In the cleaning services industry, there’s always a chance that an accident could happen, where you or an employee accidentally damage a client’s property or cause an injury to a third party. General Liability Insurance can provide financial protection from these risks, helping your company continue functioning if you are held liable for incidents of harm to third parties.

What is General Liability Insurance?

Commercial General Liability (CGL) Insurance provides coverage if you accidentally harm a third party in the course of doing business. If your company unintentionally causes property damage, bodily injury, personal injury, or advertising injury, CGL will pay for legal fees and damages. This coverage is a valuable financial safeguard for your company in cases where someone sues you because of damages caused by your business. It’s important to understand that this coverage applies to injuries to third parties, who could include clients, landlords, or vendors. It does not apply if your employees, your business, or your property suffer damages.

Example:

• Due to an equipment malfunction, your carpet cleaning company accidentally damages an expensive piece of furniture while cleaning a client’s carpets. Your General Liability Insurance would cover the damages.

Why do cleaning services companies need General Liability Insurance?

As a cleaning services company, much of your work takes place at customer homes, offices, and worksites. This makes you particularly vulnerable to the types of claims that General Liability Insurance covers. No matter how careful your employees are, it’s always possible that they could accidentally damage someone else’s property or cause an injury, which could lead to a lawsuit. If an incident occurs, CGL can cover the expensive legal fees and settlements that could result.

In addition to property damage and bodily injury, CGL includes a personal and advertising injury component, which can help protect your company from claims of non-physical damage, such as copyright infringement, libel, slander, invasion of privacy, and other related claims. This can be useful if your company engages in marketing or advertising its services, which could open you up to personal and advertising injury liability.

What does General Liability Insurance cover?

General Liability Insurance covers claims of property damage, bodily injury, personal injury, and advertising injury that occur as a result of your services. If your company is hit by a lawsuit involving these claims, CGL will cover damages, medical payments, and legal and defense costs. Particularly for smaller companies, CGL can be critical. Lawsuits involving personal injury can be incredibly costly, and even if your company is able to win a case, the time and money sunk into defending yourself can be a financial burden and even bankrupt your organization.

Property Damage

If you or your employees accidentally damage another person or company’s property, CGL will cover the costs of replacement or repair.

Example:

• One of your employees is mopping the floor at a client’s home. She accidentally knocks the back of her mop into an expensive painting on the wall. Your CGL policy would pay for the damages.

It’s important to note that CGL typically excludes property belonging to others that is under your care, custody, or control. For cleaning companies, this is particularly important, as you are often hired to clean others’ property, meaning you would be taking temporary care, custody, or control of this property. To cover damage to this type of property, you will need an additional endorsement for voluntary property damage, which provides coverage for unintentional damage to others’ property while that property is under your care, custody, or control.

Example:

• One of your employees is vacuuming the floor at a client’s home. She accidentally leaves deep scratches in the hardwood flooring with the vacuum cleaner. Your CGL policy would not cover this damage unless you had voluntary property damage because the floor would have been considered under your care, custody, or control.

Bodily Injury

If a person who isn’t one of your employees is injured on your property or during the course of your business operations, CGL will pay for damages. CGL could cover a number of costs including medical expenses, lost income, pain and suffering, funeral expenses, and legal fees if there is a lawsuit.

Example:

• A prospective client comes to your offices for a scheduled meeting. On the way in through the lobby of your office, the client trips over some tools that were left on the floor and injures his hip. General Liability Insurance would pay for any medical expenses for the client and legal fees if he sues.

Personal and Advertising Injury

The personal and advertising injury section of General Liability Insurance covers non-physical injuries caused by you or your employees in the course of your work. This coverage protects businesses from third-party lawsuits that commonly involve reputational injuries, including copyright infringement, slander, libel, disparagement, and invasion of privacy. For cleaning services businesses, these types of incidents most commonly occur with advertising or marketing campaigns.

Example:

• Your pool cleaning company comes up with a new slogan for use in local advertisements. Unfortunately, the slogan is unintentionally almost identical to the slogan of another company in the area. The other company sues you for copyright infringement. Your insurer would cover legal fees and any resulting settlements.

Products and Completed Operations

General Liability Insurance provides products and completed operations coverage in situations where your company’s product or service is found to have caused property damage or bodily injury. For cleaning companies, the completed operations aspect of coverage is most likely to be relevant. This coverage specifically applies to property damage or injuries that take place away from your business’s premises and are caused by your work after it has been completed. If the incident occurs on your premises or while your work is still in progress, it would be covered by the bodily injury and property damage sections of your CGL policy.

