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Commercial Laundry Insurance Policy Information

Commercial Laundry Insurance. Commercial laundry services professionally and efficiently launder, dry, and press laundry for their customers.

Commercial laundries use either chemical (dry cleaning) or water applications with heavy-duty cleaners and detergents to clean fabrics, leather goods, and furs for their customers. Services may be provided to the general public or be limited to commercial or institutional customers such as medical facilities, restaurants, hotels, and firms that provide uniforms for employees.

Depending on the type of customer and services offered, the operations may include pick up of soiled items from customers' premises or owned drop-off stations, sorting, pretreating stains, laundering or dry cleaning, pressing and delivering the cleaned items to the customer.

Special coatings, such as stain proofing or waterproofing, may be applied during the cleaning process. Incidental repair work, such as sewing on buttons or restitching seams or hems, may also be performed.

While some commercial laundries cater specifically to private residences who prefer to have their laundry handled by someone else, many provide services exclusively to other commercial ventures such as hotels or catering companies, thereby doing the laundry on an industrial scale.

To achieve their goal of processing the laundry entrusted to them quickly and competently, industrial laundries rely on valuable equipment such an army of industrial washers, dryers, and presses. Following quality control, the laundry is then packed and ready either for pick-up or delivery back to the customer.

While there is no doubt that commercial laundries provide an invaluable service by allowing businesses and private individuals alike to outsource this tedious task, running a commercial laundry is not without risk.

A commercial laundry can, at any time, fall victim to circumstances beyond their control that may prove to lead to exorbitant costs. That is why it is so crucial to invest in comprehensive commercial laundry insurance. To find out what that may entail, keep reading.

Commercial laundry insurance protects laundries from lawsuits with rates as low as $57/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked commercial laundry insurance questions:

• What Is Commercial Laundry Insurance?
• How Much Does Commercial Laundry Insurance Cost?
• Why Do Commercial Laundries Need Insurance?
• What Type Of Insurance Do Commercial Laundries Need?
• What Does Commercial Laundry Insurance Cover & Pay For?

Why Do Commercial Laundries Need Insurance?

A commercial laundry service needs to be insured not merely because they will legally be obliged to carry certain types of coverage, but also, quite simply, because carrying the right types of insurance may one day make the difference between bankruptcy - or at the very least, significant financial hardship - and continued success.

commercial laundries face some of the same threats common to any business, after all, but in addition, companies within this branch of industry have to consider some hazards unique to their line of work.

Your building and its contents may be impacted by an act of nature - a wildfire, hurricane, serious flood, or storm, to name a few examples. You may fall victim to theft or vandalism, or the expensive equipment that is essential to your operation may suddenly break down and require repair or replacement.

The goods a customer entrusted you with may be damaged due to an employee error or mechanical malfunction, or simply lost. An employee could face an occupational injury, whether a physical trauma or an illness related to long-term exposure to detergents. While on your premises, a customer could be hurt.

In all these cases, you will be glad that you invested in commercial laundry insurance coverage, so that the resulting costs do not solely fall onto your shoulders.

Commercial Laundries' Risks & Exposures

Premises liability exposure is very limited at the plant due to lack of public access. If customers drop off or pick up items at receiving stations, the exposure increases. To reduce slips and falls, there should be no frayed or worn spots on carpet and no cracks or holes in flooring. The number of exits must be sufficient and well marked, with backup lighting in case of power failure.

Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. Courts may deem the security of visitors in parking areas as the responsibility of the owner or operator of the premises. Factors affecting the risks include exterior lighting, fencing, and any other security measures in place.

High concentrations of chemicals used in the cleaning process may be corrosive, toxic, or both. Fumes, spills, or leaks may result in bodily injury or property damage to neighboring premises.

Off-site exposures are high as drivers interact with customers during the pick up and delivery of items from customer's premises.

Personal injury exposures include allegations of assault and invasion of privacy. Failure of the cleaning service to run background checks and review references on employees both increases the hazard and reduces available defenses.

