Consumption and Real Estate
Do I need business insurance for my small cleaning jobs?
Question : Do I need business insurance for my small cleaning jobs?
I’m looking to start a VERY small residential cleaning business. I would be the sole worker, just looking to make a little extra money. I’m not planning to hire any employees and I’m hoping for just maybe 2 or 3 houses a week. Do I need a business license as well as Property and Casualty insurance for something this small? Can anybody offer any advice? Bonding, insuring and licensing can be costly and if I can put this off until my business grows, that would be excellent. ANY advice is extremely helpful 
small business property insurance
Best answer:
Answer by Judy
I was in an apartment where a cleaning lady dropped some bleach on the carpet by mistake.
The cleaning lady had insurance and the carpet for the entire apartment was replaced.
^^^ Just a thought.
Insurance might be a good idea.
/
-
-
#2 written by Margarita D 1 year ago
In terms of whether you need a business license that would be dependent on where your business will be located so I cannot give you information about that. In the principle jurisdiction where I am located most businesses need a specific license geared toward their business or if they don’t fall into any of those categories they are required to obtain a basic business license and to register with the department of taxation.
For insurance purposes the cost will range from $ 600 to $ 800 per year for a $ 500,000 occurrence/ $ 1,000,000 aggregate limit of Commercial General Liability and even though you are new in business can usually be set up in an installment plan by giving 25% down and then up to 8 payments — with a small fee or finance charge. In terms of the bond, a janitorial services bond for $ 5,000 with less than 5 employees will generally cost about $ 100 for the year. The bond protects the homeowner in case you or someone you employ were to steal something from their home — in your case it would be primarily a marketing tool to put prospective clients at ease. You might also want to consider letting your automobile insurance carrier know that you will be using the vehicle to transport yourself and your cleaning paraphenelia to these homes as failure to do so could result in a subsequent claim being denied. As long as you do not hire any employees and your auto carrier accepts the use of the vehicle, the CGL and the bond should be all you need from an insurance standpoint. The only exception would be if you invest a great deal in equipment or supplies and want to have those covered for theft and or other damages.
I suggest that you find a good local insurance agent that specializes in commercial insurance for further assistance. You can go to the website for the Independent Insurance Agents & Brokers of America to assist you in this search by entering your city or town, state and zip code only you will be able to pull up all local agents, see their websites and specialties and the companies they represent, and obtain their contact information so that you can speak with two or three and choose the one you feel most comfortable with. Note that your information will not be stored or used in any other matter except to conduct a search for an agent serving your community — the website is: http://www.iiaba.net/agentlocator/findagent.aspx.
**Ultimately it is your choice whether to go without insurance or bonding — however, note that if you decide against insurance and you end up with a claim you can subject yourself to ruined credit, loss of a client, loss of your reputation and still jeopardize your assets — home, bank account, future income, etc. No one is judgment proof even bankruptcy will not offer you full protection and can ruin your credit for years to come.
I hope this information helps. Good Luck on your new business.
- Comment Feed for this Post
There are two ways to look at this:
from an agent’s point of view – of course you need insurance if somoene tries to sue you, but then it’s too late to buy it
and from a business point of view:
The cost of insurance and bonding such a small business, is going to vastly outweigh your income produced by this business.
Most small cleaning businesses I’ve known about, work uninsured. Bonding is an honesty thing, and you’d have to pay back the bonding company, ANYWAY.
Most small housecleaning businesses run under the table – no taxes, no insurance. Some are over the table, still uninsured, and the proprietor is just careful to keep all assets out of their name (making them effectively judgement proof – can’t get blood from a stone!). Still others, run the business as an LLC, to protect themselves (but technically this makes them subject to workers comp laws).
Bottom line – it’s a risk to go without insurance, and only YOU can make the decision if it’s worthwhile or not.