What Underwriters like and dislike about Janitorial Services Companies

Janitorial Services Companies are placed in NCCI Class Code 9014 for Workers Comp

Janitorial Services Companies can be placed within a number of different NCCI Class Codes for purposes of Workers Compensation Insurance. NCCI stands for the National Council on Compensation Insurance. This organization is the foremost authority for state workers compensation systems when it comes to determining classification codes and recommending pure premium rates. NCCI gathers data, analyzes industry trends, provides objective insurance rate and loss cost recommendations. For most states there are around 700 different classification codes business are placed within.

Janitorial Services Companies are primarily placed within NCCI Class Code 9014. The duties of businesses that operate in this industry include keeping businesses clean by dusting, mopping, vacuuming, waxing, and even polishing floors. Some businesses have employees who empty trash, clean interior walls, as well as cleaning, sanitizing, and deodorizing restrooms. There are many aspects of this business that make it either a favorable or unfavorable business for an insurance carrier.

Janitorial Services Companies use Cleaning Supplies, Vacuum, Broom, Duster, Sponge

The easiest type of Janitorial Services company for an insurance carrier to offer workers compensation coverage to is an office cleaning company. This is because these businesses have less risky operations than businesses who clean exterior or industrial settings. Because of the lower risk for office cleaning companies, this classification code is the easiest to get insured and usually at the best rates. For this reason, most businesses attempt to operate in this part of the industry exclusively. For businesses that operate in other parts of this industry (carpet cleaning, floor waxing, power washing, window washing, etc.), there are many things those businesses need to consider in relation to workers compensation coverage. All businesses in the janitorial services industry can benefit from an increased focus on operating a safe business. Here are four things all businesses can do to show an underwriter they are focused on limiting insurance claims.

Mop, Bucket, Chores, Housework, Clean

Types of Activities Underwriters Like about a Janitorial Services Company

Some Janitorial Services Companies operate in more risky portions of the industry. Those companies must prepare for a higher rate for all forms of commercial insurance and those companies must better prepare for keeping their employees safe.  No matter the duties of the employees in this industry, it is important for the leadership of a business to implement activities underwriters like about a Janitorial Services Companies. Here are four activities that help a business get coverage and limit what the business pays for premium.

Safety Program

A Safety Program is the primary aspect a business can use to improve the results of the business. An effective safety program can limit workplace injuries, raise the morale of the staff, lower the frequency and severity of insurance claims, and increase the productivity of the business. A safety program can do this by creating a workplace culture that has employees thinking about the health and well-being of everyone involved in the business. If this is implemented effectively, it will lower the frequency and the severity of all insurance claims the business files. When the business files less workers comp claims it is because the business is experiencing less injured employees. Less injured employees means the business has created an environment that includes healthy employees. Healthy employees tend to contribute to a higher overall morale throughout the workforce. Conversely, when employees are healthy and happy, they are more likely to be more productive.

Return-to-Work Program

A Return-to-Work Program is a natural extension of a businesses safety program. It is a program most business hope they never have to use, or a program a business at least rarely uses. The best way to prepare for this is to establish a safety committee with employees from all levels of the organization. If you have an employee who has dealt with a workplace injury and the workers compensation system, it may be a wise decision to place that employee on this committee. Creating light duty activities for employees will help get them back to work quicker and give them less time to develop routines outside of their work environment. The sooner an injured employee gets back to work in any capacity, the more likely they are to eventually return to full-time permanent work.

Well-Maintained Equipment

Equipment ages and wears out over time. There is no way to avoid wear and tear on the equipment of a janitorial services company. With careful attention, maintaining equipment can get more useful life and productivity out of most equipment. For the business, this means there is less downtime and increase job site productivity. It also means less injured workers because of faulty equipment. Proper maintenance will also result in a higher resale value when the time comes to sell it.

Maintaining equipment begins with picking the right equipment in the first place and operating the used equipment in a smart, safe and efficient manner. If you require your employees to document this maintenance, it can create an atmosphere where maintenance and safety are part of the job. In addition to safety and longevity, preventative maintenance can also reduce the likelihood of theft.

