Cleaning Agencies Insurance
Public Liability Insurance for Cleaning Agencies
If you operate a cleaning agency, whether you pay the cleaners, or they are paid by the homeowner then you need to read this as you may be inadequately insured at the moment.
Most cleaning agencies employ self-employed cleaners to work on their behalf whilst the business takes a finders/placing fee from the homeowner. Generally, these agencies will have public liability insurance to cover claims made against the agency by their customers for damage or injury caused by the cleaners.
As such the cleaning agency is taking responsibility for the actions of the cleaners and want to be insured to cover the negligence of their cleaners. In turn, the agency has a contract of service with the cleaner. This may only be a verbal contract, but in any case, a "master/servant" relationship exists.
This, therefore, means that the agency needs to arrange Employers Liability Insurance in addition to Public Liability Insurance. Why? Well if a cleaner was to be injured whilst working for your agency, they could legitimately bring a claim against your agency as you have placed them in the premises where they were injured. The fact that you are taking responsibility for their negligence would mean you are taking responsibility for them as an individual, and their welfare. These cleaners are classed under the guidelines issued by the Department of Work and Pensions as "labour only subcontractors" and need to be insured for both Public & Employers Liability Insurance as the definition of an employee under an insurance policy is;
Any person working for you in connection with your business who is:
employed by you under a contract of service or apprenticeship;
hired to or borrowed by you;
self-employed and working on a labour-only basis under your control or supervision;
engaged by labour-only subcontractors;
a labour master or a person supplied by him;
engaged under a work experience or training scheme;
a voluntary helper.
Common misconceptions about self-employed cleaners
Many cleaning agencies have been incorrectly advised to only arrange Public Liability Insurance, which leaves them open to paying claims for Employers Liability Insurance themselves. Even if you don't have Employers Liability Insurance, a cleaner could still bring a claim against you through the courts for their injuries. All they have to do is contact a "no win, no fee" solicitor and leave it to them.
There is only one reason your cleaners may NOT need to be covered by your insurance policy. That is if they are classed as "bona fide subcontractors". That means they do not have any contract of service and are free to work whenever they want and they invoice you for the work they do and if they cannot undertake the work they do for you, they are free to bring someone in to do the work for them.
For such cleaners, you will have checked that they have their own insurance to the same limit you have under your own policy and you will make regular checks to ensure their policy remains in force. Failure to do so would breach your contract with your own insurer.
Information we need to provide a quotation for your agency
In order for our insurer, Hiscox Insurance to give you a quote, you will need to provide the following information.
Turnover - the total amount paid by your customers (ie, the total amount paid to your cleaners PLUS the total amount paid to your business as a finders fee).
Employees wages - the total annual amount paid to anyone who works directly for the business who is carrying out cleaning duties
Payments to self-employed cleaners - just the amount paid to your cleaners
So for example, you have 10 cleaners earning £10 per hour, working 16 hours each. In addition, you charge £2.50 placing/finders fee.
Your turnover (total income) is £12.50 x 10 cleaners x 16 hours x 52 weeks = £104,000.
Your payments to cleaners is £10.00 x 10 cleaners x 16 hours x 52 weeks = £83,200
Employers Liability Insurance for Cleaning Agencies
As previously mentioned when you run a cleaning agency you will generally use self employed cleaners to help you or maybe employ people on a PAYE basis.
How they get paid doesn't matter, the fact that they work for you means they legally have to be covered by an Employers Liability Insurance policy. Whether you have one person working for you for a few hours a week or a team of self employed cleaners working 16+ hours a week you still have the same legal obligation. Anyone working for you has to be covered by law in accordance with the Employers Liability (Compulsory) Insurance Act 1969
There are a few exemptions for family businesses that only employ close members of their family. Please read the Act for more details of these exemptions.