Janitorial bonds protect your clients, but they also protect you. Although these bonds are voluntary, operating any cleaning business without one poses a significant financial risk. Customers who know that you are taking responsibility for your employees will be more attracted to your business, compounding your professional image, but also keeping you out of lengthy court proceedings. These low-cost sureties are sure to attract even more quality customers and provide both you and your customers with peace of mind.
What is a janitorial service bond?
A janitorial service bond is a legally binding contract between you, the company that carries the bond, and your customers, that provides recourse for customers and protection for you and your company against consequences of employee theft during janitorial or cleaning services. A janitorial bond is also called a housecleaning, custodian, janitorial services fidelity, carpet cleaning or janitorial surety bond. Whether your company cleans carpets, upholstery, offices or homes, surety bonds are an essential addition to your business insurance and other business bonds.
Why do I need a janitorial service bond?
They are one of many types of business services bonds that you can obtain to enhance consumer confidence in the professionalism of your company. Obtaining one shows you are taking on the fiduciary responsibilities of your employees’ behaviors. Customers are more likely to hire a cleaning company that is bonded against theft than one that is not.
Besides protecting your customers, janitorial service bonds also protect you and your company. While no benefit is provided to employees directly, without a bond for your cleaning company, you and the company are vulnerable to costly court proceedings. Should a customer claim employee theft, every employee is at risk of losing their job if your company is brought to court for theft. No matter how well you screen your employees, nothing can assure you with 100 percent confidence that a theft won’t occur, which puts you, your employees, and your business at risk.
If you operate as a sole proprietor, LLC, or partnership, and employees steal from a customer, your personal possessions and finances are especially vulnerable without a bond, since you and your business are considered one legal entity under that business structure. Even if the company you own is its own entity, such as a corporation, court proceedings over employee theft could be enough to bankrupt a company. A company could also lose their insurance over an employee theft that goes to court, or, at best, face drastically increased insurance and future bond premiums.
How do these bond work?
If you own any type of cleaning business, and one of your employees steals from a customer while cleaning, the customer can make a claim on a janitorial services bond, up to the full bond amount, to be made whole, and the surety will pay the customer. If you cannot or do not refute a customer’s claim of employee theft, or if you are unable to come to an agreement with the customer, you will need to repay the surety the full amount of the customer’s claim on the bond. These only allow a certain dollar amount for claims, so any claims for losses beyond the bond amount will either be dismissed or brought to court.
What do janitorial services bonds cover?
Sureties for cleaning companies cover the value of stolen items, up to the full bond amount. Be aware that fidelity bonds are not insurance policies, so property damage is not covered as it would be under an insurance policy. Since many sureties also sell insurance, you may be able to qualify for binding and insurance at the same time from the same company.
How much do they cost?
These types of bonds are generally very affordable, especially compared to other bond types. The bond cost will vary, depending on the number of people your business employs, company history, and company credit. With larger bonds for larger cleaning companies, personal credit will affect the bond price and qualification. Bond prices are also affected by the value of a customer’s belongings.
Although sureties who sell janitorial services bonds will differ slightly in pricing, on average an annual bond premium of around $115 will cover a small to a mid-sized cleaning company. Premiums will increase with over five employees or with poor business credit. Consider a higher premium plan with even more coverage to attract larger clients. Although these higher premium bonds will require a personal credit check, clients with more or higher value belongings (and cleaning square footage) will be more attracted to the protection your janitorial company’s bonding provides.
If you own any type of cleaning company, you should strongly consider buying a janitorial service bond. Customers expect this type of bonding, and becoming bonded will attract even more business. Furthermore, bonding can quickly resolve what could become a lengthy and costly court proceeding, protecting you and your company as much as the bond protects your customers.
For the peace of mind and protection they offer for a relatively low cost, janitorial services bonds are well worth a conversation. Call us today with all your surety questions and take the first steps toward securing your janitorial bond.