Businesses that Work with OSHA

Many businesses attempt to spend as little time as possible interacting with a government agency. In some instances, this is a wise decision because interacting with a government agency can bring the eyes of regulators at many levels of the government. OSHA is one agency where this is not the case. OSHA offers many services to help a business remain safe. They will even come out to a facility upon request and give recommendation about the safety of operations. There are many ways OSHA can help a business remain safe. If a business does use any of the recommendations of OSHA, it should be documented and used when acquiring all forms of commercial insurance.

Cleanliness, Maid, Maintains, Cleaning

The Types of Activities Underwriters do not like Businesses to Partake?

Working at Heights

Anything that is done at heights (especially if it is done above ten feet in height),  makes an insurance carrier less likely to want to offer coverage to that business.  Window Washing is the primary reason an employee works at heights. Working at height causes workers compensation claims to be much more severe. When a business experiences a severe claim it sticks with their experience modification rating for a three year period. This can cause premium to be elevated for a three year period and can make it more difficult for some businesses to even get coverage offered on the open market.

Industrial Settings

Janitorial Services Companies that operate in an Industrial Setting tend to have more severe claims compared to businesses that operate primarily indoors. Especially when indoor companies operate primarily in an office setting. In many instances, businesses who operate in an industrial setting have to purchase coverage from the state’s assigned risk provider. This is because they are so risky many carriers are not willing to offer coverage to the business at all. The assigned risk provider almost exclusively offers more expensive rates compared to the open market.

Maintenance and Repair Work

NCCI Class Code 9014 allows for some maintenance and minor repair work. Most insurance carriers allow up to 10% of business be related to maintenance and repair work. Maintenance and repair work significantly raises the frequency of claims, which negatively impacts a businesses loss cost. The loss cost is the primary number an underwriter uses to determine what a business must pay for coverage.

Residential Cleaning

Residential cleaning companies operate in a less controlled environment. Most employees are driving to a third party location and are unsupervised. The fact that there is a driving risks raises both the frequency and especially the severity of insurance claims filed by these companies. Because of this elevated risk, insurance carriers are less likely to offer coverage to businesses. If those businesses are not able to find coverage on the open market, they are forced to buy coverage from the state provider. NCCI Class Code 9014 allows for residential cleaning if it is less than 50% of operations.

Commercial Insurance Needs for Retail Businesses

Retail establishments have a large amount of foot traffic compared to other businesses. This can cause a larger amount of risk to be elevated for both general liability and workers compensation claims. Because of more frequent contact between employees and the general public, employees are more likely to come down with the flu or the common cold. These days missed from work may or may not cause a workers compensation claim, but they definitely contribute to a loss of productivity. When one employee is out sick other employees have to pick up the slack for that missing employees. This may create risks in other areas of the business. Slips, Trips, and Falls are the most common problem in retail establishments.

Retail Clothing Store

Retail stores vary based on what they sell, where they are located, what other and what other services they offer. Additional risks may be taken on by businesses that offer delivery and installation of products. In some instances, these services are offered by vendors who rent space from the store. Because of the vast differences in the types of retail establishments, there are a number of different classification codes for employees working at a retail establishment. It is important to make sure all employees are classified properly.

What can Retail Owners and Operators due to save on Commercial Insurance?

Partner with an Independent Agent

When a Retail Business partners with an independent insurance agent, they are able to get multiple quotes from multiple carriers all with one phone call. This is because an independent agent partners with many carriers to find the right solution to their clients needs. A captive agent is limited to the offerings of the carrier they represent. Partnering with an independent insurance agent makes it easier to get multiple quotes from one agent and they can give you unbiased advice about both the pros and cons of each policy. They also can give you insight into the positives and negatives of doing business with each carrier. This allows the business owner to know what they are getting into with the relationship with their insurance carrier.

