What Is a Janitorial Bond and Do You Need One?

How a janitorial bond works, and where it falls short

Three parties sign on to a bond. The cleaning company is the principal, the bonding company is the surety, and the client is the party the bond protects. If an employee of the cleaning company steals from the client and the loss is established under the bond's terms, the surety pays the client up to the bond amount.

The catch is in those terms. Many janitorial service bonds require the employee to be identified and convicted before they pay, which can take months or never happen. The bond amount is often modest. And because a surety lends its credit rather than absorbing risk, it will look to the cleaning company to pay it back.

Fidelity bond or third-party crime insurance

For theft protection, the question is usually not whether a vendor is bonded but which instrument stands behind the word. A third-party crime policy, sometimes called client coverage or an employee theft of client property extension, is true insurance written to cover a client's losses.

Performance and bid bonds for large contracts

A performance bond answers a different risk: that the contractor walks away or fails to deliver the contract. If the contractor defaults, the surety may arrange completion, pay toward a replacement, or pay the owner up to the bond amount, depending on the bond form. Public agencies often require one on multi-year custodial contracts, and some private owners do for very large sites, where a sudden vendor failure would leave hundreds of thousands of square feet unserviced.

A bid bond comes earlier. It secures the promise that a bidder will sign the contract at the price it bid. Both bonds cost the contractor a premium, which is built into the price you pay, so require them where the risk justifies the cost rather than by habit.

When to require each type

Match the instrument to the exposure. The list below covers the common cases.

• Cash handling, retail stock, lab equipment or executive offices: third-party crime coverage with you named on it
• Small office with little of value on site: a fidelity bond may satisfy policy, but check its conviction terms
• Public agency or multi-year custodial contract: performance bond, plus a bid bond if your procurement rules call for one
• Large single-site contract where replacement would be slow: consider a performance bond
• Any site: background checks, key control and supervision, which prevent the loss the bond only repays

What to ask a bonded cleaning company

When a proposal says bonded, ask for the bond itself or a letter from the surety. The answers to these questions tell you whether the word means anything for your building.

• Is this a janitorial service (third-party fidelity) bond, a performance bond or a license bond?
• Who is the surety, and is it admitted in California?
• What is the bond amount, and is it per loss or in total for the term?
• Does a claim require an employee conviction?
• Does the company also carry third-party crime coverage, and can we be named on it?

Bond requirements in an EBS proposal

EBS team members are background-checked, trained and uniformed, and the company works in high-security and access-controlled facilities where confidentiality, key procedures and accountability are part of daily routine. If your contract calls for a fidelity bond, crime coverage or a performance bond, state the type and amount in the RFP or raise it at the walkthrough, so every bidder, EBS included, prices the identical requirement.