Insurance for Your Toronto Cleaning Business
Your residential and commercial clients expect top-notch cleaning without incident. You’ll need to make sure that your cleaning business or janitorial business is protected from any liability claims.
Liability insurance financially protects your Toronto cleaning service if you get sued or have a court-awarded judgment against your business.
Western Financial Group, a 100% Canadian company, can help you navigate your car, home, boat, and business insurance during this period of economic uncertainty.
Wherever your small business is located in Toronto, the Greater Toronto Area (GTA), or elsewhere in Ontario, a Western Financial Group business insurance broker will get you commercial coverage that uniquely protects what you do.
Western is a trusted, national insurance brokerage that has partnered with Canada’s top insurance companies to provide commercial insurance. We’ll work with our insurance partners to find the best business coverage rates for your Toronto cleaning business.
We make the process easy by getting insurance quotes for you to choose from and giving you policy coverage options that suit your Toronto business’s specific needs.
Why do Toronto janitorial and cleaning businesses need liability insurance?
Your cleaning business needs liability insurance to protect against financial losses due to lawsuits or court-awarded settlements related to accidents, injuries, or negligence. Business liability insurance covers legal fees, court-awarded settlements, and medical expenses if a client or supplier is injured or their property is damaged.
What are the top business liability insurance coverages needed for Toronto cleaning businesses?
Commercial general liability (CGL) insurance
CGL insurance is the most important type of insurance you need for your cleaning or janitorial business in Toronto.
Accidents can happen and commercial general liability insurance protects you from claims such as third-party bodily injury and property damage related to your cleaning business activities.
Someone could be injured when they slip and fall on a wet floor or an employee could damage a customer’s property.
This type of insurance helps cover the expenses associated with these types of accidents and many others. It pays for medical and legal expenses and for replacing damaged property. Without this type of insurance, you would be responsible for paying those costs out of your own pocket.
How much CGL coverage do I need for my Toronto cleaning business?
Many commercial general liability insurance policies start at $1 million, but you will need to assess the risks that your cleaning or janitorial business will face.
It’s recommended to have at least $2 million in general liability coverage and some businesses need up to $5 million or more in coverage, depending on their size and the kind of work they do.
Surety bond: Once you accept a job from a customer, you are obligated to complete it. A surety bond is a type of business insurance that will pay your customer if you fail to complete a job.
If you go out of business, go bankrupt, or otherwise fail to finish the job, your customer can file a claim to get financial compensation with your insurer to have their costs covered, up to a maximum amount.
You may be required to have a surety bond before accepting a contract.
Fidelity bond: Clients will likely ask if your residential or commercial cleaning business is bonded.
A third-party bond, or a fidelity bond, protects your clients if an employee of your business steals money or property from one of your clients.
Cyber insurance
If you store online financial data for your Toronto cleaning business or you take credit card payments, you must protect this information and can be held liable if you don’t.
If your computer system is hacked, cybercriminals can sell the information. Without cyber insurance, you will have to pay out of your pocket for the cost of restoring your system. You may also be liable for damages to third parties whose information has been stolen and you may have to pay for notification expenses to inform customers affected by a breach.
Professional liability insurance
Professional liability insurance is also called errors and omissions insurance. It provides coverage for claims against negligence, errors, or failure to deliver service. If a client is not satisfied with the quality of cleaning services that you provide, then your business may be held liable.
Pollution liability insurance
This type of coverage covers the cost of damages to a client’s premises or to their health caused by pollution or toxic substances that your Toronto janitorial service has used, such as a chemical cleaning agent.
What other insurance do Toronto cleaning businesses need?
Commercial property insurance
Whether you rent or own your location for your Toronto janitorial business, commercial property insurance can provide financial coverage in the case of a fire that destroys or damages your business property and its contents.
Commercial property insurance also protects your place of business or office and its contents from damage or loss related to severe weather, theft, and vandalism.
