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For Cleaning Contractors: Understanding Insurance Terminology



Fort Worth, TX – - Building service contractors (BSCs) usually find carrying proper business insurance a necessity.


But, just like any industry, the insurance industry has its own terminology that BSCs must understand in order to select the right insurance for our industry’s unique needs.


This month’s “Powr-Flite’s Tips from the Trenches” explains some of this insurance industry jargon below:  

·       Business Liability Insurance: This insurance protects your company against claims of damages caused by you or an employee.

·       Business Property Insurance: This insurance reimburses a BSC for loss or damages to its own equipment based on such factors as age of the equipment.

·       Bonding: Bonding insurance protects the client by insuring against loss caused from a lack of competence, theft, fraud, or dishonesty. However, if the insurance company must pay on a bond, the cleaning contractor typically will need to reimburse the insurance company for the amount paid.

·       “Additionally Insured:” Clients often ask the cleaning contractor to list them as “additionally insured” in the contractor’s insurance policy.  This provides the client with additional protections.  For example, if a tenant slips and falls in an office building where the building owner has been listed as “additionally insured,” liability for the accident will fall to the cleaning contractor (if they are the ones at fault) keeping the building owner out of the picture.

·       Workers Compensation Insurance.  Workers compensation ensures that workers will receive the financial assistance needed, such as covering medical costs, should they be injured on the job.  This does not necessarily apply to outside contractors.

“Insurance costs can vary and there are also other types BSCs may need,” says Mike Englund, trainer and product manager with Powr-Flite.  “One way to get through the insurance maze is to meet with two or three insurance brokers and select one who seems to know the industry well.”


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