Do You Need Insurance and Bonding as a House Cleaner

Insurance. Insurance for house cleaners. Why do you need it? When do you need it? How much does it cost? We’re going to talk about that today. Hi, there. I’m Angela Brown and this is Ask a House Cleaner. This is a show where you get to ask a house cleaning question, and I get to help you find an answer. Now today’s show is brought to us by HouseCleaning360.com Now it’s a 360 view of the perfect home. If there’s a service provider that comes to your home, you should be able to find them there on HouseCleaning360.com, including pet taxis. What? What is a pet taxi? A pet taxi is somebody who comes to your house, they pick up your pet, they take them to the vet to their appointment. They wait for them and bring them home, so that you don’t have to take off work. If you need a pet taxi, go to HouseCleaning360.com If you offer pet taxi services, if you’re a licensed driver, and you’re insured, and you can offer this service, then go to HouseCleaning360.com and set up your listing so people can find you.

All right. Onto today’s session, which is about insurance. Now this is not from one particular house cleaner. This is from many house cleaners who ask me this 10 or 15 times a day. They say, “Hey, Ang, I’m a solo operator. Do I need insurance? It’s just me. Do I need bonding and insurance?” Now I partner insurance with bonding because it can be, and I recommend it be, part of the same insurance policy. When you go to get insurance, you will call an insurance company, and you will ask them for insurance and bonding. We’ll talk about both of those, but first of all, what is insurance? Insurance is a little bit of money that you pay a company, an insurance company, every single month. It’s going to be like $30, $40, $50, somewhere in that range. What happens is you give them money every month and you may never use your insurance policy. It’s just a guarantee. You’re paying them a retainer for their services. Now if you ever damage something, and the policies go up to about $2 million, if you damage something up to $2 million, they’re going to kick in and cover the cost of it.

All you have to do is pay a deductible. There are different deductibles, but I recommend you choose one that’s at about $100 because that’s not going to break the bank. It’s going to be about the cost of a house cleaning. You’re going to be able to pay it easily, but you’re not going to have to pay all the money, and I say all the money. If you damage somebody’s hardwood floors and it costs $30,000 to replace those hardwood floors, you do not have to pay the $30,000. You pay $100 deductible and the insurance company pays the $30,000. You say, “How does that work? How do they have $30,000 if I only gave them 30 per month?” All right. Here’s how it works. There’s a bank account and in the bank account is all the money. All the house cleaners add in all the money. There’s this big pool of money, supposedly, that is the insurance fund.

Supposedly you’re not going to damage somebody’s floors, so hopefully, and this is the hope, this is the perfect scenario, that you never have to use it. If there are thousands of house cleaners paying into the big pool of money and they never use it, there’s the $30,000 that pays for you when you make a mistake. Hopefully, hopefully you never have to use it. All right. When do you need an insurance policy? My suggestion, this is my personal opinion, you need it as soon as you start taking money in exchange for house cleaning, even if you’re only one person, even if you are related to that person. If it’s your mom and dad and you’re at home and you’re working for free, you do not need a policy. When you start taking money in exchange for house cleaning, you need an insurance policy. Now if you go to buy a new car and you’re on the car lot and you try to drive that car off, oh no, no, no, no, no, no.

They are not going to let you off the car lot without verifying your insurance. Because if you get out of the parking lot and a car comes whizzing by, and it smacks that car, and it blows it to smithereens, guess what? Somebody has to pay for that. In essence, what you’re doing when you go to a customer’s house, you are asking this person, “Will you let me have your most valuable possession,” and they’re saying, “Do you have insurance?” It would be similar to somebody coming up to you saying, “Hey, can I drive your brand new car?” This is a person you just hired off the street.

You’re kind of like, “Well, I kind of don’t know you very well.” “Okay. Well, there’s no insurance on the car, but can I drive it?” Are you going to give your brand new car to a perfect stranger and let them drive around in it? No, you would not do that. It’s the same scenario with the house. You’re asking a customer to entrust their most prized possession in your care and you’re not insured. That’s really dumb. Don’t do that at all. Period. It’s a dumb move. Now there are house cleaners that lie and they say, “Oh yes, I’m insured,” and they’re not. Here’s the problem with that. If you say you’re insured and you’re not, what you’re doing is you’re telling the customer, “I’m covered. I’m protected. You’re protected.” Based on that information, they’ve hired you, and that might be the defining information why they hired you versus another company. Let’s say you damaged a stainless steel refrigerator and it’s $2,500 and it has to be replaced.

