Most cleaning business owners focus on finding clients, buying supplies, and building a great team (go you!). But legal gaps? They get overlooked until something goes sideways. Let’s fix that before it turns into a five-alarm mess.
Real talk: Around 36% to 53% of small businesses face legal action every year.* It’s not always about doing something wrong — sometimes it’s just about not being protected.
*Reference: High Swartz Attorneys at Law
You’re Operating Without a Signed Service Agreement
- The risk: Verbal agreements are like glitter — hard to track, and they get everywhere. Without a written agreement, you have no proof if a client says, “That’s not what we agreed to.”
- Scenario: A cleaner did the job, but the client refused to pay, claiming no quote was ever discussed.
- The fix: Always get it in writing. Your service contract doesn’t need to be complicated, just clear. At a minimum, include:
- Scope of work (What you’ll clean and how often)
- Payment terms (When and how you get paid)
- Damage waivers (What happens if something breaks)
- Cancellation policy (How much notice is needed)
Pro Tip: What should be in a cleaning service contract? A great contract protects both you and your client. Here are the must-haves:
- Start and end date
- List of cleaning tasks
- Payment schedule
- Policies for late payments or cancellations
- Signatures from both sides
You Don’t Have Proper Insurance Coverage
- Problem: One slip. One fall. One broken vase. If you’re not insured, your wallet could take the hit.
- Scenario: An employee slipped on an icy driveway. No workers compensation coverage meant the business had to pay over $10,000 in medical bills out of pocket.
- The fix: Carry the right cleaning business insurance for your business. In most cases, you’ll need:
| Coverage Type | What It Covers |
|---|---|
|
Property damage and third-party injuries |
|
|
Employee injuries on the job |
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Employee theft or dishonesty |
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Damage or theft of cleaning gear |
Insurance needs vary by business and location. Always review coverage carefully.
Note: Want more details? Find out what kind of insurance a cleaning company needs.
You’re Misclassifying Workers as Contractors
- Problem: The Internal Revenue Service (IRS) and state agencies are cracking down. Calling someone a contractor when they’re legally an employee can lead to major fines.
- Scenario: A cleaning business was fined $12,000 after the IRS ruled their four “contractors” were actually employees.
- The fix: Use the IRS’s 3-part test:
| Category | What It Means |
|---|---|
|
Behavioral |
Do you control how they do the work? |
|
Financial |
Do you control how they’re paid or supply tools? |
|
Relationship |
Are they permanent or short-term help? |
Rule of Thumb: If you control their schedule or provide cleaning supplies, they’re likely employees.
You Don’t Use Damage Waivers or Liability Clauses
- Problem: Even superheroes knock over a vase sometimes. Without clear contract language, you could be stuck paying for damage.
- Scenario: A cleaner accidentally cracked an antique mirror. The client sued and left a one-star review. Goodbye, referrals.
- The fix: Protect yourself in writing. Every agreement should include:
- Liability limits (How much you’ll cover)
- Exclusions (Items you won’t touch, like antiques or electronics)
- Client sign-off before cleaning begins
Bonus: A well-written clause makes you look professional and sets clear expectations from the start.
You Haven’t Checked Local Licensing or Safety Laws
- Problem: You could be doing everything right and still get hit with a fine if you’re not following local rules.
- Scenario: A cleaning company was fined $2,500 for operating without a business license and not having a safety binder on site.
- The fix:
- Look up your city or state’s business license requirements
- Create a basic Occupational Safety and Health Administration (OSHA) training for staff
- Keep safety data sheets (SDS) for all cleaning products on file
Pro Tip:Check out this cleaning business legal checklist to stay ahead of red flags with this quick checklist – print it, hang it in the office, or download it for later:
- Create legally binding contracts
- Classify workers properly
- Review insurance policies annually
- Conduct safety training
- Stay updated on licensing laws
Protect Your Cleaning Business Today
Legal problems don’t wait. They cost money, damage reputations, and sometimes even shut businesses down. But here’s the good news: most of these issues are preventable.
Just one fix from this list could save you thousands (and a whole lot of stress). You built something worth protecting. Let’s keep it that way.
FAQs About Cleaning Business Legal Requirements
What kind of insurance is legally required to run a cleaning business?
Requirements vary by state, but many cleaning businesses need general liability and workers compensation. Bonding may also be required for government or commercial contracts.
Do I really need a contract for every client?
Yes. A cleaning contract protects your time, your money, and your reputation. It sets expectations on both sides and gives you legal backing if there’s ever a dispute.
What happens if I don’t get a local cleaning license?
You could face fines, penalties, or be forced to shut down. Always check with your city or county before taking on new clients.
