Entrusting employees with access to homes and offices creates a risk that’s easy to overlook — until something goes missing. Many cleaning companies turn to crime insurance or bonding coverage to reduce that risk. But not all policies pay when something goes wrong, especially if you don’t meet certain conditions upfront. Before purchasing or renewing cleaning business bonds, take a closer look at these five key considerations.
1. Run Background Checks Properly
Thorough screening is often a condition of coverage for cleaning business bonds, but not all background checks are created equal. Some insurers expect national or multi-state checks, not just local criminal reports. If your employees have lived or worked in other states, state-only searches may leave gaps.
It’s also important to comply with local hiring laws, which may limit when and how you can use conviction records. For example, California’s laws restrict how employers use arrest and conviction history during the hiring process.
If you’re unsure whether your current hiring process meets policy requirements, start with a review. Our resource on background check best practices for cleaning companies offers a good starting point.
2. Clarify What Counts as a Dishonest Act
Insurers don’t always define employee theft the same way you do. Some include a wide range of dishonest acts — from cash theft and check fraud to misuse of client keys — while others use vague language or provide no definition at all. If your policy doesn’t clearly define dishonest conduct, it may be difficult to collect when losses occur.
To avoid ambiguity, review your policy’s definitions and exclusions carefully. If the language isn’t clear, ask for clarification before a claim ever arises.
3. Know Whether a Conviction Is Required
Some policies only pay out if the employee responsible for the loss is criminally convicted. That sounds straightforward, until you consider how few theft cases result in conviction, especially in situations where clients prefer not to involve law enforcement. If your policy includes a conviction clause, you may have little recourse even if the theft is well-documented.
This clause is often buried in the fine print, so it’s worth confirming whether it applies before choosing a provider. Law Insider explains how this clause is defined in legal agreements.
4. Understand What Happens If You Accuse an Employee
Filing a claim typically requires naming the employee involved, but doing so can affect that person’s future eligibility under the policy. In some cases, insurers may permanently exclude that employee from coverage, regardless of whether the accusation leads to formal charges.
Timing and documentation are especially important. Speak with your insurance advisor before submitting a proof of loss form to ensure your actions don’t unintentionally violate policy terms.
5. Check for Contract Requirements
Many commercial clients require service providers to carry an insurance bond for cleaning business services, especially when working in high-value or sensitive environments. But policy conditions often state that claims are only payable if there’s a written contract in place between you and the client. If your service agreement isn’t current or doesn’t contain the required language, you may not be able to file a claim even if all other conditions are met.
If your cleaning business operates under franchise agreements or national facility contracts, review your obligations carefully. Clear policy language and proper documentation become essential in these situations.
Looking for Cleaning Business Bonds or Crime Insurance?
Cleaning businesses face real exposure to employee theft, and bonding or crime insurance can play an important role in risk management. But these policies only work when they’re structured correctly. From background checks to contract terms, the fine print matters more than many business owners realize.
Talk to a Moody Clean Insurance advisor about bonding or crime insurance for cleaning business operations and how to tailor coverage to your risk profile and client base.
About Moody Clean Insurance
One relationship with a cleaning franchisor started it all. Over the next 20 years, that one relationship has expanded and multiplied. Moody is now one of the largest providers of insurance and cleaning business bonds to independent and franchise cleaning businesses throughout the country. Relationships start with a conversation, so let’s talk. We look forward to learning about your operations and sharing what we’ve learned through decades of protecting cleaning businesses like yours.
