Jane Dotson
If you're thinking of starting a cleaning business in Florida, you'll need to be clued up on the different types of insurance available to protect your business from financial loss. The type of insurance you need will depend on the kind of cleaning business you're running—for example, whether you're offering residential or commercial cleaning services, and whether you're operating from a physical location or not. At the most basic level, you'll need general liability insurance to protect your business from claims of property damage, bodily injury, and personal injury. However, there are several other types of insurance you may want to consider, including commercial property insurance, commercial auto insurance, and workers' compensation insurance.
| Characteristics | Values |
|---|---|
| License requirements | No license is required for residential cleaners in Florida, but a business license is needed for mobile detailing in many counties and municipalities. An occupational license is required for businesses in Miami County. |
| Tax permit | Not required for residential homeowners, but necessary for commercial clients. |
| Registration fee | None for online registration, $5 for mail registration |
| Insurance requirements | General liability insurance is foundational and mandatory in Florida, shielding businesses from claims related to bodily injury, property damage, and personal injury. |
| Commercial property insurance covers damage to business property, equipment, and inventory. | |
| Commercial auto insurance is required for business vehicles. | |
| Workers' compensation insurance is mandatory for businesses with four or more employees, covering medical expenses and lost wages for work-related injuries. | |
| Business owner's policy (BOP) combines general liability and commercial property insurance, offering additional coverage for physical investments. | |
| Professional liability insurance protects against claims of negligence for professional services. | |
| Bonds | Surety bonds protect clients against theft, while bonds for licenses and permits assure clients that the business will comply with laws and regulations. |
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What You'll Learn
General liability insurance
Small cleaning businesses in Florida are often eligible for a business owner's policy (BOP), which bundles general liability and commercial property insurance at a discount. This can be a cost-efficient way to protect your business assets, such as a storefront or storage facility, as well as equipment and inventory.
You can also add tools and equipment coverage to your general liability insurance, which is perfect for Florida cleaning businesses facing unpredictable weather or busy work environments. Additionally, if you use digital means to conduct any part of your cleaning business, cyber liability coverage can help protect you from lawsuits arising from data breaches or other cyber incidents.
Finally, it's worth noting that general liability insurance does not cover injuries sustained by you or your employees. For that, you would need to consider workers' compensation insurance, which is mandatory in Florida for businesses with four or more employees.
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Commercial auto insurance
Florida law requires business vehicles to be covered by a commercial auto policy. This distinction is important because personal auto policies typically exclude business use. If your employees use their personal vehicles for work-related tasks, such as travelling to clients' locations or making deliveries, it is highly recommended to have commercial auto insurance. This type of insurance can be added to general liability insurance or a business owner's policy (BOP).
The cost of commercial auto insurance in Florida can vary depending on several factors. The size and type of vehicle, as well as the nature of your business, can influence the premium. For example, a large carpet cleaning van with specialised equipment would generally have a higher premium than a smaller delivery van without attachments. Additionally, the level of risk associated with the industry can impact the cost, with higher-risk industries paying more for coverage.
When selecting a commercial auto insurance policy, it is important to choose coverage limits that align with your business needs and comply with Florida state law. Opting for a reputable insurer that specialises in commercial auto insurance can provide you with peace of mind and ensure you get back on the road quickly after an accident.
Commercial umbrella insurance is another option to consider. It enhances your business insurance coverage by boosting general liability insurance, commercial auto insurance, and employer's liability insurance. This type of insurance can provide added protection for your cleaning business in Florida.
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Workers' compensation
The cost of workers' compensation insurance for your cleaning business in Florida will depend on various factors, including the size of your business, the number of employees, and the type of work they perform. The claims history of your business and your payroll will also impact the cost of your policy. Cleaning businesses in Florida pay an average of $1,627 per year for workers' compensation insurance, but this may vary depending on the specific circumstances of your business.
Even if you are not required to have workers' compensation insurance because you have fewer than four employees, it is still a good idea to consider purchasing this type of insurance. It can provide protection for your business and help cover the costs of any work-related injuries or illnesses that may occur. Additionally, some clients may require proof of insurance before hiring your cleaning services, so having workers' compensation insurance can make your business more attractive to potential clients.
