Starting a cleaning or janitorial business in New York seems straightforward enough—you've got the supplies, the know-how, and maybe a few clients lined up. But here's what catches most new cleaning business owners off guard: New York has some of the strictest insurance requirements in the country, and getting them wrong can cost you thousands in fines or even shut down your business completely.
The good news? Once you understand what's actually required versus what's just recommended, you can set up your insurance properly from day one. This guide breaks down exactly what you need to legally operate a cleaning business in New York, what it costs, and how to avoid the expensive mistakes that trip up new business owners.
Workers' Compensation: The Big Non-Negotiable
Let's start with the insurance requirement that's actually written into law: workers' compensation. If you have even one part-time employee—yes, even your cousin who helps you on Saturdays—you must carry workers' comp coverage in New York. No exceptions, no thresholds, no grace periods.
The penalties for skipping this coverage are brutal. The New York Workers' Compensation Board can hit you with up to $2,000 for every 10-day period you operate without coverage. But it gets worse. If you have more than five employees and get caught without coverage, you're looking at potential felony charges with fines between $5,000 and $50,000, or even one to four years in prison. The Board can also issue a stop-work order that immediately shuts down your business.
What does it cost? For cleaning businesses in New York, you're looking at approximately $152-$161 per month per employee. Residential cleaners tend to pay slightly less than commercial cleaners, but the rates vary based on your payroll size and claims history. That might sound steep, but it's a whole lot cheaper than the alternative.
General Liability Insurance: Your Client Contract Passport
Here's where things get interesting. General liability insurance isn't technically required by New York State law—but try landing a single commercial client without it. Most office buildings, healthcare facilities, and retail spaces won't even let your crew through the door without a Certificate of Insurance showing you carry general liability coverage.
The standard coverage limits you'll need are $1 million per occurrence and $2 million aggregate. This protects you if someone slips on your freshly mopped floor, if you accidentally damage a client's expensive equipment, or if your cleaning solution ruins a valuable piece of furniture. Without it, you're personally on the hook for those damages—and they can add up fast.
General liability insurance typically runs $500-$3,000 annually for cleaning businesses. The exact cost depends on your revenue, the number of employees you have, and whether you're doing residential or commercial work. Commercial cleaning tends to cost more because you're dealing with higher-value properties and more foot traffic.
Janitorial Bonds and Additional Coverage
Janitorial bonds fall into that same category as general liability—not required by law, but required by clients. These bonds protect your clients if one of your employees steals from them, which is obviously a concern when you're giving people keys to offices, medical facilities, or homes.
Banks, law firms, and medical facilities almost always require both janitorial bonds and performance bonds before they'll hire cleaning services. Performance bonds guarantee you'll complete the contracted work as promised. Combined, these bonds typically cost $100-$500 per year—a small price to pay to access higher-paying commercial contracts.
You'll also want to consider voluntary property damage coverage. This one's crucial because standard general liability policies often don't cover items you damage while you're actively working on them. If you knock over a laptop while dusting or break a client's expensive vase, voluntary property damage coverage pays for the repair or replacement. This coverage prevents those awkward conversations where you're deciding between eating the cost yourself or losing a good client.
Business Licensing and Registration Requirements
Good news: New York doesn't require a special cleaning business license. You won't need to pass any exams or meet special qualifications just to start cleaning. However, you still need to properly register your business.
First, register your business with the New York Department of State. If you're operating as a sole proprietor or general partnership, you don't need a state business license, but you do need to register at your city or county clerk's office. If you're using a trade name (a name different from your legal name), you must file a Certificate of Assumed Name with your county clerk.
Here's where it gets tricky: sales tax. Interior cleaning service agreements longer than 30 days are subject to New York sales tax. That means if you're cleaning an office every week on a monthly contract, you need to collect and remit sales tax. To do this legally, you must obtain a Certificate of Authority from the Department of Taxation and Finance at least 20 days before you start doing business.
The good news is that applying for a Certificate of Authority is currently free. The bad news? If you get caught making taxable sales without one, you face a $500 civil penalty for the first day, then $200 for each subsequent day (capped at $10,000 total). One-time cleaning jobs and certain specialized services like carpet cleaning may be exempt from sales tax, but you'll want to consult with an accountant to make sure you're handling this correctly.
Commercial Auto Insurance for Your Business Vehicles
If you're transporting cleaning supplies and equipment to job sites—and let's be honest, you probably are—your personal auto insurance won't cover business use. New York requires commercial auto insurance for all business-owned vehicles, and using a personal policy for business purposes can leave you completely exposed if you're in an accident on the way to a client's location.
Whether you're driving a van full of carpet cleaning equipment or just using your car to transport house cleaning supplies, commercial auto insurance protects your business if you cause an accident, if someone hits you, or if your vehicle is stolen or vandalized. This is another coverage that's not optional if you're using vehicles for business purposes.
Getting Started: Your Action Plan
Setting up your insurance and licensing correctly from the start saves you massive headaches down the road. Here's the order to tackle these requirements:
First, register your business with the New York Department of State and your local clerk's office. Take care of the Certificate of Assumed Name if you're using a trade name. Then immediately—before you hire anyone—get your workers' compensation insurance in place. The penalties are too severe to risk even a day without coverage.
Next, get quotes for general liability insurance. Shop around—prices can vary significantly between insurers, especially for cleaning businesses. Make sure your policy includes at least $1 million per occurrence and $2 million aggregate coverage. Add voluntary property damage coverage while you're at it.
Apply for your Certificate of Authority through the New York State Department of Taxation and Finance if you'll be offering ongoing cleaning contracts. Set up your sales tax collection system from day one—it's much easier than trying to sort it out later.
Finally, get your janitorial bond and commercial auto insurance if applicable. Having all your insurance documentation ready to go means you can immediately provide Certificates of Insurance when commercial clients ask for them, which gives you a huge advantage over competitors who are scrambling to get their paperwork in order.
Running a cleaning business in New York comes with serious insurance and licensing requirements, but they're completely manageable when you know what you're dealing with. Get your workers' comp and general liability insurance in place, handle your business registration properly, and you'll be set up to build a successful, fully compliant cleaning business that can compete for the best contracts in the state.
