[MANSFIELDGM]

I Have ran a cleaning business for 6 years and have paid insurance that keeps going up and now I need to know if I have been paying for insurance that I didn't need. I can get bonded for a lot less money. My question is what kind of insurance do I need to carry?

[GoldieMae]

You need to carry two different kinds of insurance if you want to be protected: Commercial General Liability and possibly Pollution Liability. You can get CGL coverage with a pollution rider if you don't want two policies.

There are many ways to reduce insurance costs. You can increase your deductible, have a self insured retention, etc. Have you discussed it with your insurance broker?

I know it seems a waste of money, but the whole purpose of insurance is to provide funds if something unexpected happens. If you decide to become uninsured, and something happens, you could very well lose your business by having to pay lawyers fees, damages and the like.

[HBF]

I Have ran a cleaning business for 6 years and have paid insurance that keeps going up and now I need to know if I have been paying for insurance that I didnt need. I can get bonded for a lot less money. My question is what kind of insurance do I need to carry?

You need general liability insurance. I have never heard of pollution liability. That may be a state requirement, so check to see if you need it.

It is always a good idea to get quotes every year to be sure you are still getting competitive rates. Just be sure to never give your social security number until you are ready to buy. That will hurt your credit score. Just tell them truthfully your credit rating and if you have had any claims in the last 5 years.

Generally, depending on the amount of coverage you need or want, it should run you around $500/year.

Good luck,
Stacy

[GoldieMae]

A good 8 to 9 hours of my day is spent dealing with insurance policies, primarily CGL and pollution policies, and the litigation that results from construction, environmental pollution, and toxic tort claims. Pollution liability coverage has been around for several years, is not a state requirement, but it is pretty much a necessary element of operating a dry cleaning business. A dry cleaning business is particularly vulnerable to pollution claims because of the chemicals used and the disposal thereof. If you have a spill, the state and federal governments will require clean-up, and there is a good chance of being sued by neighboring businesses. And we are potentially talking millions, not thousands, of dollars. Unfortunately, this is one of the reasons it is so expensive to run a dry cleaning business.

Commercial General Liability insurance excludes pollution claims almost as a matter of course, and it is advisable that you obtain this type of coverage, either through a separate policy or by having the pollution exclusion removed from your GL policy. A broker can negotiate on your behalf with an insurance company to make this happen for you.

I'm not really sure why your social security number would be relevant because underwriting insurance policies to a business is focused on claims and not your personal credit rating. I'm pretty sure your business has a tax ID number, and that you are one step removed from liability. That is a fairly easy process and not expensive. And the premiums for a business are not as low as the PP stated, as I am sure you are well aware. If you are only paying $500/year, you do not have sufficient insurance coverage. For a personal umbrella policy the premiums are very low, and I recommend you carry a personal umbrella policy in case you are sued in your personal capacity (to protect you and your family's personal assets), but your business's insurance is an entirely different animal. A personal umbrella policy will not cover a lawsuit against a business.

[HBF]

Oh, I didn't know she was talking about dry cleaning. I thought she was talking about general cleaning in homes or offices.

I believe the insurance company uses your social to look up past claims. Without it, they will not know if you have filed any claims. Anytime I get a quote they ask for my ss# and I always say no until I am ready to buy. Any inquiry on your credit report lowers your score.