You just received the frantic phone call from your employee. They finished cleaning the home on time but backed into the client’s car on the way out. You are in good company. Auto claims are a leading type of insurance claim for Professional Residential Cleaning operations year in and year out.
Often, residential cleaning businesses will look at the cost of the claim itself. And many of the claims could be considered minor, below $10,000. But that is not the total picture for your business.
Hidden Business Costs Resulting From Auto Claims:
- Re-scheduling clients due to employee not able to travel or work
- Rearranging other employee schedules
- Possible overtime due to employees being unable to travel or work
- Increase in Auto Insurance premium due to accident
- Possible Workers Compensation claim due to employee injury
- Increase in Workers Compensation premium
- Potential need to temporarily rent vehicle
- Based on nature of claim, possible loss of client or reputation
Many residential cleaning operations will utilize employees’ cars, so does that change the scenario?
In some cases, it may make it worse. Professional Residential Cleaning companies often rely on Hired/Non-Owned Auto Liability to protect the business as employees use their vehicles on behalf of the company.
However, it is a liability coverage and does not address physical damage to the employee’s vehicle. Employees can get upset if they feel the company should pay for damages. Or, if the damage is extensive the employee can lose the ability to use their vehicle. They may stop working, temporarily or even permanently. In either scenario you may be having to hire a new employee, which is expensive and difficult.
And here is the hardest part for owners to hear. Most of these claims are avoidable. In other words, they don’t have to happen.
So often in insurance, the problem has already occurred, and the conversation is about putting it back together after something has broken. But what if the problem never occurred. This may seem like magical thinking but in the world of risk management it is proven that processes change outcomes. And in many cases the processes can be simple (and free). What if you could focus on pre-habilitation instead of re-habilitation?
When claims are lower, so is the cost of insurance. Take a few minutes to review our tips for reducing auto claims and reducing your insurance premium.