Janitorial service bonds are voluntary bonds that protect the customers of janitorial companies from theft by employees of the janitorial company. Janitorial service bonds are not required by law but many larger commercial clients require a cleaning company to be bonded in order to be considered for their contracts. Additionally, a janitorial service bond can also serve as a market tooling and means of differentiation for a cleaning business. Customers are more likely to hire a cleaning company that they know have a financial guarantee against theft.
Please note this page is for car dealer licensing. If you're trying to register a vehicle with a missing title, a separate Lost Title Bond is required.
In our experience, companies that purchase janitorial service bonds are divided into residential and commercial cleaning services, with most of our customers being commercial. Within those categories, we see the following types of cleaning services:
Generally speaking, a janitorial service bond is appropriate for any cleaning service where theft can occur.
A janitorial service bond protects the customers of janitorial service companies from financial loss in the event that theft or accidents occur during cleaning. If a client's property is damaged or stolen, the bond will reimburse the client for the cost of the damage or loss.
Liability insurance, on the other hand, protects a janitorial service business from financial loss in the event that it is sued for causing harm to a person or their property. This type of insurance covers the cost of legal defense as well as any damages that are awarded in a lawsuit. Liability insurance can protect a business from a variety of claims, including slip-and-fall accidents, property damage, and injuries caused by products or services.
The main difference here is who is protected. A janitorial service bond financially protects customers of the janitorial service company, whereas liability insurance protects the janitorial service company itself from financial loss caused by lawsuits and liability.
Janitorial service bond is essentially a business service bond. “Janitorial service bond” is just a term that’s used more commonly in the cleaning industry.
In our experience, a janitorial service bond can be beneficial to a cleaning business in numerous ways.
Win bigger jobs: Most cleaning jobs that require bidding have some sort of bonding requirement. Being bonded opens up your business to these opportunities.
Making amends with clients: If one of your team members acts dishonestly while cleaning, a client will likely consider taking their business elsewhere. However, if you have a bond that can cover the client’s losses, there’s a better chance of making amends with the client and retaining them even after a mishap.
Reduce claims on your liability insurance: Janitorial bond premiums and claims are tracked separately from your general liability insurance, therefore making a claim on the bond will not raise your liability insurance premiums. If a theft occurs, the bond will be responsible for reimbursing the client, reducing the likelihood of lawsuits and claims on your liability insurance. While your bond premium may increase slightly, it is still better than making an insurance claim in most cases since bonds are not expensive to begin with.
With a janitorial service bond, a surety company covers any cash or physical possession that is stolen from a client’s residence or business, up to the full bond amount.
Generally speaking, there are a few things that are not covered by the bond:
Claims work similarly to general insurance claims, in that they go through the surety company providing the bond. The surety company will request information from the client making the claim and investigate to ensure that the claim was valid. If the claim was valid, then the surety company will pay the client back for their loss, up to the bond amount. One helpful feature of janitorial service bonds is that they typically carry a “conviction clause”. This means that the surety company only pays out proceeds of a claim if the accused cleaner has formally been convicted by a court of law. This is typically helpful to janitorial service companies because it requires clients to provide proper evidence of the crime and limits fraudulent claims against the bond.
If you’ve bonded with us and need to update your bond information, just give us a call and we’ll take care of it. Typically, we get change requests for business name, company size and bond amount.
