Janitorial bonds fall under the category of fidelity bonds. In many states if you manage a commercial or residential cleaning business and have in excess of five employees, you are required by law to have a bond agreement in place to be able to legally operate your venture. You should find out from your local government what the minimum requirements are before shopping for a bond.
A bond is financial agreement that you enter into that helps to offer a guarantee of good service to your clients, with a promise of financial support should your employees act unlawfully. The agreement is made between your companies, known on the bond paperwork as the principal, the issuer, called the surety and your local government agency, known as the obligee.
There will be many contractual terms that your business will have to meet to be able to keep the bond policy from having claims made against it, some of which will be local or state laws in regards to safety and good practises, others may be specialty clauses added by your surety.
Fidelity bonds are to protect your clients from the wrongdoing of your employees. The surety company will only protect your clients from wilful acts such as theft, not from accidental damages to their property. You will need to have public liability insurance cover for accidental damages to property that does not belong to your business.
The policy works by allowing a client to lodge a claim against your bond should they believe that one of your employees has stolen an item from their possession. The company that is responsible for your bond will then investigate the claim for authenticity before advising you about what you need to do.
The bond will only pay out to a client if the employee is convicted of the theft in court. Once the financial damages have been paid and all legal costs covered, the surety will come back to you as the company owner to reclaim the money that your bond policy paid out for your business in living up to their end of the contract.
You can also get Janitorial performance bonds. These are not required by law, but are rather used to ensure that cleaning businesses live up to the expectations that they have agreed to on a private contract without causing financial insecurity for the other parties concerned.
If you have never had to have a bond before and you are unsure about any of the terms and conditions that are specified your surety will be happy to answer any questions. You should also check with the government agency that you need to lodge the agreement with that it lives up to all industry standards before signing the policy. If you are still not sure if the policy is right for you, you may wish to have a lawyer or similar independent third party professional look at the contract for you to ensure that you are getting the right cover to suit your needs as well as meet all legal requirements.