When they come to you and they say, “Hey, you ruined my refrigerator. Your insurance needs to pay for this,” and then you go, “I kind of lied. I’m not insured,” now you have to come up with the $2,500 and you have to pay that. Check it out on social media when they tell all of their friends that their house cleaner lied, that they weren’t insured, they don’t have the money to cover the refrigerator, and what the heck does that do to your reputation? That is not cool.

You cannot recover from that. That’s going to go viral and people are going to post it and repost it, and people are not going to hire you. Not cool. All right. Let’s say that you decide you’re not going to have insurance and you’re just going to tell the customer, “Well, I choose not to have insurance.” You’re going to spend a lot of time explaining your reasons why, and that time is better spent cleaning their house for money. You’re going to jump through more hoops trying to explain why you don’t have it, then just to come up with a $30 or $50 a month. Get a policy and do it legally, right? It’s industry standard to be bonded and insured.

All right. Let’s talk about the bonding for a minute. What is the bonding? Why is bonding important? Bonding is another insurance policy that if you or an employee of yours steals something from the customer’s house, that the bond will kick in and it will pay for the stolen item. Then you can repay and make payments to the company to repair and replace whatever was stolen. There’s a catch, and here’s the weird catch about bonding. You’re probably never going to use a bonding policy, but here’s the catch, they have to prove you stole it. There has to be a police report. The police have to interview your people. The people that work for you have to confess that they stole it. They have to prove that you stole it in order for the bond to pay. If you’re one person and you know you’re honest, you don’t need a bond, but here’s the catch, get one anyway. Get one anyway. If you’re only one person and you know you’re never going to steal anything, get a bonding anyway. It’s a small rider. It’s called a rider. That’s the legal term.

It’s a rider that smashes onto your insurance policy. Let’s say your insurance policy is $30 a month and the rider for the bond is like $33. It’s going to be like another $3 or $4 a month. It’s not a lot of money, but what happens is it gives your client peace of mind. Here’s the thing, when you go to a customer’s house, if you decide you’re not going to have a bond, I’m not bonded, okay, again you’re going to spend a lot of time explaining why.

A lot of people don’t even understand what a bond is or how it works or why you have one. They honestly don’t even know what it means and why you need one. You say, “No, I’m not bonded,” now you’re going to spend 15 minutes of your time that you could be making money for, 15 minutes of your time explaining why you’re not bonded. Why did you choose to be cheap and not be bonded? Here’s what happens. Then they go to their neighbors. “I got this amazing house cleaner. She’s so awesome. She does a great job or he does a great job, but he’s not bonded and he’s not insured. Kind of go at your own risk, but he’s really good.” All right. That’s not a great recommendation. You want to be industry standard. The industry standard is bonding and insurance. It’s really important because everybody does it. All right. Let’s play this game. Let’s pretend that your air conditioning unit goes out and you’re going to hire a HVAC guy to come out and fix your air conditioning and your heat or whatever it is.

There are two companies. They both offer the exact same service. They have the exact same qualifications. They’re going to do the exact same thing, and they charge the exact same price. I’m just making this up, but let’s say that they did. Two companies. One is bonded and insured. One is not. Who are you going to choose? 10 times out of 10 people will choose the company that’s bonded and insured.

Why is that? It’s an added security and an extra piece of mind. That’s all it is. If you need it, it’s there. You probably will never use a bonding. Probably. I’m guessing because you’re going to hire honest people and they’re not going to steal things from customer’s houses. You might get accused of stealing things from customer’s houses, but then the insurance and the guarantee is, “Hey, we are bonded. Let’s get to the bottom of this. Let’s file a police report. This is serious business. Let’s get to the bottom of this. We’re covered. If we need to, we’ll kick in our bond. We’ll make sure you get back whatever it is was stolen or the value of whatever it is was stolen.” That is the purpose behind bonding and insurance.

It is a blanket peace of mind for you and your customers, and all things being equal. If there are two house cleaning companies in a competitive market, one is bonded and insured and the other is not, who are they going to choose? My suggestion is just go with the industry standard. Buck it up. Get the insurance policy, and now you’re a professional, and you can advertise that you’re bonded and insured because it lends an extra layer of credibility. All righty. That’s my two cents. Until we meet again, leave the world a cleaner place than when you found it. Insurance and Bonding.