If you run a cleaning or janitorial business, workers' compensation insurance probably isn't the most exciting part of your day. But here's the reality: the moment you hire your first employee, it becomes one of the most important. In most states, it's not optional—it's the law. And getting it wrong can cost you thousands in fines, not to mention leaving you exposed if an employee gets hurt on the job.
The good news? Understanding how workers' comp works for cleaning businesses isn't as complicated as it seems. The key is knowing which class codes apply to your specific services, what drives your costs, and how to keep your premiums manageable while protecting your team.
Why Workers' Comp Matters for Cleaning Businesses
Cleaning work comes with real risks. Slips and falls on wet floors, repetitive strain injuries from vacuuming and mopping, chemical exposure from cleaning products, back injuries from lifting equipment—these aren't rare events. According to the Bureau of Labor Statistics, janitors and building cleaners experience injury rates above the national average for all occupations, with over 30,000 nonfatal workplace injuries reported annually.
Workers' compensation insurance covers medical expenses, lost wages, and rehabilitation costs when an employee gets injured on the job. Just as importantly, it protects you from lawsuits. When you have workers' comp coverage, employees generally can't sue you for workplace injuries—they file a claim with your insurance instead. Without it, you're exposed to potentially devastating legal liability.
In most states, coverage is mandatory as soon as you have even one employee. Texas is the notable exception where it's technically optional, but many commercial clients won't hire cleaning companies without it. Some states like Florida and California have strict enforcement, with penalties reaching $1,000 per day for operating without required coverage.
Understanding Class Codes for Cleaning Services
Here's where things get specific: your workers' comp premium is largely determined by your classification code. These four-digit codes, established by the National Council on Compensation Insurance (NCCI), categorize businesses by their risk level. Different cleaning activities carry different risk profiles, so they get different codes—and different rates.
The most common codes for cleaning businesses include:
Code 9014 (Building Cleaning - Residential): This covers house cleaning services, maid services, and residential cleaning contractors. It typically has lower rates because residential cleaning generally involves less industrial equipment and fewer hazardous chemicals. Rates often range from $0.75 to $1.50 per $100 of payroll.
Code 9015 (Building Cleaning - Commercial): This applies to janitorial services in commercial buildings, office cleaning, and retail space maintenance. The risk level is moderate, with rates typically between $1.00 and $2.00 per $100 of payroll, varying significantly by state.
Code 9016 (Window Cleaning - Inside Only): Interior window cleaning generally has lower rates than exterior work, usually in the $1.50 to $2.50 range per $100 of payroll.
Code 9019 (Window Cleaning - Exterior, Including High-Rise): This is one of the highest-risk classifications for cleaning work, with rates that can exceed $5.00 per $100 of payroll due to fall hazards and specialized equipment requirements.
Code 2585 (Carpet, Rug, or Upholstery Cleaning): Specialized cleaning services like carpet and upholstery cleaning fall under this code, with rates typically between $1.25 and $2.25 per $100 of payroll.
If your business provides multiple types of cleaning services, you may need multiple classification codes. This is important: misclassifying your employees under a lower-risk code to save money will catch up with you during the annual audit, resulting in substantial back premiums and potential penalties.
What Determines Your Premium Costs
Workers' comp premiums aren't a flat fee—they're calculated based on several factors that reflect your business's specific risk profile. Understanding these factors helps you anticipate costs and find opportunities to reduce them.
Payroll is the foundation of your premium calculation. Insurers take your total employee payroll and multiply it by your class code rate (expressed per $100 of payroll). So if you have $200,000 in annual payroll and your rate is $1.50 per $100, your base premium would be $3,000. This is why accurate payroll reporting during the initial quote and annual audit is crucial.
Your state makes a significant difference. Workers' comp is regulated at the state level, and rates vary dramatically. California and New York tend to have higher rates overall, while states like Indiana and Arkansas often have lower rates for cleaning businesses. Within the cleaning industry, you might pay $0.80 per $100 of payroll in one state and $2.50 in another for identical work.
Experience modification rate (e-mod) is where your claims history comes into play. Once you've been in business for a few years, insurers calculate your e-mod by comparing your claims to other similar businesses. An e-mod of 1.0 is average. Below 1.0 means you've had fewer or less expensive claims than expected, earning you a discount—sometimes 20% to 30%. Above 1.0 means more claims, resulting in a premium surcharge. A single serious injury claim can push your e-mod above 1.2, increasing your premium by 20% or more for three years.
Safety measures and risk management also factor in. Some insurers offer discounts for businesses with formal safety programs, regular training, and documented safety protocols. While these discounts might only be 5% to 10%, they add up—and more importantly, they actually reduce your likelihood of claims.
How to Keep Your Costs Down
The single most effective way to control workers' comp costs is preventing claims. That sounds obvious, but many cleaning business owners don't realize how much control they have. Implement basic safety practices: proper training on chemical handling, ergonomic techniques for repetitive tasks, slip-resistant footwear requirements, and clear protocols for reporting hazards. Document everything. Regular safety meetings, even brief ones, create awareness and demonstrate your commitment to safety.
Return-to-work programs matter more than most people think. When an employee gets injured, having a light-duty program that allows them to return to modified work quickly can dramatically reduce claim costs. An employee doing administrative tasks or light organizing while recovering costs far less than one sitting at home on full disability benefits. Insurers notice businesses that actively manage claims this way.
Audit accuracy is critical. Your policy is based on estimated payroll, but insurers audit your actual payroll annually. If you underestimated, you'll owe additional premium. If you overestimated, you'll get a refund. Keep meticulous payroll records separated by classification code if you have employees doing different types of work. Misclassification discovered during an audit can result in significant unexpected costs.
Shop around, but do it strategically. Workers' comp rates are regulated, but insurers can differ in how they apply credits, handle specific situations, and structure payment plans. Working with an independent insurance agent who specializes in commercial coverage for cleaning businesses can help you find the best fit. Don't just chase the lowest quote—consider the insurer's claims handling reputation and financial stability.
Getting Started with Workers' Comp Coverage
If you're just starting out or need to get compliant, the process is straightforward. First, gather your information: estimated annual payroll broken down by job type, your business structure and entity information, prior claims history if you've had coverage before, and details about the specific cleaning services you provide.
Contact an insurance agent or use online quote tools designed for small businesses. Be thorough and accurate in your application—this isn't the place to lowball your payroll estimates to get a cheaper quote. You'll pay the difference at audit anyway, and you'll create headaches for yourself.
Most policies run for one year with monthly or quarterly payment options. Many insurers require a down payment of 25% to 35% of the estimated annual premium, with the rest spread over installments. Once you're covered, you'll receive a certificate of insurance that you can provide to clients who require proof of coverage—and many commercial clients absolutely will require it before they'll hire you.
Workers' compensation insurance is simply part of running a responsible cleaning business. Yes, it's an added expense. But it's also protection—for your employees when they're hurt, and for you when facing the financial and legal consequences of workplace injuries. Get the right coverage, maintain good safety practices, and manage your claims carefully. Your business, your team, and your bottom line will all benefit.
