You’ve dreamed about it, but now it’s finally happening. You’ve started your own cleaning business, and your business is beginning to thrive.
Now, you need to protect your business. And to do that, you need to plan ahead for liability.
What is liability, and why do you need to know about it? Here’s what you need to know to protect your cleaning business.
What is Liability?
The simplest liability definition is that legal liability refers to someone’s responsibilities under the law. There are many different forms of liability, but you’ll most often encounter the term in a lawsuit—i.e. when one party breaches their responsibility to another party and can be held liable for damages.
Let’s say, for example, that one of your employees gets injured while cleaning a property. This is why your cleaning business needs employer liability insurance. In simple terms, it protects you from liability if someone gets injured.
Or what if one of your employees breaks something of value in a client’s home? A general liability insurance policy would protect you from financial exposure.
Your employees likely drive in a vehicle to get to your clients, so you’ll want to talk to your insurance agent about protecting yourself in the event there is an accident involving an employee vehicle. If you have your own branded vehicles (which we don’t recommend), you’ll want a commercial auto policy.
These liabilities are not to be confused with business liabilities, which are debts your business owes to others. Some liabilities examples include things like bank debt, wages owed, or money owed to suppliers.
What is Liability Insurance?
Liability is an important part of several different types of insurance policies, but liability insurance is a specific insurance product protecting the policyholder against claims due to injuries or damage to other people or property.
This is one of the most important types of insurance on the market. If your negligence causes harm to someone else, liability insurance protects you. It specifically covers any costs or payouts if an insured party is found legally liable for someone else’s injuries.
For businesses, one of the most important forms of liability coverage is called general liability insurance, which protects you against financial losses if a claim is filed against your business.
Why Do You Need General Liability Insurance?
Liability insurance is so important that many states require it. And even for states that don’t, many business owners won’t go into business with you unless you have liability protection—otherwise, it’s too much of a risk for them.
In simple terms, liability insurance is the single best way to avoid the high costs associated with a lawsuit. Picture that for a moment—legal fees, court dates, the cost of discovery, the cost of a potential payout. If you can’t afford the payout from a lawsuit (from a financial or PR perspective) then you can’t afford to go without liability insurance.
Set Your Cleaning Business Up for Success
What is liability? In short, it’s either your worst nightmare or a non-issue. It all comes down to successful business planning.
What if we said you could have a seven-figure cleaning business—and more importantly, a business that gives you the income and freedom you deserve? Our coaching can help take your business to new heights, teaching you everything from fundamental business knowledge to inside tips for savvy business owners to get on a growth trajectory.
So if you’re ready to create a business that serves your life, check out our Cleaning Business Fundamentals course to get started, and don’t forget to check out our other resources to keep learning! Still in startup mode? Check out our CBF Smart Start program to learn everything you need to build a foundation for building your cleaning business.