If your employees are injured or fall ill for work-related reasons, Workers’ Compensation Insurance will provide funds for their medical expenses and lost wages. This is a critical coverage for cleaning services companies, and it is legally required by most states for businesses with employees.

What is Workers’ Compensation Insurance?

Workers’ Compensation Insurance provides financial and medical benefits to your employees if they are injured or fall ill as a result of their work. Workers’ Comp can also provide funeral, burial, and death benefits to dependents in the case of a work-related death.

Workers’ Comp is a no-fault policy and will provide coverage regardless of whether the employer or employee caused the injury. This coverage provides protection for a wide variety of injuries and illnesses, and can also cover a variety of employees, depending on state regulations. While an injured employee is recovering, Workers’ Comp can pay for medical expenses, rehabilitation, lost wages, and sometimes even vocational training. Depending on the severity of an injury, an employee may be eligible for benefits during the period of recovery, or in cases of permanent disablement, for life.

Example:

• An employee of your janitorial services company falls off a ladder while cleaning windows, breaking her elbow. Workers’ Comp would pay for her medical expenses and a portion of her lost wages.

Specific details of how Workers’ Comp handles claims, including what is covered, who is covered, and how much compensation is provided, varies from state to state. In most states, employees cannot opt out of Workers’ Comp coverage if their employer provides it. When employees accept Workers’ Comp benefits, they agree not to sue the employer for the injury.

Is Workers’ Compensation Insurance required for cleaning services companies?

If your cleaning services business regularly hires employees, it’s likely that your state requires you to obtain Workers’ Compensation Insurance. Because Worker’s Comp is regulated on the state level, each state has different laws about which businesses are required to have this coverage. Most states require you to purchase Workers’ Comp coverage as soon as you hire your first employee, but some don’t require it until you have reached a certain number of employees. Texas is the only state where Workers’ Compensation is entirely optional for all businesses.

It’s important to note that each state has different guidelines on what types of workers are eligible for Workers’ Comp. For instance, while some states may consider casual or occasional workers eligible, other states may exclude them from coverage. Make sure to check with your local state guidelines to understand exactly who is covered.

If you choose not to carry Workers’ Compensation Insurance when it is legally required, you may be subject to fines, penalties, and in some states, criminal charges. Even if you are not legally required to purchase Workers’ Compensation Insurance, it is an important coverage to consider, especially in a physically taxing industry like cleaning services, where workplace injuries may be more common. Companies that don’t have Workers’ Comp could be sued for the medical expenses and lost wages of injured employees.

What does Workers’ Compensation Insurance cover?

Workers’ Compensation Insurance covers work-related injuries and illnesses, whether they occur at your premises, outside work sites, or while employees are traveling for work purposes. Workers’ Comp also covers work-related deaths, providing funeral, burial, and death benefits for the employee’s dependents.

Example:

• One of your employees falls off the roof of a home while cleaning the gutters. He sustains a head injury, broken ribs, and a collapsed lung. Workers’ Comp would pay for the employee’s ambulance ride, hospital bills, ongoing medical expenses, medications, physical therapy, and a portion of lost wages.

States regulate what specific types of illnesses and injuries are covered, how claims are verified, and what benefits are available for employees. Most injuries that happen while working are covered, but since coverage requirements vary by state, it’s important for companies with employees in multiple states to work with their insurers to make sure that all employees are covered appropriately.

Example:

• A Californian employee of your carpet cleaning company contracts COVID-19. In California, Workers’ Compensation Insurance regulations presume that any worker who contracts the disease got it at work, so the employee would likely receive benefits. However, if your employee who lives and works in Georgia is diagnosed with COVID-19, the claim would be unlikely to be covered. Under Georgia’s Workers’ Comp laws, employees are considered to have significant exposure outside of work, so claims from employees who have contracted COVID-19 are not covered.

Who is covered by Workers’ Compensation Insurance?

Workers’ Compensation Insurance covers your company’s employees if they suffer a work-related illness, injury, or death. An employee is typically defined as anyone who provides services at the direction of an employer and excludes independent contractors.

Depending on your state’s regulations, certain types of workers may or may not be excluded from Workers’ Comp coverage. Coverage regulations may vary for seasonal workers, domestic workers, independent contractors, and undocumented workers, among others. It’s important to check your state laws to see what types of workers are covered under your Workers’ Comp policy.

