Getting Bonded for a Cleaning Business

Bond Your Cleaning Business

When starting your cleaning business, you can increase your marketability by obtaining a bond. A bond provides financial guarantees to your clients that the cleaning services will be done per the contract. It doesn't cover damages or injury as its not insurance. Instead it gives assurances that the work will be done as indicated in the contract. There are several types of bonds including performance (work will be done satisfactorily), license (required by some states), bid (you'll do the work if you win the bid), indemnity (reimburse for loss if you fail to perform or don't pay contractors used in the work), and payment (promise to pay all subcontractors needed to do the work).

Instructions

1. Research bond companies. Check your local yellow pages or go online to find bond companies that fit your needs. Check that the company is on the list of the Department of the Treasury's approved surety companies fms.treas.gov/c570/c570_a-z.html.

2. Compare rates and services from various companies. Most rates for cleaning companies will run about 1 to 3 percent of your bond request. Also, find out how fast the turnaround is when a file is submitted. This can be hard to determine, but your agent should be able to let you know how fast things can move based on your area.

3. Apply for the bond. Provide all the necessary information and the annual premium payment. Once the contract is signed and payment is made, you'll be bonded.

References

• Entrepreneur Magazine: Bonding
• J.W. Surety: Surety Bonds 101