Insurance for Pool Cleaning Business: Types, Cost & More

What is Pool Cleaner Insurance?

Pool cleaner insurance is a legally binding agreement that transfers a portion of the financial losses associated with unforeseen circumstances, such as accidents and theft, to the insurer. In exchange, the pool service company pays a premium periodically.

The legally binding agreement, otherwise known as the insurance policy, lays out:

• The aggregate: The maximum amount the insurer will pay for covered losses suffered by the company (the insured) within a specific period, typically a year.

• The deductible: The initial portion of a covered loss you must pay before the insurance company starts paying. Insurance policies with high deductibles charge low premiums.

• The consideration: The current and future amount (or premium) you must pay periodically to the insurer.

• The scope: The risks and perils covered by the insurance policy.

To fully understand the role of the terms we’ve mentioned above, consider this scenario:

You have a general liability insurance policy with an aggregate of $15,000 and a deductible of $2,000. A customer then sues you for $15,000 due to injuries sustained during a slip-and-fall accident caused by a wet surface at the job site.

You will cover $2,000, while your insurer will cover the remaining $13,000. This mitigates the financial losses the incident poses to your company.

Why Do Pool Cleaning Businesses Need Insurance?

An insurance plan is a huge business expense, justified by its benefits. They include the following:

Prevents business interruptions

Pool companies may lose significant potential revenue if they stop doing business for just one day. Even worse, competitors may take advantage of the situation to poach customers.

Insurance policies help ensure you stay operational whenever a covered event, such as vandalism or a natural disaster, occurs. For example, if an insured truck is stolen or destroyed during a tornado, the insurer will provide all or part of the money needed to buy a new one. 

Offers protection from lawsuits and claims

Pool businesses sometimes face lawsuits from clients who sustain personal injury due to the company’s work or are dissatisfied with the services provided.

An insurance policy pays entirely or partially for the claim’s settlement defense costs and medical payments, so the claims don’t drain your company’s finances.

Proves credibility

Customers and business partners view a swimming pool cleaning company with insurance as credible and trustworthy. 

This trust helps convince customers to patronize your company and even refer others to you.

Protects you from employee injury claims

Work-related employee personal injuries are not uncommon. 

The construction industry reported 169,000 nonfatal occupational injuries and illnesses in 2022. Plus, over 5,000 workers suffered fatal occupational injuries that year—a number 5.7 percent higher than in 2021.

Pool service company insurance plans often cover medical expenses, legal fees, and compensation due to employee injury claims.

Covers client property damage

Heavy machinery or chemicals used for pool cleaning, installation, and repair can inadvertently damage the client’s property. You become responsible for repairing or replacing the damaged property in such instances.

Insurance plans help cover the repair and replacement costs, so you focus on delivering quality service to customers rather than worrying about distressing property damage costs.

How to get insurance for your pool services business

Here are some crucial steps for getting insurance.

• Perform a business risk assessment: The crucial first step is to assess the risks you’re exposed to. This ensures you pick a pool cleaning insurance policy with the proper liability coverage.

• Research different insurance providers: Look for insurance companies that work with pool cleaning companies. They will understand the unique risks associated with the industry. Ask fellow pool cleaning business owners and industry associations, and read online reviews.

• Compare quotes: Request quotes from different insurance providers. Compare their coverage, pricing, deductibles, aggregate, and consideration.

What Types of Insurance Do Pool Cleaning Businesses Need?

Here are some examples of small business insurance that cater to the unique insurance needs of a pool cleaning company.

1. General liability insurance

General liability insurance covers third-party (read: customers) personal injury and property damage claims caused by your company's operations. Some policies also extend to non-work-related third-party injuries sustained on your premises.

For example, let's say customers fall sick after swimming in an accidentally over-chlorinated pool. A general liability insurance policy can cover the customer's medical bills and the cost of hiring lawyers and settling the claims.

However, the policy’s coverage excludes damages and intentionally caused injuries. Examples include vandalism to the client's property by an angry employee.

Any pool service company exposed to such risks must purchase other insurance policies for complete protection.

2. Workers’ compensation insurance

Worker’s compensation insurance provides financial support to employees who sustain work-related accidents or illnesses, enabling them to recover quickly and return to work. 

It pays for the employee’s medical care costs, lost wages, disability benefits, and funeral expenses (if the employee dies from a work-related accident or illness).

Workers’ compensation sometimes includes liability insurance, which pays for the legal and settlement fees of lawsuits filed by employees, their dependents, or family members.

In most states, a work compensation insurance policy is mandatory for pool cleaning companies, with a minimum coverage amount established by law. 

To find your jurisdiction’s minimum, check your state’s Workers’ Compensation Board or NFIB’s workers’ compensation guide.