You should consider adding sewer backup or overland flood coverages, which standard business insurance policies typically don’t include.
You’ll need to do an inventory of all your business property to determine how much commercial property insurance you will need for your Toronto cleaning business.
Equipment breakdown insurance
Your Toronto cleaning business may have expensive electrical and mechanical equipment required for your work.
Equipment breakdown insurance provides coverage for property damage from the sudden and accidental breakdown of insured equipment not automatically covered by a standard commercial property policy. You’ll need to have a list of the equipment and how much it’s worth.
Business interruption insurance
Business interruption insurance supports you when your cleaning business can’t operate due to a covered loss. This type of insurance can be the difference between recovering from a loss and closing permanently.
There are many losses that can force your cleaning business to shut down. Some examples include:
- Damage to your equipment from fire or vandalism
- A major reduction in revenue due to a client/supplier facing losses of their own
- A disruption in your supply chain
Business interruption insurance can help with expenses such as:
- Payroll
- Rent
- Utilities
- Property taxes
- Alarm monitoring
- Relocation of your business
Tools and equipment insurance
This type of insurance may pay to replace or repair your lost, stolen, or damaged equipment and tools that you regularly use for cleaning, such as mops and buckets, brooms and dusters, vacuums, steam cleaners, floor waxer and buffer.
Anything valued at less than $1,500 is considered a tool and anything above that amount is considered equipment.
Commercial auto insurance
If you have a business car that you use for your cleaning business, it won’t be covered by your personal car insurance policy.
You will need commercial coverage as part of your cleaning business insurance package.
You will need fleet insurance if you own five or more vehicles and use them exclusively for business purposes.
How much janitors’ insurance do I need and how much does it cost?
It will depend on the size of your cleaning business, services provided, annual revenue, number of employees, and claims history. The cornerstone of your Toronto cleaning service insurance is having enough business liability insurance to protect it financially from lawsuits and claims.
It’s unlikely that all commercial or residential cleaning services in Toronto would pay the same monthly or annually for their insurance coverage due to their size and services provided.
What do I do if I have a claim against my Toronto business?
Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
- Know your policy so that when you contact your broker you are familiar with what will be covered or not.
- Document the damage. Take photos right away and write down what happened.
- Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
- Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
- Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.
Here’s an insurance checklist:
- Do you have the best Toronto business insurance rate that suits your work?
- Do you have the right amount for your deductible and regularly review it to make sure it’s the right amount for you?
- Are you or your employees using personal vehicles for work?
5 FAQs about cleaning businesses
How to hire a cleaning service
You should ask what services are included in a cleaning package, what products are used, what their experience is, how they handle complaints, if they have insurance, and how much they charge for jobs. You should also ask for references, if any specialized services are offered, and how they accept payment.
Should a cleaning company be insured and bonded?
Yes, it’s a good business practice. If your cleaning/janitor business is bonded that means you purchased a surety bond. Surety bonds are a three-party agreement between the principal (your business), the obligee (the party that requires the bond such as a government, company, institution), and the surety company (such as an insurance brokerage). A surety bond will pay your customer if your cleaning business does not complete a job or obligated task. Insurance is a two-party agreement (between your cleaning business and your insurance provider) that provides financial protection against specific risks, such as fire, vandalism, theft, severe weather, and third-party bodily injury that could lead to lawsuits.
What is the main weakness in a cleaning company?
High staff turnover can be a weakness because cleaners often leave their positions, which results in replacement and training costs. High turnover is attributed to pay and working conditions.
What are the top skills that cleaners need?
A cleaner will need attention to detail, physical endurance, and the ability to work with cleaning products and equipment.
Does a cleaner in Canada make more than minimum wage?
In Canada, cleaners can earn more than the minimum wage, but some positions may pay minimum wage. Wages can vary depending on the type of cleaning (commercial or residential), location, experience, and employer. Entry-level positions may start at just more than $29,000 annually, while more experienced cleaners can earn about $43,000.
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