Chapter 2: Understanding Cleaning and Janitorial Insurance Policies
Part 2: Small Business Insurance Basics
Property Insurance is invaluable for your cleaning business, especially if you've invested in expensive commercial cleaning equipment. Say you store your industrial vacuums, floor buffers, and window washing gear with your other cleaning supplies. Because cleaning solvents may contain flammable chemicals, they could cause a fire (especially if they are not properly stored).
When that happens, you could easily lose all your cleaning supplies in one fell swoop. At the very least, you'd be pressed to replace your equipment quickly. At worst, you could lose business while you scramble to make replacements.
That's where Property Insurance can help. This coverage protects your business from the financial side of property loss caused by…
- Power surges or outages.
Though most policies don't cover damage because of hurricanes, flooding, or earthquakes, you can talk to your agent about additional coverage options if you live in an area prone to these events.
Property Insurance helps your business get on its feet after an unexpected disaster. Consider purchasing Property coverage if you…
- Run your cleaning business from your home. Even if you have a Homeowner's Insurance policy, your coverage probably doesn't include compensation for commercial property. Some policies may not cover the space you use to store that property, either. Though you can add a rider to your Homeowner's Insurance, you receive more coverage and higher payouts with a separate commercial policy. Learn more about the limitations of your Homeowner's Insurance with our infographic, "Is Your Home-Based Business Covered?"
- Own commercial real estate. If you've invested in commercial real estate, Property Insurance is an essential safety net. With adequate coverage, you have the means to repair your property when catastrophes take their toll. You can choose a policy that protects the building, its contents, or both.
- Rent commercial space. The terms of your lease should clearly state which party is responsible for procuring Property Insurance — you or your landlord. Most landlords carry their own policies for the rented space, but don't bank on that. Check your lease or ask. Though building coverage might not be an issue, you'll need to carry your own insurance to protect the property inside.
- Own expensive or hard-to-replace equipment. Even if you don't have industrial equipment, the cost of gear and supplies can add up, especially if your cleaning business is starting to take off. When choosing a plan, your provider may give you the opportunity to purchase "replacement-value" or "actual-cash-value" coverage. Replacement-value coverage costs more, but it may be the best option if you own hard-to-find items. It pays to replace your covered property with brand-new gear. Actual-cash-value coverage costs less, but it pays only for your property's depreciated value.
Ask your insurance agent about choosing a policy limit for your Property policy. You don't want to estimate your coverage needs too low and have to dip into your own finances in the event of a loss.
Next: Chapter 2.2.C: Workers' Compensation Insurance
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