Owners of dry cleaning services and laundromats have taken a big risk to open and operate their businesses. You might think it makes sense to purchase standard business insurance, but what you really need is an independent insurance agent who has experience working with businesses like yours. Rather than placing the fate of your livelihood in the hands of cookie-cutter coverage, an independent agent can work with insurance companies who specialize in coin laundry insurance, laundromat insurance or dry cleaner insurance that is truly tailored to your specific business.
Whether you own a self-service or full-service laundry or a dry cleaning business, you have a lot more to think about than just washers and dryers. Numerous daily risks can financially ruin your lucrative business overnight. With the constant flow of people on your premises, as well as the equipment, chemicals and even security concerns, you have to make sure your business is protected 24-hous a day, 7-days a week.
Laundromats and dry cleaners face daily risks, such as these:
- Slips and falls due to wet or uneven floors
- Fires due to excess lint in dryers, chemicals on clothes placed in dryers, flammable items placed in dryers
- Children playing, running and touching equipment
- Security concerns including theft, vandalism and other forms of crime
- Impeded customer safety due to insufficient lighting, other customers, parking lot incidents etc.
- Equipment breakdown
- Floods, power outages or weather events that force you to cease operations
- Electrical problems
- Property damage due to tornadoes, hail, windstorms, flooding or heavy rain
What Kinds of Insurance Do Laundromats and Dry Cleaners Need?
While fires may be considered the most financially devastating risk that coin-operated laundries and dry cleaners face, customer slips and falls are by far the most prevalent incidents. You need comprehensive dry cleaner insurance or coin laundry insurance in order to protect your business from all of the potential problems that can arise.
Business property insurance provides coverage for your coin-operated washer and dryers, commercial laundry machines, dry cleaning equipment, computers, and more. If these items are damaged by fire, theft, vandalism or other covered perils, your commercial property coverage may pay for repairing or replacing damaged items.
- If you rent your space, your lease may require you to buy property insurance for the building. Be sure to review your lease carefully and consult an attorney to be sure you are complying with your lease agreement.
- If you do not own your building, you still need coverage for the contents, including washing machines, dryers, flooring, fixtures, decorations, computers and other office equipment, tables, chairs, and any other furniture.
- Be sure to discuss with your agent replacement cost versus actual cash value property coverage. How you insure your business property could make a huge difference in how you are reimbursed in the event of a loss.
If an unexpected event (e.g., fire or windstorm) causes your dry cleaning business or coin-operated laundry to close its doors in order to make repairs, you need business interruption insurance, or business income protection. This coverage, which can be included with your business property policy, provides reimbursement for business expenses and loss of income if you must temporarily cease operations due to some type of covered loss.
- You may want to consider expanding your business interruption insurance to include coverage for loss of income due to utility interruptions (water, electric etc.). You can purchase utility interruption coverage that pays for the income you lose due to interruptions in utility services that occur away from your premises, after a certain waiting period. This may cover you if, for example, you lose power to your laundromat and are unable to open for several days.
- You can also purchase coverage for physical damage to equipment that occurs as a result of a utility interruption (e.g., a power surge damaging your washers).
Commercial general liability (CGL) insurance protects coin-operated laundromats and dry cleaners in instances of customer injury or property damage. If a customer slips and falls while doing his or her laundry, this policy will provide coverage for any resulting medical bills, lawsuits, legal fees and more.
Equipment breakdown coverage, or boiler and machinery coverage, is essential for your dry cleaning business or laundromat. Your business relies on its equipment, whether it is coin-operated machines, industrial washers and dryers, steamers, or dry cleaning equipment. Without functioning equipment, you literally cannot operate. This coverage helps you with the costs of repairing and replacing damaged equipment and may also pay for lost income that is directly attributable to the breakdown of covered equipment.
A Note About Bailee’s Coverage for Dry Cleaners and Full-Service Laundromats
A full-service laundromat (not coin-operated) or dry cleaner has some significant differences from a self-service or coin-operated laundromat. A dry cleaner or self-service laundromat does not rely on customers to do their own laundry; rather, the clothing or other items are entrusted to you for a period of time while you wash, dry clean, steam or iron them. If you provide this service, you also have several additional exposures.
What happens if a customer’s clothing or property is damaged while it is in your care, custody or control? Because standard business property and liability policies cover only your own business property, you need special coverage for your customers’ property that is in your possession.
Bailee’s coverage is an add-on to a business property policy that covers nonowned property that is stored at your shop or is in your possession. It helps pay for damage and minimizes the financial implications for you and your customers if their property is damaged while in your control. Bailee’s coverage is specifically designed for businesses like laundromats and dry cleaners that take in the property of others and are expected to return it undamaged.
Protection for Employees and Other Concerns
Laundromats and dry cleaners should consider these additional types of business insurance to complete their business insurance program:
- If you provide delivery services for your laundromat or dry cleaning customers, you need commercial auto insurance for your vehicles.
- Workers’ compensation insurance is recommended and is likely required by law for any dry cleaner or laundromat that has employees. Your employees may be exposed to heavy machinery, heat, chemicals and other dangers that can cause injuries or illnesses. Workers’ compensation insurance covers the costs of work-related injuries and illnesses.
- Pollution liability insurance may be needed by dry cleaners that use and dispose of certain chemicals or other pollutants.
- Commercial umbrella insurance, or excess liability coverage, provides supplemental liability protection beyond the limits of certain other liability policies.
- Employment practices liability insurance covers you if an employee sues you for discriminatory employment practices.
- If you live in a flood-prone area, you may need flood insurance. Flood insurance is available only from the National Flood Insurance Program, but your independent insurance agent can obtain quotes and coverage on your behalf.
How to Find the Best Insurance for Dry Cleaners and Laundromats
Whether you own a single coin-operated laundry or a chain of dry cleaning stores, you need business insurance that protects your investment and your assets from injuries, property damage and lawsuits. Any one of these events can be financially devastating and can even put you out of business.
The best way to find the right coverage for your needs is to work with a knowledgeable, experienced independent insurance agent who can help you compare quotes from multiple insurance companies. Don’t settle for cookie-cutter coverage or a one-size-fits-all approach; rather, obtain quotes for laundromat insurance or dry cleaner insurance that is tailored to everything that is unique about your business.