Shop Around your Policies

One of the best things an independent insurance agent can do for a business owner is help them shop around their policy from year to year. It is not wise to switch on the drop of a hat because of a slight drop in price, but it is smart to make sure your carrier is competitive with the marketplace. An independent insurance agent can get multiple quotes all in one place. It may be a good idea to also contact a few captive agents and maybe even another independent insurance agent. Now if you like your agent, it may be worthwhile to pay a small amount more in order to continue your relationship with them. It is equally important to shop around to make sure your agent has your best interest in mind as well as your carrier.

Safety Programs

Having a well-documented safety program in place is essential for retail stores. It should be an extensive part of the new hire training and it should be done regularly throughout the year with all employees. These do not have to be extensive training programs. They can be as short as a 15 minute conversation or even watching a workplace safety video. They should always be documented and they should occur on a regular basis. The frequency of your meetings is dependent upon your business and the workplace safety expert you consult. It is helpful to create a committee to be in charge of the workplace safety program. This is important because these employees can be supporters of the program and can garner support throughout all employees.

Store, Clothing, Shop, Bouique, Clothes

What Types of Insurance Should a Retail Business Have?

  • General Liability Insurance
  • Property Insurance
  • Inland Marine Coverage
  • Workers Compensation Insurance

General Liability Insurance

General Liability Insurance protects a business from common Slips, Trips, and Falls. These types of claims are higher in this industry because of the amount of foot traffic throughout the facility. It is important to remember that General Liability Insurance is not all encompassing. There are exclusion to every policy and every carrier has their own specifics. It is important to speak long and honestly with your agent about all the intricacies of your business in an attempt to properly insure your business.

Commercial Property Insurance

Business Property Insurance are not huge for retailers. Most facilities include some form of electrical wiring as well as heating and cooling systems. It is important to make sure the facility is in proper condition. Creating a safety committee to periodically check the status of the facility.

 Inland Marine Coverage

Inland marine insurance is designed to protect equipment that is frequently in transit or stored at a third party location. If the retail business has pop-ups at other locations, inland marine is needed to protect the equipment being used away from the location.

Workers Compensation

Retail Shops have a large amount of risks when it comes to Workers Compensation Insurance. A majority of these risks stem from the amount of exposure to foot traffic. Developing a safety program to deal with these risks and starting the training of this program from the day a person is hired, is the best way to limit the frequency and severity of claims.

Sign, Open, Open Sign, Business, Store

SIC Business Insurance Codes:

  • 5311: Department Stores
  • 5722: Appliance Stores
  • 5941: Sporting Goods Stores and Bicycle Shops
  • 5651: Family Clothing Stores
  • 5912: Drug Stores and Proprietary Stores
  • 5331: Variety Stores
  • 5399: General Merchandise Stores
  • 5932: Used Merchandise Stores

NAICS Liability Classifications:

  • 452111: Department Store
  • 452112: Discount Stores
  • 443141: Household Appliance Stores
  • 451110: Sporting Goods Stores
  • 448140: Family Clothing Stores
  • 446110: Pharmacies and Drug Stores
  • 452990: Other General Merchandise Stores
  • 442299: Home Furnishing Stores
  • 453310: Used Merchandise Stores

Business ISO General Liability:

  • 12356: Department or Discount Stores
  • 10026: Antique Stores
  • 18206: Sporting Good or Athletic Equipment Stores
  • 11127: Clothing and Apparel Stores
  • 12374: Drugstores—No Food or Beverage
  • 18911: Variety Stores
  • 11155: Coin, Stamp and Book Stores
  • 16881: Secondhand Stores

Common Workers Compensation Class Codes:

  • 8039: Retail Department Stores
  • 8044: Furniture Store and Drivers
  • 8008: Clothing and Apparel Stores
  • 8045: Retail Drug Stores
  • 8017: Stores, Retail—Not Classified Elsewhere
  • 8010: Hardware Stores
  • 8013: Jewelry Stores
  • 8046: Auto Parts and Accessories Stores