Having insurance for your window cleaning business is essential if you want to be prepared for an unexpected accident. You can work with peace of mind and have a financial safety net in place—knowing your employees, business, and clients are backed by protection. When requesting an insurance quote or filling out an application, it’s very common to be asked how many employees work for your company.
At Insurance Canopy, we provide cleaning businesses with small business insurance, window cleaners included. Today we’ll walk you through how the number of employees you have will affect your business insurance and how subcontractors affect your policy.
Amount of Employees
Like most insurance policies, Insurance Canopy’s policy premium will go up for each additional employee added to your business. This is because the more employees there are, the higher the risk your company faces, and there are more people to have coverage for. The exact cost for this will vary depending on the state you live in and which risk tier you fall under. If you have questions about this, you can contact a licensed insurance agent at 844-520-6993.
What About Subcontractors?
Many business owners will have subcontractors working for them instead of hiring only full-time employees. A subcontractor is defined as someone who you (the business owner) have the right to direct and control while performing services for you.
Subcontractors will pay their taxes, unlike your full-time employees who have taxes taken out for them. A full-time employee will have a W2 tax form, and a subcontractor will have a 1099 form. Although there are added benefits to having subcontractors work for your company, keep in mind that most insurance agencies will not provide insurance coverage if more than 20% of your workforce consists of subcontracted workers. Almost all companies have a percentage limit, and it will differ based on location and company.
Employee Dishonesty and Surety Bonds
When deciding whether to hire subcontractors for your window cleaning business, be aware subcontractors are not covered under bonds or employee theft and dishonesty policies. If you need a refresher, a bond is a promise by a bond company to pay a customer if your company fails to meet its obligations. The bond company will cover the incident, and the business has to pay the bond company back—a bond has an indemnification agreement saying the cleaning business has to pay the bond company back.
Bonds are slightly different from insurance. While both are meant to reduce risk to a company or owner, bonds are generally meant to protect clients or customers. Another way to think of it is insurance protects the business itself from a loss, where a bond protects the person a company is working for. When they list bonding, clients are attracted to contractors because it provides them a layer of protection – assuring that the job will be completed correctly. Bonds create additional trust between you and your customer, assuring them that you will complete the required work on a project.
Bonds and insurance can both have claims filed on them from either party – with proper documentation – but the attraction to a service provider who is bonded comes back to the general ease of being able to file a claim on a bond and be financially restored.
Make sure to include your insurance and bonding details in your marketing efforts. This additional trust will go a long way in bringing in new business and keeping your existing clients. Check with your insurance and bonds provider to see if they have a trust logo that can be added to your business card, website, and promotional materials.
What You Need from Subcontractors
Because subcontractors are working independently, business operations with them are run a little differently. Subcontractors should have their general liability insurance and add your window cleaning company as an additional insured. This means if an accident occurs with this subcontractor, you have insurance coverage from their insurance policy, and their insurance company can cover the costs.
You should also request a Certificate of Insurance from the subcontractor to prove they have individual general liability insurance. This can help you have peace of mind as the business owner—knowing if an accident occurs, your business can receive coverage from their general liability policy.
About Insurance Canopy
Insurance Canopy provides small businesses with general and professional liability insurance at a monthly or annual rate. Our policies are designed to protect small business owners, including window cleaning businesses, in the case of a lawsuit arising out of their business operations. Window cleaners without cleaning business insurance may face lawsuits that could cost them their business and their livelihood. With a policy from Insurance Canopy, you get affordable coverage you need from A-rated carriers by building a custom insurance plan for your small business.