How to Start a Cleaning Business: The Risks an Insurance Agent Would Cover First
Supplies and a few clients get a cleaning business started. One broken vase, one missing ring or one wet floor can end it. Here's what I'd look at as an insurance agent before you take your first job.
If you want to start a cleaning business, get it insured before your first job, not after your first problem. You're working inside other people's homes and offices, around their things, on floors you just made wet. Three things can go wrong in a hurry: you break something, something goes missing, or somebody falls. Plan for all three on day one.
I'll be straight with you: I run an insurance agency, and I haven't written a policy for a cleaning business yet. But I look at risk for a living, and here's what I'd be paying attention to if a cleaner called me tomorrow.
The first thing I'd ask you
How long have you been in business? That's my first question for anyone. A brand-new cleaner and one with three years of clean history are two different conversations. If you're new, that's fine. Everybody starts at zero. Just know that's where the conversation starts.
Broken items: the claim you'll cause without meaning to
If I had to pick the risk that matters most, it's broken items. It's easy to do, and you don't have to be careless or malicious to do it. You move a lamp to dust behind it and it tips. You wipe a shelf and knock off a frame. In somebody else's house, everything you touch belongs to somebody who will want it replaced.
That's what general liability insurance is for. The SBA describes it as coverage that "protects against financial loss as the result of bodily injury, property damage," plus the cost of defending a lawsuit. If you're working in Florida, my agency writes general liability for small businesses.
When something goes missing, you'll be the first one blamed
Jewelry, cash, a watch, a prescription bottle. When something disappears from a home, the cleaner is the first person anyone thinks of, whether you took it or not. You need two things here.
- A crime policy. Ask your agent about crime coverage built for businesses that work inside clients' homes, especially once you have people working for you.
- Proof of what happened. I'd think about body-worn cameras, like police officers wear. It's the same reason stores put cameras in their parking lots: to catch the people who say they slipped and fell when they didn't. Video protects you from a false accusation better than anything you can say after the fact.
Cameras cost money. I understand that. But if you want to do this right and not have these problems, you have to make a choice.
Wet floors and slip-and-falls
Your job leaves wet floors behind. If the homeowner, a kid or an office worker walks across one and goes down, that's a bodily injury claim, and those get expensive. Put out a sign, tell people where you've mopped, and carry the liability coverage to back it up.
Your car is probably not insured for this
Most new cleaners drive client to client in their own car with a trunk full of supplies, on a personal auto policy that isn't rated for business use. That's an obvious mistake. If you have an accident on the way to a job, you don't want to find out then that you never told your insurer you use the car for work. Tell your agent, and ask whether you need commercial auto coverage.
Offer your certificate of insurance before anyone asks
Offices and property managers will usually ask for a certificate of insurance. I'd expect most to ask for $1 million per occurrence and $2 million aggregate. Homeowners almost never ask, and that's a real problem in home services. A homeowner who lets an uninsured cleaner in is taking a huge risk without knowing it.
So flip it around. Offer your certificate up front, before anyone asks. It tells every client you run your business on the up and up, not fly by night. And if you're a homeowner reading this: if a cleaner gets angry when you ask for proof of insurance, that's somebody you don't want to hire.
What to buy first if money is tight
People ask me what they can afford to buy first. That's the wrong question. The question is whether you can afford not to have it. One broken heirloom or one fall can cost more than a year of premiums, and the SBA's own rule of thumb is to insure against the things you couldn't pay for on your own. Get insured before you take the first job.
I talk about starting a business every week on the live show. If you're starting one now, join free and I'll let you know when I'm live.