MERRY MAIDS

The Merry Maids franchise agreement requires general liability insurance on an occurrence form at $1,000,000 each occurrence, with $500,000 each person for bodily injury and $500,000 for personal and advertising injury, including product liability.

The named insured on your certificate is your own legal business entity — the LLC or corporation you operate through. Merry Maids SPE LLC is the franchisor. The agreement requires you to name Merry Maids SPE LLC and its parents, partners, affiliates, subsidiaries, successors, and assigns as additional insured, with a waiver of subrogation in their favor.

That satisfies your franchisor. Here is where the requirement ends and your real exposure as a residential cleaning operator begins.

The franchisor entity is Merry Maids SPE LLC, a ServiceMaster Brands company. The 2025 franchise agreement (Section 13.B) requires you to name Merry Maids SPE LLC and its related parties as additional insured, with a waiver of subrogation. A waiver of subrogation is a promise from your insurer not to pursue those parties to recover money after it pays a claim.

What the agreement requires you to carry:

General Liability at $1,000,000 each occurrence, $500,000 each person for bodily injury, and $500,000 personal and advertising injury, including product liability, on an occurrence form. The occurrence form covers claims based on when the harm happened, not when the claim is filed. The policy must be primary and non-contributory your policy pays first.

Business Auto Liability at $1,000,000 each person and $1,000,000 each occurrence for bodily injury, plus $100,000 property damage, covering owned, hired, and non-owned vehicles — including the personal cars your cleaners drive between homes.

Workers' Compensation at the limits your state requires, plus Employers Liability at a $500,000 minimum (state statute controls if it requires more). Workers' compensation pays medical bills and lost wages for an injured employee. Employers liability covers lawsuits outside that no-fault system.

Employment Practices Liability (EPLI) at $250,000. EPLI covers claims by employees for things like wrongful termination, discrimination, or harassment. The agreement allows an alternative structure a $100,000 sublimit added to your general liability but the standalone $250,000 policy is the stronger choice for a high-turnover workforce.

Third-Party Crime Bond at $25,000. This is the coverage behind the word "bonded." It pays when an employee steals from a customer. The agreement requires it; the $25,000 limit is the floor, not a number sized to the exposure.

All policies must give the franchisor 30 days written notice before cancellation or material change. The agreement also strongly recommends but does not require care, custody, and control insurance at $150,000, which covers damage to a client's property while it is in your cleaners' hands.

This is the exposure that defines residential cleaning, and it is the one most franchisees misunderstand.

Your general liability policy will not pay for employee theft. General liability covers accidents — property damage and bodily injury your operations cause. Theft by your own employee is dishonesty, not an accident, and the standard policy excludes it. So when a client says a cleaner took a watch, general liability is not the answer.

The answer is the third-party crime bond — sometimes called an employee dishonesty bond or janitorial bond. It pays when your employee steals from a customer. The Merry Maids agreement requires it, which is good. The problem is the amount: $25,000. One accusation involving jewelry, a watch collection, or cash can exceed that in a single home.

There is a second trap in how a bond pays. Many bonds pay only after the theft is proven — a conviction or an admission — and require you to reimburse the bond. A "she said, he said" accusation with no proof, which is the most common form this claim takes, can leave you with a furious client, a damaged reputation, and a bond that has not paid anything. Your brand markets cleaners as bonded. Make sure the bond behind that word is large enough, and structured to respond to the claims you will actually see.

When you move from a bond to a third-party crime policy, ask for one detail by name: the Loss Discovered form. Crime policies come two ways. A loss-sustained form covers a theft only if it both happened and was found during the same policy period. A loss-discovered form covers a theft that is *found* during the policy period no matter when it started. That difference matters, because employee theft is usually a quiet pattern noticed long after it began. Picture a cleaner skimming small amounts of cash from a recurring client over eight months, noticed only at tax time. A loss-discovered policy responds when the pattern surfaces. A loss-sustained policy bought after a mid-year carrier switch could deny the months that fell under the old policy. For a cleaning business, loss discovered is the form to insist on.

Cleaning means handling a customer's belongings — moving a vase to dust the shelf, wiping a flat-screen, cleaning around fragile décor. Sometimes something breaks. Whether you are covered depends on a distinction most franchisees never hear about.

General liability covers damage to a customer's property in general — but standard policies contain a care, custody, and control exclusion. That exclusion removes coverage for property that was in your control or that you were working on when it was damaged. A vase your cleaner was holding when it slipped is exactly that kind of property. So the very items your cleaners handle most are the ones the standard policy is most likely to exclude.

The coverage written for this is care, custody, and control insurance, sometimes packaged as bailee coverage. It covers damage to a client's property while it is in your cleaners' hands. The Merry Maids FDD strongly recommends it at $150,000 but does not require it — which means many franchisees skip it and discover the gap only when a client's antique or electronics claim is denied. For a business whose whole job is touching a customer's things, this is not an optional add-on. It is the coverage that matches the work.

Residential cleaning runs on a large, high-turnover workforce. That makes employment practices the second-largest exposure after theft, and the Merry Maids FDD recognizes it by requiring EPLI.

Employment Practices Liability Insurance covers claims by employees and former employees — wrongful termination, discrimination, harassment, wage disputes. The more people you hire and let go, the more often one of those claims surfaces. ServiceMaster brands have faced employment-practice class actions, and a franchisee is not automatically covered by anything the franchisor carries; your own EPLI policy is what responds for your business.

The agreement requires $250,000, which matches the Rikor baseline for a newer franchisee. Two cautions. First, the agreement allows a $100,000 sublimit attached to your general liability instead of a standalone policy — that is cheaper but weaker, and it shares limits with your liability claims. The standalone policy is the better structure. Second, $250,000 is a starting point; as your headcount climbs past ten or your revenue past $750,000, the exposure grows and the limit should scale with it.