What kind of claims does Workers’ Compensation Insurance pay for?

Injury and Illness

If an employee suffers a work-related injury or illness, Workers’ Comp can pay for:

• Medical expenses, including hospital visits, medical procedures, and prescriptions
• Ongoing care, including rehabilitation and physical therapy
• A portion of lost wages during the time the employee is unable to work
• Vocational training and job placement assistance

Lost wages are paid during the time the employee is medically advised to take time off work. Payments are typically calculated as a percentage of the employee’s wages, with the specific percentage varying by state. Most states also require a waiting period before an employee can begin receiving benefits.

Example:

• An employee of your house cleaning company trips and falls while mopping the foyer of a client’s home. She injures her hip and requires medical attention. Her physician has mandated that she use crutches while the injury heals. As she will be unable to work, Workers’ Compensation will pay for a portion of lost wages while she recovers, as well as any medical and rehabilitation expenses.

Death

If an employee dies from a work-related incident, Workers’ Compensation Insurance can pay for:

• Funeral costs
• Death benefits for the employee’s beneficiaries, such as a spouse or children

Death benefits are calculated based on the worker’s wages at the time of death (the insurer will usually pay about two-thirds of the workers’ income, but it varies by state). For a surviving spouse, the benefit may be paid until his or her own death or remarriage, depending on the state. For children, the benefits may be paid until the children reach age 18.

What are the key exclusions to Workers’ Compensation Insurance?

Workers’ Comp covers most injuries that occur at work, but what is covered varies depending on the state. There are some situations that are usually excluded in all states. Workers’ Comp generally does not cover:

• Injuries that occur while the employee is commuting to and from work
• Injuries arising from recreational activities where the employee’s attendance is voluntary and for the benefit of the employee (and not the employer)
• Substance abuse or alcohol-related injuries
• Injuries sustained while not engaged in work-related activities
• Fights or violence initiated by the employee
• Injuries that are intentionally self-inflicted
• Horseplay or violations of company policy

Example:

• An employee of your window cleaning company gets into a serious argument with a coworker that escalates into a physical altercation. Injuries would not be covered because the fight was initiated by the employee.

Workers’ Compensation Insurance vs. Employers Liability Insurance

It’s necessary to understand the difference between Workers’ Compensation Insurance and employers liability insurance. The coverages are related, but while Workers’ Comp is designed to provide financial and medical benefits to employees, employers liability insurance is meant to protect the employer from liability. In general, employees cannot sue their employer for injuries that are covered by Workers’ Compensation Insurance, and each state individually defines what injuries and illnesses are covered. However, in cases where employees have suffered injuries that are not covered under Workers’ Comp, they are able to sue their employer for damages. Employees may also sue for damages beyond what Workers’ Comp offers.

Employers liability insurance provides protection in these situations, covering legal fees, court costs, and settlements or judgments against your company. This coverage is often included as the second part of Workers’ Compensation coverage, but in some cases you may need to purchase it separately.

How much does Workers’ Compensation Insurance cost?

Pricing for Workers’ Compensation Insurance is based on a number of factors, including:

• Business location
• Number of employees
• Dollar amount of payroll
• Claims history
• Nature of the business, which is based on the industry classification code

To get a quote on Workers’ Compensation Insurance, use our quoting tool here.

When they calculate pricing for Workers’ Comp premiums, insurers typically look at a company’s risk levels. Each industry has a classification code that indicates its type of activities. Premiums will be more expensive for companies in physically hazardous industries.

Your company’s “experience rating” is another important factor in your premium pricing. An experience rating compares the number of claims and losses your company has had in the past with the average for similar companies in your industry classification. If you have many claims in your history, insurers consider it more likely that further claims will happen in the future. Premiums will be higher for companies that are believed to have a higher probability of future claims.

Final Word

Employee injuries and illnesses are a common risk that is especially relevant for cleaning services companies since employees in this industry perform physically arduous work that could lead to injuries. Workers’ Compensation Insurance will cover medical expenses and a portion of lost wages for employees who are injured while working or have an illness related to their work. This coverage is a legal requirement in most states, and even where it is not required, cleaning services companies should consider carrying this coverage to protect their employees who are injured in the course of their job duties.