Completed operations liability exposure is low. Items may be damaged during the cleaning process, with the frequency being a greater concern than severity. Vapors, odors, and skin, eye, or lung irritants may result if chemicals are not properly removed from the item cleaned.

Environmental impairment liability exposure is high due to the potential for air, surface or ground water, or soil contamination due to the disposal of used cleaning chemicals and wastes extracted from soiled items that are cleaned. The soil around the premises may be contaminated by disposal of chemicals used in the past. Disposal of perchloroethylene must adhere to EPA standards. The chemical is expensive but can be reclaimed and reused.

Workers compensation exposures are high. Work is frequently performed under time constraints. Workers can experience lung, skin and eye irritations, and reactions to the cleaning chemicals. Employees must be fully informed as to the potential effects of any chemicals, including long-term occupational disease hazards, so that they can take action as quickly as possible.

Cuts and puncture wounds can result from sewing. Slips and falls can occur during cleaning at the dry cleaning and laundering facility or at customer's premises when picking up or delivering items. Lifting and material handling can cause back injury, hernia, sprain, and strain.

There may be foreign objects in the eye. Repetitive motion injuries can be a concern. Workstations should be ergonomically designed. Pets owned by customers may attack or bite workers.

Property exposure generally includes a small office, drop off and pick up area, laundering and dry cleaning facilities, and perhaps a warehouse for storage of supplies. There may be a garage area for vehicles used for pick up and delivery services. Ignition sources include electrical wiring, laundering and dry cleaning equipment, water heaters, heating and air conditioning systems.

Flammables include textiles or other fabrics to be cleaned, lint from driers, and scrap materials. At one time, the chemicals used for dry cleaning were highly flammable, but most dry cleaners now use alternative chemical applications with less exposure to fire or explosion. One chemical is generally used to pretreat stains and another to clean the entire item. The spot cleaners tend to be the most flammable.

Hazards increase without proper storage and handling methods. Fire and explosion hazards may be severe unless there are dust collection systems and procedures for regular removal and disposal of scraps. Poor housekeeping is a serious fire hazard. Unless disposed of properly, greasy, oily rags (such as those used to clean the machinery) can cause a fire without a separate ignition source.

Sprinklers may be advisable. Fuels, oils, and lubricants will increase the fire hazard if vehicles are stored and maintained on the premises. Sprinklers may be advisable.

Equipment breakdown exposures include breakdown losses to the dust collection and ventilation systems, laundering and dry cleaning equipment, electrical control panels, and other apparatus. Breakdown and loss of use to the water heaters, dry cleaning and laundering machinery, and pressing equipment could result in a significant loss, both direct and under time element.

Inland marine exposure includes accounts receivable if the cleaner offers credit, bailee's customer, computers, and valuable papers and records for customers' and suppliers' information.

The bailee's customer exposure is for customers' property in the care, custody, and control of the laundry, which starts when the property is entrusted to the laundry and ends when the property is returned to the customer.

A small spill or other damage to a customer's property could reduce the value or require its replacement. The primary causes of loss are fire, theft, collision, overturn, and water damage. Hazards increase in the absence of adequate procedures, such as tagging or marking, to identify customers' goods.

Crime exposure includes both employee dishonesty and theft of money and securities, particularly if there are numerous cash transactions, such as at drop-off points or collections by route drivers. Background checks should be conducted on all employees handling money. There must be a separation of duties between persons handling orders, deposits and disbursements and reconciling bank statements.

All operations should have a monitoring and verification system to reconcile bills and receipts with services rendered. Holdup potential is high as many transactions are paid in cash. Frequent deposits should be made, especially on high volume days.

Business auto exposures are high if pick up and delivery services are provided. Deadlines placed on drivers increase the hazard. Deliveries may be made in residential areas with children present. All drivers must have a valid driver's license and acceptable MVR.

Vehicles must be regularly maintained and records kept at a central location. If vehicles are taken home, there should be written procedures regarding personal use by employees and their family members.

