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Employment practices liability for cleaning companies
Employment practices liability insurance (EPLI) pays to defend your cleaning company, and may pay a settlement or judgment, when a current, former or prospective employee claims harassment, discrimination, retaliation or wrongful termination. Because your crews work inside clients' buildings, many owners also add third-party coverage for claims brought by a client's staff or tenants.
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What employment practices liability insurance covers for cleaning companies
Employment practices liability insurance answers claims that your company mistreated someone who worked for you or applied to. The usual allegations are harassment, discrimination, retaliation and wrongful termination. A policy typically pays for your defense and, depending on its terms, a settlement or judgment.
Two features shape how EPLI behaves:
- It's usually claims-made. Coverage is tied to the date someone first brings a claim against you, not the date of the firing or the comment. If you change carriers, ask how the new policy treats events from before it started.
- Defense costs usually reduce the limit. Every dollar spent on lawyers comes off the amount left for a settlement, so a $250,000 limit can shrink fast in a contested case.
Why janitorial work draws these claims
Night shifts, isolated buildings and supervisors who control schedules create the conditions for harassment complaints. The EEOC has brought or settled several sexual-harassment cases against janitorial employers, many of them involving supervisors. In one, a supervisor assaulted a housekeeper while she cleaned a store restroom. In another, the agency said working the isolated night shift added to the janitors' vulnerability.
Turnover adds to it. A company that hires and lets go of dozens of people a year makes dozens of employment decisions, and each one can turn into a dispute. Language gaps between supervisors and crews can make it harder to spot a problem early or to show that a complaint was handled. Written policies help. Underwriters and clients often ask whether you have a harassment policy, a complaint procedure and training records.
Third-party EPLI: claims from outside your payroll
Many EPLI policies offer a separate insuring agreement for claims by people who don't work for you, such as clients, tenants and vendors. That's the tenant who says your porter harassed her, or the client's office manager who says your supervisor treated her unfairly because of her religion. It matters because general liability policies typically exclude harassment and discrimination. Without third-party coverage, that claim may have nowhere to go.
| What EPLI may cover | What it usually doesn't |
|---|---|
| A cleaner's harassment claim against a supervisor | Unpaid overtime, off-the-clock work and missed-break claims |
| Discrimination in hiring, scheduling, pay decisions or firing | Back wages, even under a defense-only wage endorsement |
| Retaliation after an employee complains | Claims that 1099 cleaners should have been paid as employees |
| Wrongful termination | Claims by a client's employees or tenants, unless third-party coverage is added |
| Defense costs, which usually come out of the limit | Injuries on the job, which belong to workers' comp |
EPLI claims a cleaning company could face
These are made-up examples. The details are typical of the industry, but the people and companies aren't real.
Example scenario: a complaint from the client's front desk
During tax season, a receptionist at an accounting firm works late most nights. She tells the firm's partners that your evening porter has made repeated comments about her appearance. The firm asks you to pull him from the account, and a month later her lawyer sends a demand letter naming your company. Your general liability policy will likely point to its harassment exclusion. A third-party EPLI agreement is built for this kind of claim.
Example scenario: fewer hours after a complaint
A night cleaner at a distribution center's offices reports her route supervisor for unwanted touching. Two weeks later, her schedule drops from 30 hours a week to 12. She files a charge with the EEOC alleging harassment and retaliation. EPLI may pay for your defense from the charge stage onward, depending on how the policy defines a claim.
Example scenario: the drive between buildings
Eight crew members on split shifts clean three buildings a night. They say the drive time between buildings was never paid and hire a lawyer together. That's a wage-and-hour claim. Most EPLI policies exclude it, and a defense-only endorsement, if you bought one, won't pay the wages owed.
What shapes the price of EPLI
We haven't found reliable published EPLI prices for cleaning companies, so we price it from your application. Carriers usually look at how many employees you have, how many you hired and let go last year, any past charges or lawsuits, and whether you have written policies and a way for workers to report problems. The limit, the retention you choose and whether you add third-party coverage move the number too.
Your price depends on the payroll in each class code, your annual sales, the kinds of buildings you clean, how much specialty and chemical work you do, the vehicles your crews drive, your claims history and the limits your contracts require.
Which cleaning companies need EPLI most
There's no headcount at which EPLI switches on, but the exposure climbs once other people make hiring, scheduling and firing calls for you. It tends to matter most for:
- companies with route supervisors over night crews, especially in multi-tenant office buildings
- crews working near client staff all day, such as day porters in medical offices and clinics
- contractors in schools and campuses, where screening and conduct rules are written into contracts
- crews in plants and warehouses on mixed shifts; see industrial cleaning insurance
- franchise owners who hire their own crews; see cleaning franchise insurance and check whether your franchise agreement lists EPLI
If you're adding your first supervisor layer, it's a good time to request an EPLI quote along with your other renewals.
State notes on employment claims
A few states in our footprint have janitorial-specific rules that affect training, wages or crew changes:
- California: under the Property Service Workers Protection Act, janitorial employers register with the Labor Commissioner every year and provide in-person sexual violence and harassment prevention training at least once every two years to janitors and their supervisors. Nonsupervisory workers must be trained by a peer trainer from a qualified organization. The Labor Commissioner's janitorial employer page has the details. See California.
- New York: in New York City, when a building service contract changes hands, covered successors must keep the existing workers for a 90-day transition period and can't discharge them without cause. See New York.
- Illinois: Chicago's Fair Workweek Ordinance names building services as a covered industry for employers with at least 100 employees globally, covering workers who earn up to $33.85 an hour or $64,945.55 a year, with advance-schedule and predictability-pay rules. Those are wage claims, which EPLI usually won't pay. See Illinois.
- New Jersey and Connecticut: state building-service contracts carry prevailing or standard wage rates for cleaners. See New Jersey and Connecticut.
Related coverage
EPLI questions from cleaning company owners
Does general liability cover a harassment claim against my cleaning company?
Does EPLI cover unpaid overtime claims from my cleaners?
Do I need EPLI if all my cleaners are part-time?
What harassment training do California janitorial companies have to provide?
Will EPLI pay if a fired cleaner files an EEOC charge?
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