In this post, we’ll cover what it takes to start a cleaning business. Here’s everything you need to know about how to get licensed and bonded for a cleaning business.
Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your janitorial service bond needs.
Who Needs a Cleaning Business License?
Cleaning businesses typically don’t need a license specifically designated as a cleaning business license. They may, however, need to get a general business license or register their business as a taxable entity with the Secretary of State’s office in their state. And many counties and municipalities require licensing or registration of businesses at the local level for taxation purposes.
As it is used here, “licensing” refers to any licensing, registration, or permitting process that is required for businesses in general (not specifically cleaning businesses) at the state and/or local level.
What Are the Steps in the Licensing Process?
The primary purpose behind business licensing is to ensure collection of business income taxes and remittance of sales taxes paid to businesses by their customers. The licensing process typically involves:
- Completion of an application form (often online)
- Documentation of the legal structure and ownership of the business
- Proof of proper insurance coverage (e.g., general liability, workers’ compensation)
- Payment of an application or license fee
Additionally, some types of businesses such as retailers, restaurants, and hotels, may need to post a tax bond guaranteeing remittance. And for some types of businesses, there are additional professional or occupational licensing and bonding requirements, particularly in industries that are heavily regulated.
Cleaning services are not among the types of businesses for which purchasing a surety bond is a mandatory step in the licensing or registration process. However, many owners of cleaning services choose to purchase what is commonly referred to as a janitorial services bond.
Why is a Janitorial Service Bond Recommended?
Cleaning services typically send employees out to clean customers’ homes or business premises. The term “cleaning services” encompasses a variety of different types of cleaning businesses, such as general home cleaners, maid services, carpet cleaners, window cleaners, and companies that provide cleaning services to commercial businesses, such as banks, hotels, and retail establishments.
Owners of such businesses know they could be sued for damages resulting from an employee’s criminal or negligent acts, such as the theft of customers’ property. Janitorial service bonds protect the owners of cleaning services against liability for those damages.
Also, being bonded shows potential customers that you can be trusted and gives you an advantage over your competitors who have not chosen to purchase a janitorial service bond.
How Are Janitorial Service Bond Claims Paid?
In most states, the employee who caused the customer’s loss must be found guilty in a criminal court before the customer can file a claim against your bond. The criminal conviction is what makes a customer’s claim valid, which is a requirement for payment of the claim.
A surety bond agreement is a legally binding contract. When you purchase a janitorial service bond, you are guaranteeing your customers payment of any valid claims. You are also guaranteeing the surety (the company that approved the bond) that you will pay all valid claims. In practice, what usually happens is that the surety will pay the claimant directly, on your behalf, which creates a debt you then must repay to the surety.
How Much Does a Janitorial Service Bond Cost?
The premium you’ll pay for a janitorial service bond depends on the amount of coverage you want, the number of employees you want to cover, and how risky the surety believes it would be to pay claims on your behalf. You get to control the cost through the coverage decisions you make.
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