon your states’ policies once you are in the pool you must stay in the poll for a minimum of three years. Policies in the pool are considerably more expensive than policies on the open market.  If you have a well-documented safety program in place this your insurance agent can negotiate on your behalf to keep you out of the pool. If you have no plan in place it may show the carrier that you are a risk to great for them to take.

The type of chemicals used in your operations can determine how much risk your business has. Those businesses that offer or predominantly use environmentally safe chemicals typically have less claims and can more easily negotiate larger credits and discounts. This also comes in handy when accidents occur and you are in danger of being dropped by the carrier. again, in this case the agent can go to the carrier and show what chemicals you are using and how you are trying to limit the damage to your employees and to your business.

 

The basic package of coverages recommended for businesses in the industry include:

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

These are just the basic coverages recommended. There are other coverages that may be needed depending upon the size and scope of your business.

 

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:

    •   Code: 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 inldudes the inside and outside cleaning of windows above ground.• 9008- Janitorial Services by Contractors- 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. Cleaning services should be internal in nature and may include tasks such as dusting, mopping, vacuuming, and sanitizing. Typical workers would inlclude house cleaners, cooks, laundry workers, maids, butlers, and nannies.

 

About Mitchell Sharp

Mitchell Sharp is a Marketing Associate for the WorkersCompensationShop.com. Mitchell is a Missouri Boy and a Carolina Man who has extensive knowledge of workers compensation and cyber liability insurance. He would like to use his passion for commercial insurance, social media and digital marketing to benefit the small business community.

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