How Can I Make My Insurance Work For Me?

“I’ve been in the cleaning business for years and have never carried liability insurance. Why should I spend the money to buy coverage when I’ve never had claim problems?”

Many cleaning services express similar sentiments, especially in these hard economic times. However, taking that viewpoint may prove to be more costly than the premium to buy liability insurance. There are two major reasons it may prove more costly not to carry liability insurance than to carry it.

First, the jobs that have the highest profit potential will require evidence of insurance. If you’re not carrying liability insurance, the high profit jobs will go to someone else who is. Even where someone doesn’t require a certificate of liability insurance, the janitor that does carry the coverage is usually given preference over another janitor, when pricing is similar, who does not carry the coverage. However, to get that advantage you’ll need to let your customers and potential customers know you carry liability insurance. For your customers the most effective way to do that is to have your insurer send them a certificate of insurance. For your potential customers, just carry a copy of the declarations page of your policy and let them know that if they give you the job you’ll have your insurer send them a certificate of liability insurance.

A second major reason it may be more costly not to carry liability insurance is the potential for a claim. Someone slips and falls on a floor you mopped, trips over your cords, or leaves the water running in a sink when you leave the premises you have the potential for a very large claim. If a serious claim occurs and you don’t have liability insurance, you may end up losing your home and any other assets you have. If you don’t have liability insurance you’ll almost certainly lose your customer. Then think of how the uncovered claim is going to affect whether others want to do business with you. Especially if you live in a small community, word may get around about the claim and the fact you weren’t covered and that can interfere with your getting additional jobs.

“But I’m very careful, none of that would happen to me.”

We all like to believe that we’ve done the right thing when it comes to handling our business. However, we aren’t in control of everything. We had a client that cleans vacant apartments. The water to the apartment was turned off. Our insured cleaned the sinks, floors, etc. to get it ready for the next tenant though they had to bring the water they needed in with hoses from an outside faucet. When the apartment was ready to rent the water to the apartment was turned back on. One of the faucets in the apartment was in the on position and since our insured was the last one in the apartment a claim was made against him when the water overflowed and damaged that apartment and the one below it. The damage was more than $50,000. He was sure glad he had liability insurance.