What Does Commercial Laundry Insurance Cover & Pay For?

Commercial laundries can be sued for various reasons, ranging from property damage and employee injuries to customer dissatisfaction and regulatory violations. Insurance can provide financial protection against these risks and help pay for the costs associated with lawsuits. Here are some examples of reasons commercial laundries might be sued, and how insurance can help:

Property Damage: A customer may sue a commercial laundry for damaging their clothes or other personal items. Commercial general liability insurance can cover the costs associated with legal defense and any damages awarded, up to policy limits.

Employee Injuries: If an employee is injured on the job, they may sue the commercial laundry for workers' compensation benefits or damages. Workers' compensation insurance can help cover medical expenses, lost wages, and potential legal fees related to such claims.

Slip and Fall Accidents: A customer or visitor may slip and fall on the premises, potentially resulting in injury and a lawsuit. Commercial general liability insurance can help pay for legal defense and any damages awarded, up to policy limits.

Employment Practices Liability: A commercial laundry may be sued for wrongful termination, discrimination, or sexual harassment. Employment practices liability insurance can help cover legal defense costs and any damages awarded in such cases.

Environmental Damage: Commercial laundries use chemicals that can cause environmental damage if not properly managed. If a commercial laundry is sued for causing pollution or violating environmental regulations, pollution liability insurance can help cover legal defense costs, damages, and cleanup expenses.

Breach of Contract: A commercial laundry may be sued for failing to meet the terms of a contract with a customer or supplier. Professional liability insurance, also known as errors and omissions insurance, can help cover legal defense costs and damages resulting from such claims.

Equipment Breakdown: If a commercial laundry's equipment breaks down and causes damage to customers' property or results in business interruption, they may face a lawsuit. Equipment breakdown insurance can help cover repair or replacement costs, as well as potential legal fees and damages.

For each of these examples, it's essential to remember that insurance policies will have coverage limits and exclusions. Commercial laundries should work with an insurance professional to ensure they have appropriate coverage tailored to their unique risks and exposures.

Commercial Insurance And Business Industry Classification

• SIC CODE: 7211 Power Laundries, Family And Commercial, 7218 Industrial Launderers, 7219 Laundry and Garment Services, Not Elsewhere Classified
• NAICS CODE: 812320 Drycleaning and Laundry Services (except Coin-Operated)
• Suggested Workers Compensation Code(s): 2585 Laundry NOC & Route Supervisors, Drivers, 2586 Cleaning or Dyeing & Route Supervisors, Drivers, 2587 Toilet or Towel Supply Co. & Route Supervisors, Drivers

7211: Power Laundries, Family And Commercial

Division I: Services | Major Group 72: Personal Services | Industry Group 721: Laundry, Cleaning, And Garment Services

7211 Power Laundries, Family And Commercial: Establishments primarily engaged in operating mechanical laundries with steam or other power. Establishments primarily engaged in supplying laundered work clothing on a contract or fee basis are classified in Industry 7218.

• Laundries, power: family and commercial
• Laundry collecting and distributing outlets operated by power
• Power laundries, family and commercial

7218: Industrial Launderers

Division I: Services | Major Group 72: Personal Services | Industry Group 721: Laundry, Cleaning, And Garment Services

7218 Industrial Launderers: Establishments primarily engaged in supplying laundered or drycleaned industrial work uniforms and related work clothing, such as protective apparel (flame and heat resistant) and clean room apparel; laundered mats and rugs; dust control items, such as treated mops, rugs, mats, dust tool covers, and cloths; laundered wiping towels; and other selected items to industrial, commercial, and government users. These items may belong to the industrial launderer and be supplied to users on a rental basis, or they may be the customers' own goods. Establishments included in this industry may or may not operate their own laundry or drycleaning facilities.

