This article originally appeared in "American Window Cleaner" magazine, January/February 1999.

Insurance, Safety, & Risk Management for Window Cleaners

by B. P. Huettner

Everyone in business faces risks - the risk of damages, the risk of large medical bills, even the risk of being sued. This article will address two ways to manage your risk: purchasing appropriate insurance and reducing risk through safety management.

Insurance Basics

One way to reduce financial risk is to purchase appropriate insurance policies. Your needs will vary depending on the type of business you have, such as whether you have employees or not and the types and locations of the windows you clean. For example, cleaning windows on a high-rise building is inherently riskier than store-front cleaning, and will require a different approach to managing that risk.Proper coverage should do three things: insure your property, insure the workers, and insure your business against liability in the most cost-efficient manner possible.

Insure Your Property

Property includes everything from the buckets that hold water to scaffolding and safety equipment. Your property should be insured against theft and damage - even if you only have a few buckets and some squeegees. If you have an office, you should insure its contents as business property (files, copiers, computer, etc.) Make sure you are covered wherever your equipment may be. According to Jeffrey Rubin, of Kaye Insurance Group in New York, "Most homeowner policies expressly exclude coverage for business property unless specifically agreed to by the insurance company. In addition, even commercial property policies designed for office equipment will not include coverage for equipment on the job or in the van".

You also need to consider the amount for which your property is insured. There are two types of coverage for property - actual cash value or replacement cost. A replacement cost policy would pay you whatever it costs to replace an insured item that gets damaged or stolen. Actual cash value policies would only pay the original cost minus depreciation. For example, a piece of equipment that cost $100 to purchase 3 years ago might depreciate 20% each year. The actual cash value, and the amount you would get if the equipment is damaged, would be only $60 - and you would still have to pay $100 or more to replace it.

The only property that is insured separately are vehicles. If you are using your personal vehicle for the business, you may need to change coverage to a commercial policy. Some of your larger customers may even insist that your vehicle be listed on a certificate of insurance, and personal auto policies can not generally be listed.

Insure Your Workers

Every state mandates that you carry Worker's Compensation insurance if you have even one employee. This usually includes medical benefits, lost wages, and death benefits. If you are a company owner, you'll need to obtain your own life, health, and disability insurance. As your business grows, your Worker's Compensation needs will change. For example, if you exclusively clean store-front or residential properties, you may be able to get a standard janitorial policy. As soon as your workers are above ground, however, you've increased the chances of injury from falling objects or from falls. A Worker's Compensation policy will need to be reviewed and probably amended as your business changes the type of buildings you service, or the number of workers.

If you hire sub-contractors instead of employees, you are still required to make sure that they are insured. You can do this by asking the sub-contractor for a certificate of insurance. If they are not insured, you may have to pay for their coverage on your premium as if they were employees.

Insure Yourself Against Liability

Liability, according to the dictionary, is "the state of being legally responsible". Liability insurance, then, is insurance that protects you in case you are held legally responsible for either bodily injury or property damage while in the course of performing your job. For example, if you accidentally broke a vase while cleaning near it, your liability insurance would pay for the replacement of the vase. Although this sounds simple and straight-forward, there are many areas of liability that you need to understand in order to fully protect your business.

Limits and Deductibles

Liability policies all have a maximum amount that they will pay out, and your premiums will increase as the limit rises. In addition, you will have a deductible amount which will have to come out of your pocket before the insurance company pays anything. The lower the deductible, the higher your premium will be. To protect yourself and your business, make sure that you can afford replacement of any glass that you clean.

"Care, Custody, and Control" Clauses

Some insurance policies have exclusions for property in your "care, custody, and control". This phrase means that if something happens to someone else's property while you are working on it, the liability insurance would not have to pay damages. This exclusion needs to be taken out of your contract, even if it costs you a slightly higher premium.

Obtaining Insurance

When you are ready to purchase insurance, you need to find an insurance agent, understand your policy options, and ensure that your policy covers the risks that you will be facing. "Many people find out too late that they purchased inferior coverage from an inferior insurance company, and end up responsible for judgments that can bankrupt their company and themselves individually", says Jeff Rubin. "Window cleaners should take full advantage of today's affordable, comprehensive coverage programs."

Choosing an Agent

Insurance is a heavily regulated industry, and all insurance agencies have to meet certain federal and state mandated standards. There are two types of insurance agents: agents who represent a single insurance company, and independent agents (sometimes called brokers) who can choose from many insurance companies. When choosing an agent, you should ask at least the following questions:

What is the company's Best's Rating? A.M. Best Company evaluates and rates insurance companies every year. These ratings are published in the "Best's Insurance Reports", available in your public library. You want to work with a company rated "A" or "A+".

Do you insure other window cleaners? Window cleaning businesses have unique needs. For example, there are risks associated with working above the ground, and risks associated with working with glass. You want to find an agent who understands all the aspects of your business.

What is the Claim Process? Talk to your agent about how the company handles claims that you might have to make. You want to know whether the agent will handle the claims, or if they will be routed through another office.

Choosing a Policy

As with any contract, it is important that you read and understand every word of your insurance policy. If you don't understand something, ask. If you don't get an explanation that you understand, you may want to find another agent. If you see a portion of the policy that you don't like, you can have it changed (although this will change your costs). For example, you want to ensure that the care, custody and control exclusion is removed, and that you understand other exclusions, such as height restrictions or limitations on scaffold work.

