Janitorial Bonds

No government agency in any state requires the purchase of janitorial bonds. The choice to purchase this type of bond is always voluntary, but there are several clear advantages to doing so.

Anyone who sends employees out to work in a client’s home or place of business runs the risk that a dishonest employee will steal or commit some other crime that results in a financial loss for the client. Potential clients also recognize that risk. Some clients—particularly large commercial clients such as banks and hotels—will not hire a janitorial company or cleaning service unless it is bonded to protect the client against illegal acts committed by its employees. Buying a janitorial bond is a small price to pay for gaining access to such clients.

Whether your business targets large commercial accounts or homeowners, having purchased a janitorial bond gives you a significant advantage in competing for new clients. Being bonded enhances your reputation and can be the key to growing your cleaning business.

Janitorial bonds, like other types of business services bonds, function more like insurance than like a surety bond. You get to decide how much coverage you want to purchase, what losses will be covered, and so on.

The bond protects your reputation and can prevent a client from suing you, but the primary protection is for your clients. A client who has incurred a loss due to a criminal act committed by one of your employees can file a claim against your bond and be compensated for that loss. Note that in some states, however, a claim can only be filed after the employee has been convicted of a crime.

It’s common for the surety bond company to pay claims upfront and then collect reimbursement from the bonded business owner. This gives you some time to gather the funds to cover the claim, but you are legally obligated to repay the surety company.