From public liability to workers’ compensation, the cost of cover is climbing fast, creating serious financial strain for businesses in the sector. The result? Thinner margins, tougher operating conditions and, in some cases, difficult decisions about service levels, staffing and growth.
Insurance costs are climbing across many industries, but cleaning businesses are feeling the sharpest blow. Often labelled ‘high-risk’ by insurers, they face mounting premiums due to the nature of the work, frequent claims and growing legal exposure from slip and fall incidents.
A hard market turns harder
The cleaning industry isn’t alone in feeling the pinch. The insurance market has been considered ‘hard’ since 2018, characterised by high premiums and tighter underwriting standards. However, sector-specific conditions are now turning up the heat.
Industry insiders point to several contributing factors: inflation in claims settlements, rising medical costs linked to workplace injury, higher frequency of litigation and increased scrutiny on compliance in a post-COVID landscape. The growing cost of materials and labour has also increased the value of claims, making every incident more expensive to resolve. For insurers, this adds pressure to either recoup losses or reduce exposure, and cleaning is often the first to feel the fallout.
In Australia, the shift to a national workers’ compensation scheme is also creating new complexities around premiums and claims management. Small businesses say the lack of consistency across state systems has made it harder to plan, while brokers are warning that ongoing reform may push premiums higher before the system settles.
The high cost of risk
For cleaning companies, the financial impact is being felt across the board, from large national firms to niche operators working in healthcare, aged care and retail. In some cases, insurance costs have doubled or even tripled in just a few years.
Public liability and workers’ comp are the biggest pain points. According to industry brokers, insurers are now applying more exclusions, increasing excesses and demanding more documentation, everything from chemical safety protocols to staff induction records.
Much of the pressure stems from slip and fall claims, which remain a major driver of risk. “Slip and fall incidents continue to be a significant factor in insurance claims within the commercial cleaning sector,” says Australian Slip Testing managing director Ben Yarham. “This is rarely about negligence; more often, it reflects the challenges involved in maintaining safe floor conditions across diverse environments.”
According to Logic Business Resources CEO Lorraine Rogic, compliance documentation is one of the most underestimated risk factors. “Proper documentation isn’t just a compliance tool, it’s your defence when a claim is made. Without it, businesses are incredibly vulnerable,” she says.
Knock-on effects and hidden risks
Higher premiums are reshaping business models, with some cleaning companies absorbing the cost while others are passing it onto clients. A few are cutting corners in ways that raise further risk, such as reducing training hours and delaying equipment upgrades.
“There’s a major gap I come across far too often, and that’s the lack of communication, consultation, internal training and verification of competencies,” Rogic says. “Despite regulatory awareness, many cleaning businesses still take a reactive approach to safety and issues are only addressed after incidents occur.”
There’s also growing concern that some operators are going uninsured altogether or taking out minimal cover to meet tender requirements without adequate protection.
For facility managers, building owners and procurement teams, this raises serious questions. An underinsured contractor could expose them to liability if something goes wrong. It also muddies the playing field, as responsible operators who maintain full cover are being priced out of contracts.
Strategies for survival
Despite the challenges, experts say there are steps businesses can take to reduce their exposure and their premiums. The first is to treat insurance as a risk management partnership, not just a transaction. That’s where independent, accredited slip resistance testing is gaining traction.
“We’ve noticed growing demand for slip resistance testing from both cleaning companies and their clients, which reflects an increasing focus on safety regulations and managing liability risks,” Yarham explains. “This demand is especially strong in high-traffic areas like shopping centres, commercial buildings and airports, where regular testing helps demonstrate compliance and meet insurance requirements.”
Underwriters are placing growing value on objective evidence of compliance, especially when it comes from trusted providers.
“NATA-accredited slip resistance test reports play an important role in insurance assessments and claims investigations,” Yarham says. “They allow insurers to assess whether a property complies with Australian Standards and can directly impact decisions around premium pricing and coverage eligibility.”
He says regular testing, backed by professional reporting, demonstrates due diligence and can reduce liability exposure.
“In the event of a claim, accredited reports carry significant weight in legal proceedings by offering credible, unbiased evidence that unaccredited reports lack,” he adds.
Rogic says the rise in workers’ compensation costs is another major concern. “Cleaning companies with poor safety records may see their workers’ compensation premiums rise by as much as 50 percent over time,” she warns. “The most common WHS breaches I come across are failures to conduct site-specific risk assessments, non-compliance with manual handling procedures, and inadequate or missing Safe Work Method Statements.”
Closing the compliance gap
According to Yarham, one of the biggest gaps in compliance is not negligence, but inconsistency. “Without ongoing assessments, changes in surface conditions due to wear, contamination or cleaning variations can be difficult to track,” he says. “Another issue is impartiality. When testing is carried out by the cleaning company itself, there can be concerns about objectivity. That’s why we’re seeing an industry-wide shift toward using independent, NATA-accredited providers.”
But testing is only part of the solution. Yarham stresses the importance of aligning cleaning practices with testing cycles to maximise safety outcomes.
“Where possible, it’s beneficial to schedule testing shortly after treatments like a strip and seal or after a deep clean. That way, results reflect the surface in its optimal condition,” he says. “A good testing provider will usually coordinate with building managers ahead of time to prioritise specific areas.”
As for the tests themselves, Yarham says two in-situ methods are typically used: wet pendulum testing and dry floor friction testing.
“The wet pendulum method is suited for wet areas like amenities and walkways, while dry floor friction testing is used for smooth, dry surfaces such as foyers or back-of-house zones,” he explains. “Often, both are used together to give a complete picture of surface safety.”
One standard, many interpretations
While Australian Standards remain the benchmark, Yarham says insurance requirements are not one-size-fits-all.
“Insurance requirements can differ from one provider to the next, so it’s always worth clarifying expectations with your insurer or a qualified advisor,” he says.
Slip resistance needs also vary based on the building type and use.
“Amenities in shopping centres or aged care facilities carry a higher slip resistance rating than hotel apartments, for example. These variations reflect the need to tailor cleaning and safety practices to each environment.”
Rogic adds that psychological risk is a growing factor in both compliance and claims. “We’re seeing a significant increase in psychological injury claims across the cleaning industry, reflecting broader societal trends and the psychological toll of high-pressure cleaning roles,” she says.
What next?
There’s no silver bullet for insurance pain. But as premiums rise and risk exposure grows, the cleaning industry is being forced to adapt, and fast. Insurers are watching closely as regulators tighten standards and clients are asking tougher questions.
For now, the best defence is a clear, auditable story about how your business manages risk. Because when insurance becomes a battleground, proof is power. And that proof starts from the ground up.
This article originally appeared in the Inclean magazine print edition. Order your free copy here.
