Workers Compensation Insurance for Short-term Rental Cleaning Businesses

The following is a guest article by Insurance Canopy, part of our ongoing series on insurance for Airbnb cleaning businesses.

Running a short-term rental cleaning business is hard work, and it’s not without certain risks. Whether your employees are scrubbing floors or handling hazardous cleaning chemicals, accidents can happen. That’s where workers compensation insurance steps in. 

But what exactly is workers compensation, and why do cleaning businesses need it? Let’s break it down.

What is Workers Compensation Insurance?

Workers compensation insurance is designed to cover claims generated from employee work-related injuries and illnesses. It’s a safety net for cleaning business owners and their teams. 

Picture this: one of your employees is diligently scrubbing floors when she slips and twists her ankle. Of course, you want to ensure she’s taken care of, which is where workers compensation insurance comes in. 

What Does Workers Compensation Insurance Cover?

This type of short-term rental cleaning insurance covers her medical bills, lost wages, and recovery costs, allowing her to focus on healing without the stress of financial burdens.

Why Do Short-Term Rental Cleaning Businesses Need It?

Workers compensation insurance isn’t just about compliance (though that’s important too). Having this coverage shows your team that you genuinely care about their well-being, fostering a supportive work environment. 

Here are some practical reasons why workers compensation insurance is essential for cleaning businesses:

• Protects you financially: Without workers comp, you could face hefty out-of-pocket expenses for medical bills and lost wages if an employee is injured. The costs can quickly add up and strain your finances.
• Streamlines claims: Workers comp simplifies the claims process for your employees. With clear guidelines and support, they can easily navigate the system, minimizing delays and confusion in receiving the care they need.
• Avoids costly lawsuits: If an employee feels they need to file a claim and you don’t have coverage, it could lead to expensive lawsuits that disrupt your operations and harm your reputation.
• Aids employee morale: Offering workers comp demonstrates your commitment to your team’s health and safety, fostering a positive and supportive work environment where employees feel valued.
• Keeps your focus on growth: With workers comp in place, you can breathe easier, knowing you’re protecting your employees. This peace of mind allows you to concentrate on what you love most: growing your business and making your clients happy. With Turno, you can also better track employee performance and identify areas where additional training may be needed, ultimately reducing the likelihood of workplace accidents and enhancing the effectiveness of your workers compensation insurance.

What Are Your Legal Obligations?

The legal landscape around workers compensation can feel a bit like a maze — especially sinceeach state has its own unique requirements. Don’t worry, though! We’ve got you covered.

Workers Comp Requirements by State

Every state has its own laws governing workers compensation insurance, and it’s essential to be aware of what applies to you. Here’s what to expect:

• Coverage criteria: Most states require businesses with a certain number of employees to have workers compensation insurance. For instance, California requires employers with just one employee to get coverage, while some other states have higher thresholds. 
• Types of coverage: Coverage options vary by state. In Texas, for example, employers can choose whether to opt into the workers compensation system or remain non-subscribers. Meanwhile, states like Florida require coverage for nearly all employers. It’s good to familiarize yourself with your options!
• Reporting and compliance: If an injury does occur, employers are required to report it to both the employee and the state’s workers compensation board. This ensures that your workers know their rights and that claims can be filed quickly. 
• Dispute resolution: Every state has processes in place for resolving disputes that arise from workers compensation claims. Some have administrative boards dedicated to handling these issues, while others may involve the courts. Knowing how to navigate this can save you time and stress.
• Administration: Four states are monopolistic when it comes to managing workers comp, meaning you can’t purchase private insurance: Ohio, North Dakota, Washington, and Wyoming.

What Happens If You’re Not Covered?

Not having workers compensation insurance isn’t just a minor oversight; it can lead to serious legal and financial consequences for employers.

• Fines and penalties: Employers without the required coverage can face hefty fines. In California, for example, penalties start at $10,000 and can increase with subsequent offenses. That’s a hit to your budget you want to avoid!
• Legal liability: If an employee gets hurt and you don’t have coverage, you could be personally responsible for all medical expenses and lost wages. This can lead to significant financial strain on your business, and that’s the last thing you need.
• Increased insurance costs: If you’ve been found to be non-compliant, you might see your future cleaning business insurance premiums skyrocket. It can become much more expensive to secure coverage down the line, making it even harder to stay afloat.
• Business disruptions: In serious cases, the state might even halt your business operations until you comply with workers compensation laws. Talk about a tough spot that could lead to lost revenue!
• Criminal charges: In some states, failing to secure workers compensation coverage can lead to criminal charges, especially if it’s considered willful neglect. This can result in serious consequences, including fines or even jail time.

How Much Does Workers Compensation Insurance Cost?

On average, cleaning businesses pay $1,141.86 annually for workers compensation insurance, but keep in mind this can vary based on your state’s requirements, the size of your business, and more. 

Let’s go over what influences these costs and explore some strategies to keep them manageable.

What Impacts Your Premium

The cost of your workers compensation insurance may vary based on several factors.

