Classifying Risk

General liability classifications for janitorial services

By Linda D. Ferguson, CPCU

Residential cleaning services and janitorial services that cater to businesses are experiencing growth.

A recent television commercial shows women dancing around the house gleefully sweeping and cleaning. Personally, I can never see myself dancing and smiling as I move about the house dusting and doing other cleaning chores.

Luckily, some people are good at cleaning and actually enjoy it; at least they enjoy it enough to sell their cleaning services to those of us who are not so inclined.

The growth in two-income families has squeezed family leisure time and has helped fuel a demand for residential cleaning services. Janitorial services that cater to businesses also are experiencing growth, as companies choose to trim payroll by reducing their janitorial force and outsourcing that function.

For general liability purposes, ISO uses the same code to apply to both commercial and personal janitorial services.

96816 Janitorial Services

The footnote for this code does not describe what a janitorial service is. The Premium Audit Advisory Service states that the contemplated operations include not only janitorial services but also building maintenance and ordinary repair of the building.

The footnote does mention several janitorial-related activities that can be drawn into the classification: window cleaning, painting, maintenance and repair. However, the exposures that fall within these classes can be included under 96816 only when they are accompanied by regular janitorial services performed at the same location.

For example, a business starts out doing general janitorial services, including occasional window cleaning. After a while, the janitorial service begins specializing in window cleaning for certain customers who wish to have only that service performed. All customer locations where only window cleaning is performed need to be classified as 99975 Window Cleaning.

For painting activities that fall under janitorial services, similar classification rules would apply. Once only painting is being conducted at a location, a new classification would be introduced, most likely 98305 Painting - interior - buildings or structures.

Various other activities, if performed as part of a range of janitorial functions at a location, could still be classified as janitorial; but once they are being performed without the janitorial services at a location, they should be classified individually. These would include:

• 91405 Carpet, Rug, Furniture or Upholstery Cleaning - on customers’ premises

• 91341 Carpentry - interior

• 91481 Chimney Cleaning

• 92451 Electrical Apparatus - installation, servicing or repair

• 92478 Electrical Work - within buildings

• 94590 Floor Waxing

• 98482 Plumbing - commercial and industrial

• 98483 Plumbing - residential or domestic

It would not be anticipated that janitorial contractors would re-wire a building, but they might be expected to change a fuse, help with light bulbs and fixtures, and similar minor tasks. Likewise, the plumbing operations could be clearing pipes of clogs and other simple operations.

Floor waxing or carpet cleaning are perhaps more likely to become specialties of a janitorial service, at which time the appropriate specialty classification is to be used and the appropriate payroll separated out.

Businesses change over time and this is particularly evident in the service industry. A janitorial service company may evolve into a floor-wax-only company and a floor-wax company may branch out and become a janitorial service company. Regularly reviewing the operations of an insured is important to make sure that the classifications on the policy reflect what the insured does today. *

The author
Linda D. Ferguson, CPCU, has 30 years of underwriting experience with national commercial lines carriers. She is vice president of Technical and Educational Products at The Rough Notes Company, Inc.