3. Commercial auto insurance

As a pool company business owner, you must ensure employees are adequately covered when using the company’s vehicles, whether driving to the customer’s location or transporting equipment and supplies. 

That’s where commercial auto insurance comes in handy.

With a commercial auto insurance policy, the insurer pays for the medical expenses and property damage from a car accident involving a company vehicle. It also covers any third party’s car repair costs and medical fees.  

Commercial auto insurance policies also protect personal vehicles used for work-related tasks. For example, if an employee gets into an accident with their car while on a supply run, your commercial auto insurance policy will cover medical fees and property damage.

Note: A commercial auto policy won’t pay for accidents involving employees without a driver’s license.

4. Commercial property insurance

This protects your company’s owned or leased buildings, tools, inventory, and equipment from loss posed by theft, vandalism, and natural disasters.

Commercial property insurance sometimes includes business interruption insurance, which reimburses you for the revenue lost when the covered property is damaged.

For example, imagine you purchase insurance for your suction cleaner. If the cleaner unexpectedly malfunctions and becomes unusable, resulting in a $500 loss, the insurance policy could reimburse you for the lost income.

Pro tip: Most commercial insurance policies exclude business property damage caused by earthquakes, war, insects, and floods. So, if you stay in an area prone to such perils, carefully review your policy to ensure the insurer includes protection for such events. You can also negotiate add-ons with your insurer.

5. Business owner’s policy

A business owner’s policy (BOP) is an insurance package that includes liability, business interruption, and property insurance. It covers financial risk from lawsuits, fire, and personal injury caused by the business’s operation.

While a BOP can offer comprehensive and cost-effective liability protection for many businesses, it only encompasses some insurance needs. Notably, a BOP excludes auto insurance, health insurance, professional liability, and workers' compensation.

Also, not every pool company is eligible for a BOP—insurers use a company’s location, size, revenue, and type of services to determine eligibility.

6. Umbrella liability insurance

Umbrella liability insurance covers third-party claims that exceed the coverage limits of your regular insurance policy. This extra layer of protection helps safeguard your company's assets, preventing you from selling them to cover hefty legal fees or satisfy legal judgments.

Imagine you’re facing a lawsuit of $300,000, but your property insurance’s primary liability limit is $150,000. An umbrella liability insurance policy will help cover the remaining amount up to the policy’s limit.

Always ensure your regular insurance’s primary liability limit—the maximum amount an insurance company will pay for an incident—equals your umbrella policy’s minimum. This ensures you're completely covered and helps you avoid out-of-pocket costs.

For example, let's say you bought a general liability insurance policy from A with a liability limit of $500,000 and an umbrella insurance policy from B with a minimum of $600,000. A client then sues you for $750,000.

Insurance provider A pays the first $500,000, leaving a balance of $250,000.

However, you must pay $100,000 to reach your umbrella policy’s minimum ($600,000) before insurance provider B can cover the balance.

7. Pollution liability insurance

Pool service companies work with chemicals like chlorine, which can cause public health issues and environmental pollution.

However, regular insurance policies exclude pollution caused by your company. That's where having a standalone pollution liability insurance policy comes in.

Pollution liability insurance covers health care costs, fines, and cleanup expenses from pollution caused by your company's operations.

Pro tip: Always ensure that any pollution liability insurance policy you purchase includes chlorine as a pollutant.

8. Professional liability insurance

Every pool cleaning technician, even the most experienced and skillful, can make mistakes. Customers can sue you when such mistakes cost them time and money. 

Also referred to as errors and omissions insurance, professional liability insurance protects you against negligence claims. 

These claims can include accidentally over-chlorinating a swimming pool, damaging a pool’s tiles, or failing to deliver and finish a pool project within a pre-agreed time frame.

Professional liability insurance pays expenses and damages from negligence claims and, occasionally, the amount it will take to redo the work.

You can purchase a standalone professional insurance policy or one bundled with a business owner's insurance policy.

9. Equipment Insurance

Equipment insurance protects pool cleaning companies from financial losses associated with theft, loss, or damage of their tools and equipment by covering their repair and replacement costs. Some policies also cover expenses for finding stolen equipment.

Equipment coverage happens in two ways: replacement cost or actual cash value (ACV).

Replacement cost pays the total amount required to replace the equipment with one of the same or similar quality.

In contrast, ACV pays the depreciated value of the equipment at the time of the loss. That is the equipment’s replacement cost at the time of the loss minus its decrease in value due to wear and tear.

Equipment policies either exist alone or are bundled with property insurance.

10. Cyber liability insurance

Pool service companies handle various types of customer data, including names, contact information, home addresses, and sometimes even gate or alarm codes. While this information is crucial for service delivery, it makes these businesses attractive targets for cybercriminals.