The more that the insurance company knows about you and your business, the more accurate and cost-effective your insurance will be. For example, if you have a lot of experience, and can show a record of safe, successful jobs, your agent will be able to negotiate a better price for you. Other factors that you need to document are the type of buildings you clean (high-rise or store front, residential or commercial), safety equipment you use, and training you have attended or conducted for your workers. You will need to show your written safety and training program, and may want to bring along any certificates of insurance that cover the product liability of the equipment you use. "An agent needs to know how many stories you'll be cleaning, estimated receipts, number of employees, and the percentage of cleaning done on commercial buildings vs. residential" according to Michelle J. Avila, of ISU Taurus Insurance Agency in California.

Group Plans

Depending on your individual situation, a group insurance plan may cost less than obtaining insurance individually. For example, the IWCA currently offers its members a group liability policy and is in the process of developing an entire package of insurance offerings for members, including Liability, Workman's Compensation, and Property. This would provide coverage that is better tailored for our industry. If you are a member of the IWCA, you can help with this project by completing and returning the survey you received in the December IWCS newsletter. "As soon as we get enough surveys," says Roy Hereth, who is the Insurance Chairman for the IWCA, "we can get quotes and start to offer a complete comprehensive insurance program." As with any purchase, of course, you want to compare costs and coverages. You may also want to check with other groups or associations to see if they offer similar insurance discounts, or with your state insurance board for local regulations.

Proposals and Insurance

Not only will insurance help you in case of damages, injuries, or lawsuits, but it can also help you when you are writing proposals or bidding on jobs. Some of the issues that may come up include:

Certificate of Insurance Your agent can provide you with a "certificate of insurance" stating exactly what coverage you have. You can show this certificate to potential customers - in fact, some customers may insist on a certificate of insurance.

Insurance Limit Some building owners may require a specific level of insurance, for example, $1,000,000 worth of liability, before you can work on their building. Make sure that you know what their requirement is before you submit a price to them because you may need to increase your insurance limit which would increase your base premium amount.

Named Insured Some larger buildings may want to be carried on your insurance policy as "named insured". The insurance company will add the building owner's name to your policy and may charge a fee. Ask your agent about their policy on this, and make sure that extra amount is covered by your bid.

Reducing Your Risks & Costs

You can reduce your risk of injury and accidents through safety training and site safety procedures. Ideally, this will reduce the number of accidents that occur, and thus the cost of your insurance policy. "If you want reduced costs," says Gary Duckworth, an independent agent broker, "you have to do something within your operation to reduce risk."

Safety Training

OSHA requires that all businesses have a written safety training program. By creating and following such a program, you can reduce accidents on the job site and reduce risk of damages. If you have a formal safety training document, and can prove that you conduct and attend regular training meetings, your agent will be able to negotiate lower rates. According to Stefan Bright, safety director of the IWCA, "There are now a lot of opportunities to get help creating a Safety and Training program. The IWCA offers a safety training session at their annual convention, and regional safety seminars to provide members with the information they need."

Site Safety

There are now many types of safety equipment available, and many ways to improve safety on your job site. You can reduce risk of accidents by consistently following your safety training, and by establishing procedures that prevent accidents. For larger jobs, fall-arrest equipment is available in addition to suspension equipment. There has also been a great improvement in safety awareness in the past several years. "More and more buildings are actually installing anchor points on the roof for maintenance workers to tie to." says Stefan Bright. If the building where you are working has these anchor points, it is less of a risk than a building without.

Site safety can have an impact on other types of jobs, too, such as residential or store-front. "One preventive measure to take while cleaning windows is to keep a "Caution Wet Floor" stand up sign visible to passers-by and not leave equipment laying around" says Michelle Avila. "This will help prevent slip-and-fall accidents, and keep your rates down as well."

Product Liability

This is important: Another area of risk is in the equipment that you use. Particularly with high-rise work, you want to purchase the safest possible equipment. But sometimes equipment fails. If you are using the equipment in the way in which it was intended, the liability for damages could be the responsibility of the manufacturer of the failed equipment. For example, if a bucket accidentally falls and hits someone passing by, standard liability coverage applies. However, if the bucket falls due to a piece of equipment that fails (such as a ladder that breaks), the liability may pass to the ladder manufacturer. If all of your equipment carries product liability insurance, this will reduce your liability exposure.

How do you know which products have specific product liability coverage? "The only way to know this is to check with the suppliers or manufacturers and ask for a certificate of insurance that shows coverage for that particular piece of equipment" according to Roy Hereth, of Roy's Window Cleaning in Lincoln, NE. "You want the security of knowing that if a product fails, the manufacturer has specific product liability insurance to cover it." To ensure that products you purchase are covered, always check for a certificate of insurance on the equipment you buy. Similar to the certificate of insurance your customers may request of you, this type of certificate proves to you that the manufacturer has their own liability policy. You can request a certificate of insurance from the supplier, or directly from the manufacturer.

You should also be aware that there are two types of product liability insurance, which will cover "per occurrence" and "claims made". "Per-occurrence" policies will cover the product whenever the failure may occur. "Claims made" coverage will only be in effect for a limited time, such as a year or two. Again, check with the supplier, who can get this information from the manufacturer.

Risk Avoidance

Finally, you can reduce your costs by doing what you can to avoid or minimize risky situations. In terms of liability, that might mean not cleaning windows in high-rise buildings, or not using chemicals that may damage glass. To reduce the risk of property damage, you might put in a burglar system and dead-bolt locks. "Including a dedicated safety and loss control program in operations of a construction business is the best way to reduce risk."says Gary Duckworth. "You'll pay less because the insurance company sees reduced risk. Good loss control means fewer people hurt, less damage to property, and lower premiums. It's a win-win situation."