When reviewing quotes for workers' compensation insurance, it is important to understand the limitations of the policy and ensure that all of your employees are covered. Not all policies are the same, and some may offer more benefits than others. As the owner of a cleaning business, you may also want to consider adding business owner's coverage to your policy to protect yourself in case you are injured at work.
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Surety bond
If you are starting a cleaning business in Florida, you may want to consider purchasing a surety bond. A surety bond is not a type of insurance, but it can protect your cleaning business and clients from financial loss in the event of employee theft. While a surety bond is not legally required in any state, it is often a contract requirement for commercial clients.
A surety bond is a legally binding contract between your company, the company that carries the bond (the surety), and your customers. If one of your employees steals from a customer, the customer can make a claim on the bond, and the surety will pay the customer up to the full bond amount. The bond amount can range from $10,000 to $100,000, depending on the size of the space you are cleaning and the value of the customer's belongings. For example, if you work in residential homes and small spaces, a bond of $10,000–$25,000 will likely cover your needs. On the other hand, if you service large commercial or public spaces, a bond of $50,000–$100,000 may be more appropriate.
In addition to providing financial protection for your clients, a surety bond can also protect you and your company. Without a bond, you and your company are vulnerable to costly court proceedings if a customer claims employee theft. With a surety bond, the surety company will pay the customer directly, reducing the risk of lengthy and expensive legal battles.
While a surety bond is not required to operate a cleaning business in Florida, it can make your company more attractive to potential clients who prefer to work with bonded firms. Therefore, purchasing a surety bond can be a worthwhile investment to enhance your company's reputation and provide peace of mind for both you and your customers.
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Business licenses
To start a cleaning business in Florida, you need to be aware of the state and city license requirements, permits, and business insurance mandates. The type of cleaning you plan to offer and the place where you plan to clean will determine the rules you need to follow to keep your business compliant.
Firstly, unless you are a sole proprietor, you need to register your business with the state and pay the appropriate filing fee. If you are a sole proprietor, you do not need to register with the state.
Secondly, while the State of Florida does not require residential cleaners to have a license, many counties and cities within the state do. You will need to check with the county or city clerk's office in the area where you intend to start your business to find out if you need a business license. For example, if you plan to open a business in Miami County, you will need an occupational license.
Thirdly, unless you only plan to include homeowners on your client roster, you will need a sales tax permit. Residential cleaning customers are exempt from paying sales tax, but commercial clients are not. There is no registration fee if you register online with the Florida Department of Revenue, but if you register by mail, it costs $5.
Finally, you will need to meet local regulations after meeting state requirements. You will need to check with the city or county clerk in the area where you plan to start your business to find out what licenses and permits are required. For example, you will need a business tax receipt (BTR) in many Florida counties and cities. Previously known as an occupational license, a BTR applies to anyone providing merchandise or services, like commercial or residential cleaning. Essentially, it means that you have to pay business taxes to operate within certain county or city limits. Rules and regulations are subject to change, so be sure to check local websites for the most up-to-date information.
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Frequently asked questions
The insurance requirements for a cleaning business in Florida depend on the type of cleaning services you plan to offer, the place where you plan to clean, and the number of employees you have. Here are the main types of insurance to consider:
- General liability insurance: This is often the first insurance policy purchased by a cleaning business as it covers common risks such as property damage, bodily injury, and personal injury.
- Workers' compensation insurance: This is mandatory for Florida businesses with four or more employees. It covers medical expenses and lost wages if an employee is injured on the job.
- Commercial auto insurance: If you have business vehicles, you will need this type of insurance to cover accidents and liability.
- Commercial property insurance: This protects your physical assets, such as equipment and inventory, from risks like fire or theft.
- Business owner's policy (BOP): This combines general liability and commercial property insurance into a single package, often at a discount.
You are only required to have a janitorial bond if you work with a government agency. However, having a bond can make your business more attractive to clients who only hire bonded companies. There are two types of bonds to consider:
- Surety bond: This protects your clients from theft.
- License and permit bond: This assures your client that you will comply with all applicable laws and regulations.
Residential cleaners in Florida do not need a license. However, you will need a business license for mobile detailing in many counties and municipalities. A sales tax permit is required if you have commercial clients, but it is not needed if you only serve residential homeowners.
The cost of insurance for a cleaning business in Florida depends on coverage types, business size, and risk factors. It can range from $100 to over $1,000 annually.
