Do I need a BOND to start a Carpet and Tile cleaning business?

dmc2863

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Sep 4, 2011
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Danilo Cortez
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Hi Guys! Is a BOND(insurance) necessary to do carpet cleaning business. This is for myself and a helper. I know a guy who never had one, but he used a "WORK ORDER CONTRACT" signed by the client.
 
Mar 14, 2011
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Steve Penn
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If your talking liability insurance I suppose the answer to your question is how much do you have to loose.
do you have a house, a nice car, land, money in the bank ??? Can you and are you prepared to risk that and maybe loose it.
or are you hanging in there by the skin of your teeth, owning nothing and don't give a rats ass about the customer who has a 5K vase that you might accidentally brake.

think about what might happen if your porty springs a leak on the 6th floor and your happily cleaning while the water is pouring through the down stairs ceiling.


UMMM think about it

I'll let you make the wright choice.
 

totsuka

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Aug 3, 2011
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A BOND is not insurance. You need a business insurance policy in case you break something. You can go to the local library and check out a book on starting your own business in CA and it will identify all the administrative things you need to start and run a business in CA. You do have a business license right? Also, call a few insurance companies and ask them what business insurance policies they offer. If you form an LLC you can protect yourself a bit better too. Also, look at your insurance on your vehicle. It should be a commercial policy and not a regular consumer policy. Sure, you can lie and not tell the insurance company, but if you have a acident and file a claim they can deny it. Some cities/states have certain requirements for businesses to operate in certain areas.

My friend has a limo business and has to have a certain amount of insurance coverage to be able to pick up customers at the airport. I would think CA being CA, might have a few rules that you should be familiar with in order not to get hit it a fine.
 

totsuka

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Aug 3, 2011
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Being bonded means that a bonding company has secured money that is available to the consumer in the event they file a claim against the company. The secured money is in the control of the state, a bond, and not under the control of the company.

I don't see a need to be bonded, but I think you have to have business insurance because you might break or damage a customers property and that could get expensive quickly.
 

FyreLyter

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May 27, 2011
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Steven Dillon
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From what was told to me, if you have employees your business should be bonded, but if it is only you then business insurance will cover the liability issues that can arise in our profession. I dont know the legal ramifications of either, but hopefully more business minded folks can chime in.
 

Nick P

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Sep 30, 2008
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I've been in the business for 15yrs and I'm not bonded. I carry 1 million in libility insurance. Some commerical contracts require you to be bonded for theft reasons then i'll get one.
Nick
 

crash1big

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Mar 18, 2011
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Marlan Brown
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A bond is sometimes required by a company you might do work for. It is not needed to go into business and doesn't provide any real protection for you. It is designed to protect the company(customer) you are hired by. We've never been bonded and will not be unless a big client requires it. Like what Nick said.....:)
 
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Richard Baldwin

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That is a ridiculous amount of insurance for carpet cleaning. Even if I totally destroyed a high end carpet plus all the woodwork underneath and broke every vase in the place in a luxury mansion I would not need 10 mill to fix it. Regardless, at least 1 mill should be on your company to cover anything big. Never use your insurance to pay for small stuff like if you ruined a couch. The liability is for a major incident.
 
Mar 14, 2011
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That is a ridiculous amount of insurance for carpet cleaning. Even if I totally destroyed a high end carpet plus all the woodwork underneath and broke every vase in the place in a luxury mansion I would not need 10 mill to fix it. Regardless, at least 1 mill should be on your company to cover anything big. Never use your insurance to pay for small stuff like if you ruined a couch. The liability is for a major incident.
i totally agree with you .
Sadly when a standard is set the insurance companies jump on board tar everyone with the same brush and Hay presto we're hit with the big premiums and higher costs.

i remember in my first business 25 years ago liability insurance was $1mil now they're pushing for $20mil. most of the reason is so many people sue for damages on slip and trip claims within the cleaning industry.
 
Mar 14, 2011
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Here is a cut from a tender contract i was looking at to clean our local school

3.3.4 Insurances
Does the School’s Public Liability insurance policy cover your business? (This will only apply to contractors working up to 2X2 hour shifts per day). If the answer is yes, who from the School has confirmed that you are covered? If no the Applicant is required to provide details of current insurances held in respect of cleaning contracts.

NB: the Department requires public liability coverage of $20 million

Does the School’s Work Cover insurance policy cover your business? (you will not be covered if you are engaged in any other business outside of schools or are employed other than in government school cleaning ). If the answer is yes, name the person from the School who has confirmed that you are covered? If no, the Applicant is required to provide details of current insurances held in respect of cleaning contracts.
 

totsuka

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A friend of mine that sells insurance reports that big companies like to raise insurance requirements to force the smaller businesses out of business. Which makes since here in the States since most regulations start within an industry with the idea of making it more difficult for a competitor or new upstart.
 

crash1big

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Not sure if States or municipalities require a bond in general just to be in business, however some companies that you might work for can require you to be bonded.
 

Scott W

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I think it all depends on the area where you live in. For example, it is a requirement for contractors to have bond insurance in Florida. This is where the term "liscensed and bonded" comes from.
There are many types of bonds. Contractors in some areas must have a performance bond. This covers the client inc ase a contractor takes money and then skips out before the work is done. Really not needed for carpet cleaning.

A surety bond makes sure that your employees don't steal form the customer. It might be helpful in getting work but not legally required anywhere that I know of.

BTW - This bond does not cover the owner and family members. So for many O/Os it has no value in covering losses but it still might draw in a few customers who have no idea about bonds. They just hear "Licensed and Bonded."
 

Mama Fen

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If this helps to clarify any:

When I worked for the bank, I was bonded through Aetna (fingerprints and all). This meant that if I stole from a customer's bank account, the bonding agency would pay the customer back (rather than the bank having to do it). It is a sign of trustworthiness and does more good as a soother of nerves than as a practical application in most cases. Most people who can even get bonded without having to pay an exorbitant amount are trustworthy and don't have criminal records anyway.

Bonding companies often have strict policies about what you must do, as the owner who hires the employees, to insure that the people covered by the bond are clean, reliable, and low-risk.

It's not something that comes into practice very often in this area, in this industry. Restoration companies, which can handle millions of dollars of contents, are more often found carrying bonds than carpet cleaning companies.
 

ACP

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I had a contractors bond when I owned a landscape construction company.

Its more for doing installation type work, its instant money available to replace materials that could be stolen or compromised.

Like if you have a bunch of retaining wall blocks sitting in a driveway and someone steals them
 

Kyle8

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I just have a general liability insurance policy here in utah. Never had to use it in 16 years though
 
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