• Clean room apparel supply service
• Flame and heat resistant clothing supply service
• Industrial launderers
• Industrial uniform supply service
• Laundered mat and rug supply service
• Radiation protective garments supply service
• Safety glove supply service
• Towel supply service wiping
• Treated mats, rugs, mops, dust tool covers, and cloth supply service
• Wiping towel supply service
• Work clothing supply service, industrial

7219: Laundry and Garment Services, Not Elsewhere Classified

Division I: Services | Major Group 72: Personal Services | Industry Group 721: Laundry, Cleaning, And Garment Services

7219 Laundry and Garment Services, Not Elsewhere Classified: Establishments primarily engaged in furnishing laundry and garment services, not elsewhere classified, such as the repair, alteration, and storage of clothes for individuals and for the operation of hand laundries. Custom tailors and dressmakers are classified in Retail Trade, Industry 5699; fur shops making fur apparel to custom order are classified in Retail Trade, Industry 5632; and press shops are classified in Industry 7212.

• Diaper service
• Dressmaking services on material owned by individual customers
• Fur garments: cleaning, repairing, and storage
• Garment alteration and repair shops
• Hand laundries
• Laundries, except power and coin-operated
• Pillow cleaning and renovating
• Repair of furs and other garments for individuals
• Reweaving textiles (mending service)
• Storage of furs and other garments for individuals
• Tailor shops, except custom or merchant tailors

Commercial Laundry Insurance - The Bottom Line

To learn more about the kinds of commercial laundry insurance policies you'll need, how much coverage you should carry and the associated costs - speak with a reputable agent that is experienced in commercial insurance.

Additional Resources For Professional Services Insurance

Get informed about small business professional services insurance, including Professional liability, aka errors and omissions (E&O insurance), that protects your business against claims that a professional service you provided caused your client financial loss.

• Accounting
• Actuaries
• Answering Service
• Architects
• Armored Car
• Attorney Lawyer
• Auctioneer
• Auditor
• Background Music Services
• Bookkeeping
• Business Consulting
• Chemical Engineers
• Civil Engineers
• Claims Adjuster
• Commercial Laundries
• Commodity Broker
• Corporate Wellness
• Couriers
• Court Reporter
• Credit Bureaus
• Debt Collection Agency
• Draftsman
• Detective Agency
• Diaper Services
• Electrical Engineering
• Engineering
• Environmental Consultant
• Executive, Career & Life Coaching
• Executive Search Firm
• Expert Witness
• Financial Planner
• Financial Services
• Funeral Directors
• HR Consultant
• Inspection Bureaus
• Insurance Agents & Brokers Insurance
• Interpreter
• Mediator - Arbitrator
• Medical Billing
• Music, Drama & Dance Therapy
• Notary
• Office Machine Repair & Maintenance
• Piano Tuners
• Project Management
• Safety Consultants
• Speakers Bureaus
• Stockbrokers
• Surveyor
• Tax Preparer
• Temporary Staffing
• Title Abstractors
• Valet Parking
• Specialty Consultants
• Specialty Service Business

The professional services industry, which includes occupations such as lawyers, doctors, accountants, and architects, often deals with sensitive and complex issues that carry a high risk of liability. These professionals are expected to provide their clients with expert advice and guidance, and any mistakes or oversights can result in significant financial consequences for both the client and the professional. This is where insurance comes into play.

Business insurance provides protection against the financial repercussions of potential mistakes or accidents that may occur while providing professional services. For example, a lawyer may make an error in their legal representation that leads to a financial loss for their client. Without insurance, the lawyer would be personally responsible for covering the cost of this loss. Insurance helps to protect professionals from these types of financial burdens and allows them to focus on providing high-quality services to their clients.

In addition to protecting against financial losses, commercial insurance can also provide legal defense for professionals facing legal action as a result of their work. This can be especially important for professionals in high-stress or high-risk fields, such as doctors or architects, who may be at a higher risk of being sued for professional negligence.

Overall, the professional services industry needs insurance to protect against financial losses and legal action, ensuring that professionals can continue to provide high-quality services to their clients without the added stress and burden of potential financial consequences.

Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Professional Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.

Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Money and Securities, Special Floater, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.