Jul 05, 2023Managing Janitorial Work Comp Risk During Growth
Why Do Cleaning & Maintenance Companies Get Sued?
Running a cleaning business can be a lucrative endeavor as homes and businesses alike will always need help keeping things tidy. But it can also open the door to plenty of legal issues. Between managing finances, focusing on customer needs, and looking to grow a business, managers and owners can only devote so much time to their autonomous workers in the field.
For a small cleaning business, any kind of lawsuit can cause a lot of harm. From financial hits to reputational matters, dealing with allegations of any kind needs to be avoided. Here are some major reasons why cleaning and maintenance companies get sued.
With a majority of a cleaning business’s workers being considered independent contractors, there are some important things to understand, specially when it comes to legal troubles. First, many businesses classify individuals as contractors so they can benefit from not having to pay things like overtime and certain taxes (i.e. payroll, state, federal, unemployment). But these workers are actually doing the work that regular employees would be doing in the industry.
This can actually lead to misclassification issues and leave businesses open to liabilities. To help protect against this, cleaning companies can opt for carpet cleaning insurance and related coverage. This can help protect businesses when legal matters related to misclassification come up. But cleaning companies also need to know that contradicting numerous federal and state administrative laws and regulations can cause serious problems.
Not Following Standard Employment Laws
Employee benefits and complicated employment laws can create plenty of concern for small business owners who don’t understand them. Minimum wage laws, mandatory rest laws and protected leave laws, such as medical and family leave, need to be understood and adhered to in order to avoid legal problems.
Failure to follow the laws that apply to a cleaning business could open the door to lawsuits from employees as well as fines and penalties from labor authorities.
Issues with Clients
Cleaning companies operate inside businesses, homes, work sites, and so on. And while being able to conduct business in different areas is helpful for a company trying to expand its client base, it can also lead to a number of lawsuits.
When it comes to sending out a cleaning crew inside someone’s home, for example, there could be allegations of theft, destruction or misconduct by workers that are brought up. Cleaning companies can see a large share of allegations, even unfounded ones, come against them which can totally sink a small business.
Owners and managers should do their best to ensure the integrity of their employees and build a reputation of being reliable. Having a solid reputation, and a comprehensive carpet cleaning insurance plan in place, can help to provide a defense against allegations of any kind and help to reduce risks in the future.
About Tangram Insurance Services
Located across the Golden Gate Bridge, just outside of San Francisco, Tangram is a full-service Managing General Underwriter and Program Manager offering specialty programs. We focus on industry-relevant coverage, competitive pricing, and practical business and risk management solutions for your clients. Since we are not all things to all people, we make sure to create outstanding custom-built solutions that matter to those businesses, and the brokers who serve those industries. Contact us at (888) 744-9810.