• Type of work / risk level: Higher-risk jobs typically result in higher premiums due to increased injury likelihood.
• Location: Workers compensation rates can differ by state and municipality, influenced by local laws, labor markets, and injury rates. States with higher injury rates may charge more, so it’s wise to research your area.
• Payroll size: Workers comp premiums are usually based on total payroll. More employees mean higher premiums as your potential liability increases.
• Claims history: Your company’s past claims can significantly impact costs. Frequent or severe claims may raise premiums, while a clean record can help negotiate lower rates.
• Coverage amounts: The coverage level you choose affects costs. Opting for higher limits offers better protection but usually comes with higher premiums.

How You Can Reduce Your Costs

Here are some friendly tips to help your short-term rental cleaning business lower its workers compensation expenses:

• Implement safety training: Regular training helps employees recognize hazards and reduce accidents, and fosters a safety-first culture. Conducting safety audits to identify hazards like slips and improper lifting can also minimize risks in the workplace.
• Encourage reporting: Create a culture where employees feel comfortable reporting near-misses or unsafe conditions without fear of repercussions. A proactive approach can prevent injuries.
• Partner with an insurance agent: Find an agent who regularly works with cleaning businesses to find the best coverage and risk management practices.
• Review policies regularly: Regularly check your workers compensation policy to ensure you’re not over- or under-insured, adjusting as needed.
• Leverage Turno’s tools: Turno’s features include a suite of resources designed to streamline cleaning operations and improve safety protocols. The platform can help you manage employee schedules efficiently, ensuring that workloads are balanced and reducing the risk of overexertion. Additionally, Turno’s focus on effective communication can foster a safety culture where employees can easily report concerns.

What’s the Claim Filing Process?

Below is a simple guide to filing a workers compensation claim.

How to File a Workers Compensation Claim

Here’s what to do:

• Report the injury: Report the injury as soon as it happens. The quicker, the better.
• Get medical help: See a doctor right away. Keep all records and bills — these are important for your claim.
• Complete the claim form: Fill out the workers compensation claim form with details about the injury and your treatment. Ask for help if needed.
• Submit the form: Send your completed form to your insurance provider and follow their instructions to avoid delays.
• Follow up: Stay in touch with the insurance company to track your claim status.

Common Mistakes & Pitfalls for Employers

When it comes to workers compensation insurance for cleaning businesses​, avoiding common mistakes can save your cleaning business a lot of headaches down the road.

• Don’t ignore small injuries: Even minor injuries should be reported. Small issues can turn into bigger problems if not addressed promptly.
• Don’t delay medical attention: Waiting to get medical help can make things worse for both the employee and your business. Make sure employees get treated immediately.
• Don’t overlook safety audits: Skipping regular safety checks can lead to accidents. Stay proactive and identify potential hazards before they cause harm.
• Don’t forget to communicate: Leaving employees in the dark during the claims process can create stress and confusion, so keep them informed and offer support.
• Don’t assume you’re fully covered: Regularly reviewing your policy is key. As your business evolves, your workers comp needs might change too — don’t let outdated coverage catch you off guard.

Workers Comp vs Other Types of Business Insurance (What Each Covers) 

Below are the different types of insurance available and what each one covers.

How to Combine Coverages for Comprehensive Business Protection

Start with general liability insurance to cover everyday risks. If you have employees, add workers compensation insurance to protect them from workplace injuries and keep your business safe from claims.

If your short-term rental cleaning business provides services or advice, consider adding professional liability insurance. And if you own equipment or inventory, commercial property insurance is essential to protect your assets and cyber liability insurance if you store your data digitally.

Frequently Asked Questions

What Type of insurance is Best for a Cleaning Company? 

Consider key coverages like general liability for third-party injuries, workers comp if you have employees, and commercial auto for business vehicles. Property insurance covers your office and equipment, while professional liability helps with claims of mistakes. Janitorial bonding isn’t required but builds trust by covering employee theft. Talk to an insurance agent to find the right mix for your business.

What Business Structure is Best for a Cleaning Company? 

Choosing the right structure affects your taxes and liabilities. A sole proprietorship is easy to set up but leaves you personally liable. A limited liability company, or LLC, protects personal assets while keeping things simple. A corporation offers the most liability protection but comes with more regulations. Partnerships let you share the business with others, but liabilities are shared too. If you’re unsure, consult with a professional to pick what fits your goals.

Do Cleaners Have to be Insured?

Insurance isn’t always required, but it’s smart. It protects against accidents, helps secure your business, and opens up more opportunities — especially if you partner with platforms like Turno that cater to short-term rental properties. Being insured can enhance your credibility and attract more clients, ensuring you’re well-prepared for any situation.

Take Action to Protect Your Cleaning Business Today!

Ensure your short-term rental cleaning business thrives by staying compliant with workers compensation requirements. Partner with Turno to streamline operations and boost team performance for a safer, more efficient workplace. Don’t leave your employees—and your livelihood unprotected. Contact Insurance Canopy for a customized cleaning business insurance policy that meets your needs.

Disclaimer: The information provided here is only applicable to US-based cleaners. For specific insurance advice, please consult with your insurance representative.