Cyber liability insurance covers reputational and financial losses from cyber incidents such as hacking, digital extortion, and data breaches. Plus, it pays to investigate the breach, recover the data, and clean up your company’s reputation.

Cyber liability insurance coverage includes legal fees, the cost of notifying customers of the breach, and settlement payments from any civil lawsuits.

How Much Does Pool Service Insurance Cost?

Pool cleaning service insurance can cost an average of $11 to $173 per month ($132 to $2,076 per annum), depending on the type of policy.

Take a look at the average monthly costs for the different types of pool service insurance, according to Insureon:

• General liability insurance: $67 

• BOP insurance: $76 

• Worker’s compensation: $136

• Commercial auto insurance: $173

• Umbrella insurance: $67

Other factors that determine the cost of pool service insurance plans include:

• The plan’s coverage limit: The cost of insurance plans increases with their coverage limit.

• Number of employees: Companies with high headcounts attract high insurance premiums as they have greater liability exposure.

• Payroll: Insurance premiums increase with a company’s wage bill, as premiums are calculated as a specific amount per $100 of payroll.

• Company’s location: Companies in areas with high incidences of natural disasters and theft pay more.

• Deductible: Plans with high deductibles charge lower premiums.

How Pool Cleaning Software Gives You Added Protection

Insurance is only one part of running a successful business and preventing financial liability. 

Accurate bookkeeping and automating business operations with pool service software allow you to focus on delivering quality service and protect your business from lawsuits and claims.

ServiceTitan’s Pool Service software makes it easy to keep accurate business records, track your company’s growth and inventory, and limit human errors. The tool automates every aspect of customer interaction so you can focus on other productive activities.

With ServiceTitan’s Field Service App platform, technicians can send real-time updates back to the office, which increases productivity and facilitates accurate bookkeeping. This makes it easy to access all the information required for filing claims.

Servicetitan’s Customer Experience platform allows technicians to access customers’ data and call recordings without frequently calling the office. This ensures they focus squarely on the job, which limits errors and protects your business from negligence claims.

Furthermore, using ServiceTitan's Inventory Management platform, pool service companies can streamline several vital tasks. These include: 

• Real-time inventory tracking: Ensures technicians always have the necessary materials readily available, minimizing delays and enhancing customer service.

• Purchase order management: Facilitates effortless purchase order creation, tracking, and management, reducing the risk of stockouts.

• Seamless returns and adjustments: Allows for the smooth processing of item returns and adjustments, ensuring inventory is in perfect condition.

This empowers technicians to arrive prepared, minimizing the likelihood of job-site accidents or errors due to missing, faulty, or subpar material and equipment.

Finally, ServiceTitan’s Service Scheduling software helps pool cleaning businesses plan their schedule weeks and months ahead and monitor technicians’ real-time progress. This makes it easy to communicate service dates and times to customers, reducing the risk of missed appointments.

How Do I Choose the Best Insurance Provider for Pool Cleaning Services?

The right insurance provider offers sufficient coverage tailored to your unique needs and competitive rates based on your risk profile and claims history. 

They also help to advocate for your interests in the event of a lawsuit and recommend the proper insurance policy adjustments as your company grows.

Here are some tips for picking the right insurance provider from Collen Clark, lawyer and founder at Schmidt & Clark LLP—a Washington-based law firm.

• Pick the right insurance coverage: The coverage offered by the insurance company should be comprehensive and tailored to the specific risks associated with pool cleaning. This could include coverage for equipment damage, employee injuries, environmental liabilities, and even legal fees in case of lawsuits. 

• Read the terms and conditions: To ensure that the policy meets your business needs, it’s essential to thoroughly understand the terms and conditions, including any exclusions or limitations. You can consult an insurance agent to explain them to you.

• Review the cost: While it’s essential to have adequate coverage, the premiums should be affordable and provide value for money. It’s worth comparing insurance quotes from different insurers to ensure you get the best deal. Remember that the cheapest policy may not always give adequate coverage, so it’s important to balance cost with the level of protection provided.

Also, consider purchasing bundled business insurance packages to enjoy more comprehensive protection from liability claims. For example, a BOP can be combined with other types of insurance, such as commercial property insurance, at a massive discount.

The Bottom Line

With your current information, picking an insurance plan and provider best suited for your company should be easy.

As mentioned, always read the terms and conditions before purchasing an insurance plan. A better option is to consult an insurance agent to guide you.

Consider using a software solution like ServiceTitan to limit risks, track technicians in real time, and monitor inventory levels.

ServiceTitan is a cloud-based software that helps pool cleaning companies automate their daily operations, deliver quality customer service, and grow their business. The world's top pool service contractors use ServiceTitan's tools to succeed.