It’s also important to note that products and completed operations coverage does not cover damage to your product or completed work itself; it only applies if the product causes damage to a customer’s other property.

Example:

• Employees of your cleaning business service clean the floors of an office building. They use a cleaning agent that leaves the floor particularly slippery. Someone who works in the building slips on the freshly cleaned floor and falls, sustaining a head injury. Your insurer would pay for medical expenses and damages if the injured person sues.

Legal Defense

Commercial General Liability Insurance will provide funds for defending liability claims brought against your cleaning service company, no matter who is at fault. Coverage includes attorney fees, court costs, expert witness fees, and other expenses. Your insurer will cover the cost to defend your case up the limits of your policy. CGL policies typically do not subtract your legal fees from the limits of insurance.

Example:

• Your CGL policy has a limit of $1 million per year, and in one year your company is found liable for two judgments, one for $400,000 and one for $500,000. Your total legal fees are $200,000. In this case, the insurer will cover all costs, even though the cost of the judgments and legal fees combined are over the total limit of insurance.

Medical Payments

Medical payments coverage provides funds for medical or dental services that may be required if someone is injured, regardless of who is at fault. It can cover first aid, ambulance services, and other expenses. If an accident that causes bodily injury occurs on your property, adjacent to your property, or as a result of your business operations, your CGL insurance will pay medical expenses up to the insurance policy’s medical expenses limit. This can help reduce the risk of lawsuits. The medical payments portion of CGL coverage differs from bodily injury coverage, which pays if your company is found to be at fault.

What are the exclusions to General Liability Insurance?

Commercial General Liability Insurance has a number of common exclusions. They include:

• Property under your care, custody, or control. You will need an additional endorsement for voluntary property damage.
• Automobile incidents. You will need commercial auto insurance to cover vehicles your company owns.
• Employee injuries. Workers’ compensation insurance covers your employees if they are injured or fall sick on the job.
• Employment discrimination lawsuits. Employment practices liability insurance covers your company if current, former, or prospective employees bring lawsuits accusing your firm of wrongful treatment.
• Property belonging to your business. You will need property insurance to cover your business property. For specialized, high-value equipment that you transport to worksites, you may need inland marine insurance.
• Damage or injury caused intentionally.
• Liability resulting from crimes or fraud.

What are the limits of insurance for General Liability Insurance?

The limits of liability are the maximum amount of funds your insurer will provide for losses during a policy year. When you purchase an insurance policy, you can choose the policy’s limits; you will have to pay higher premiums to receive higher limits.

CGL insurance policies typically have both a per year maximum and a per occurrence limit. The per year maximum is the amount the insurer will pay for all incidents over a single year, while the per occurrence limit is the maximum amount the insurer will pay for a single incident.

Example:

• Your window cleaning company has a CGL policy with a limit of $1 million per year and $500,000 per incident. Two claims are filed against your company in one year. The first settlement is for $200,000 and the second is for $600,000. Your insurer will cover the entire amount of the first claim because it is within the occurrence limit. It will pay $500,000 of the second claim, but it will not cover the remaining $100,000 because the claim is greater than the limit for a single claim.

Pricing and Quotes

AdvisorSmith found the average cost of General Liability Insurance for cleaning services businesses was $648 per year. This average cost was based on cleaning businesses with up to $500K in revenue for coverage of $1 million per occurrence and $2 million in aggregate.

Pricing for General Liability Insurance is based upon the unique risks your business faces. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a carpet cleaning business with a history of multiple claims will probably have higher liability premiums than one with relatively few past claims. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer General Liability Insurance:

Provider	General Liability	Business Owner's Policy	Product Liability
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??
Embroker	??	??	??

Final Word

General Liability Insurance provides a range of coverage that is especially important for cleaning services companies, since their work typically involves handling other people’s property and working at other locations. This means that there’s always a possibility that your employees could accidentally damage a client’s property or cause a physical injury, leading to costly lawsuits, damages, and settlements. Purchasing General Liability Insurance can provide necessary protection from the financial losses that could result from these incidents. CGL insurance can give you and your clients peace of mind, knowing that your business will be able to cope with unexpected accidents.