During busy stretches, many Merry Maids franchisees bring in an independent 1099 cleaner to cover overflow. That common practice creates two separate exposures.

The first is liability. The standard general liability policy may contain a subcontractor exclusion that removes coverage for damage caused by an independent contractor — unless that 1099 cleaner carried her own current insurance. A certificate that lapsed after you brought her on provides no protection at claim time.

The second is the workers' compensation audit. If a 1099 cleaner cannot show her own coverage, your workers' compensation carrier treats her pay as your payroll at the year-end audit and charges premium on it — the same as if she were your employee. This is one of the most common surprise audit bills in residential cleaning, because the overflow help is hired fast and the paperwork is the step that gets skipped.

Most cleaning franchisees bring in a 1099 cleaner during overflow weeks, and the gap only shows up when something breaks or the audit runs. Rikor's subcontractor compliance monitoring tool tracks those certificates in real time, so a lapse surfaces before the next job — not after a claim or an audit bill. [See how subcontractor compliance works →](/subcontractor-compliance/) Collect a current certificate from every 1099 cleaner before she starts, and verify the date rather than assuming it is still active.

The honest answer is that your premium depends on details specific to your operation. What you can understand is how the number is built — and the part that catches franchisees at year-end.

Workers' compensation is usually the largest line for a cleaning business, because the model is labor-heavy. Carriers price it with a formula: your payroll divided by 100, multiplied by your state's rate for the cleaning classification (NCCI code 9014), multiplied by your experience modification. The rate itself is set by your state's rating bureau, not the carrier — the insurer applies the state's number.

Both workers' compensation and general liability are auditable. An audit is the carrier's year-end review that compares what you estimated when the policy started against what actually happened, then adjusts the premium up or down. For a cleaning business, general liability and workers' compensation are usually rated on payroll, so the number moves with your actual wages — and with any 1099 cleaners who could not show their own coverage.

A simple example. Say you estimate $260,000 in payroll across your cleaning teams when the policy starts, and a strong year of new accounts pushes you to $360,000. At a workers' compensation rate near $4 per $100 of payroll, the audit adds about $4,000 on that $100,000 difference. If you also paid $40,000 to 1099 overflow cleaners who could not produce certificates, that amount gets added to the base too. The bill usually arrives as a single lump sum a few months after the policy year closes.

For a residential cleaning franchise with ten to twenty employees, a complete program — general liability, auto, workers' compensation, EPLI, crime, and care-custody-control — commonly runs in the range of $8,000 to $14,000 per year. The labor-driven workers' compensation line and the employment exposure are what make a cleaning program cost more than the bare general liability number suggests.

The practical move on audits is to estimate payroll close to reality, and if you add cleaners fast mid-year, ask your carrier for a mid-term adjustment. Spreading the increase across the remaining payments is far easier on cash flow than a surprise lump sum after the year ends. The audit is not a penalty — it is the carrier collecting premium that was always owed once the real payroll is known, and it can refund you if you overestimated.

The Merry Maids FDD requires general liability, auto, workers' compensation, EPLI, and a third-party crime bond — and recommends care, custody, and control. It is more complete than many cleaning FDDs. Where experienced operators go further is mostly about raising limits that are set too low for the real exposure. The recommendations below are Rikor's baselines for newer franchisees, calibrated to your headcount and revenue.

Third-Party Crime coverage at $250,000, not the FDD's $25,000. This is the most important gap. Your brand is sold on "bonded" cleaners, and the single most likely high-dollar claim is theft from a home. A $25,000 limit does not cover a jewelry or watch loss, and a bond that pays only on proven theft leaves the most common accusations unanswered. Rikor's benchmark is $250,000 on a form that responds to credible third-party accusations, not just convictions.

Care, Custody & Control / Bailee coverage — carry it, do not just consider it. The FDD recommends $150,000 but does not require it, and the standard general liability care-custody-control exclusion removes exactly the claims your cleaners create. Carry it at $150,000 as a baseline and size up for homes with high-value contents.

Employers Liability at $1,000,000, not $500,000. The FDD minimum is $500,000. Employers liability answers a serious employee-injury lawsuit outside workers' compensation. Rikor recommends raising it to $1,000,000; the cost difference is small.

Standalone EPLI, scaling with headcount. The FDD requires $250,000, which is the right baseline — but take it as a standalone policy, not the $100,000 GL sublimit the agreement allows, and scale toward $500,000 to $1,000,000 as you pass ten employees or $750,000 in revenue. A high-turnover workforce is the textbook EPLI exposure.

Cyber Liability — $250,000 baseline. The FDD does not require it. Merry Maids runs online booking and stores client payment data, which is a real breach exposure. Rikor recommends $250,000 for a newer franchisee, scaling with revenue.

A confirmed $2,000,000 general aggregate. The FDD's general liability requirement names a per-occurrence limit but no aggregate. Confirm a $2,000,000 aggregate so a year with multiple claims is not capped early.

Umbrella — driven by your exposure. The FDD does not require an umbrella, and an umbrella adds a layer of limit above your general liability, auto, and employers liability. For mostly residential cleaning, the realistic worst case usually sits inside a $1,000,000 primary stack, so an umbrella is not the first dollar to spend — raising the crime and care-custody-control limits matters more. An umbrella becomes appropriate as you add commercial accounts that require higher certificates, grow a larger fleet of cars moving between homes, or take on facilities work where a single premises injury can be severe. Size it to the commercial work you actually take on.