Manage Your Risk


Starting a small business in 2025 is no small task. For commercial/contract cleaning businesses, understanding insurance costs is vital for budgeting and risk management. Typically, small businesses can expect to pay around $249 per month ($2,988 annually) for a comprehensive package that likely includes a business owners policy (BOP), commercial auto insurance, and the workers' compensation. However, this average can be influenced by several factors that are unique to each operation, like the specific risk profile of the industry, geographical location, number of employees, types of coverage selected, etc.

Key Factors Influencing Insurance Premiums:

Several critical elements are looked at by insurance providers when calculating premiums for cleaning businesses:

Industry Type: The cleaning industry, while generally not as high-risk as construction (for example), still has it's own liabilities. Risks such as slip-and-fall incidents and property damage during cleaning can impact rates.

Location: Businesses operating in areas with higher crime rates, increased risks of vandalism, or a history of severe weather may face higher premiums for commercial property and general liability insurance.

Building Characteristics: For cleaning businesses that own or lease a physical office or storage facility, the age and size of the building are factored into commercial property insurance costs. Safety features like various alarms and sprinkler systems can potentially lead to discounts.

Payroll and Annual Revenue: Higher payrolls directly impact workers' compensation costs, as premiums are often calculated per $100 of payroll. Similarly, businesses with higher annual revenue may see increased costs for liability policies.

Number of Employees: As the workforce grows, so does the potential for workplace injuries, illnesses, or other incidents that could lead to claims. This directly influences the cost of workers' compensation.

Time in Business: More established cleaning businesses with a longer operational history and a track record of responsible practices may qualify for lower premiums compared to some of the newer ventures getting started.

Claims History: A history of previous insurance claims can lead to higher premiums, as it indicates a higher risk profile to insurers. Maintaining a strong safety record and implementing risk management strategies can keep costs down.

Common Insurance Coverage Types and Their Average Costs:

Cleaning businesses typically require a combination of insurance policies to protect their operations:

General Liability Insurance: Averaging $42 per month ($504 per year), this covers accidental injuries to third parties (like a client tripping over equipment) and property damage to others' belongings. 

Commercial Property Insurance: With an average cost of $67 per month ($804 per year), this covers business property, including equipment and supplies/office space, against perils like fire, theft, and severe weather.

Business Owners Policy (BOP): Often a cost-effective choice, a BOP (averaging $57 per month or $684 per year) combines general liability, commercial property, and business interruption insurance, which covers lost income if operations are temporarily halted due to a covered event.

Workers’ Compensation Insurance: A legal requirement in most states for businesses with employees, this policy covers medical expenses, lost wages, and other costs if an employee is injured or falls ill due to their job. It averages around $45 per month ($542 per year), but can vary by state and specific job duties.

Commercial Auto Insurance: Essential for businesses using vehicles to transport staff and equipment, this covers accidents involving company-owned vehicles.

Tools and Equipment Insurance (Inland Marine Insurance): Averaging $14 per month ($168 per year), this coverage protects portable cleaning tools and equipment against theft and loss/damage.

Commercial Umbrella Insurance: For an average of $75 per month ($900 per year), this provides additional liability coverage that kicks in once the limits of other policies are exhausted, offering an extra layer of protection against large claims.

Errors and Omissions (E&O) Insurance: Averaging $61 per month ($735 per year), this can be important if the cleaning business provides any consulting or specialized services where professional advice could lead to claims of mistakes.

Cyber Liability Insurance: With an average cost of $145 per month ($1,740 per year), this covers legal costs and data recovery expenses in the event of a cyberattack, particularly relevant if client information is stored digitally.

Janitorial Bonds (Fidelity Bonds): While not listed with an average cost, these are often required by clients and protect them against theft or dishonest acts by cleaning company employees.

Having a deeper understanding of these components can help cleaning business owners can make informed decisions to secure insurance that protects their operations and employees, and often even the client.