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:
- How Much Does Commercial Laundry Insurance Cost?
- Why Do Commercial Laundries Need Insurance?
- What Type Of Insurance Do Commercial Laundries Need?
How Much Does Commercial Laundry Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small commercial laundries ranges from $57 to $79 per month based on location, size, revenue, claims history and more.
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.
What Type Of Insurance Do Commercial Laundries Need?
While a commercial laundry can be sure that it needs a variety of policies to protect itself from all major perils, your exact insurance needs depend on factors like the size of your business, your location, your number of employees, and whether third parties visit your premises.
Because your commercial laundry insurance needs are as unique as your services, it is vital to talk to a commercial insurance broker. Having said that, commercial laundries should begin their path to full coverage by exploring:
- Commercial Property - Should your commercial premises be struck by acts of nature, theft, or vandalism, this kind of insurance covers the cost of property loss and damage. Both your building and the equipment within can be protected.
- Commercial General Liability - This form of coverage is designed to cover events in which third parties are injured on your premises, or their property is damaged as a result of your activities. It covers a substantial portion of your legal fees in case of lawsuits.
- Bailee's Liability - As commercial laundries temporarily take custody of property belonging to third parties, you will also need bailee's insurance in case such property is lost or damage while in your care.
- Workers' Compensation - This type of commercial laundry insurance covers employee medical expenses and lost wages if an employee sustains an occupational injury or illness for which your business could be held liable. In the process, it reduces the risk of litigation against your company.
- Commercial Auto - As a commercial laundry, it is likely that you pick orders up from customers and then deliver them to their door once the laundry is complete. Any driver using a vehicle for professional reasons needs to be covered by commercial auto insurance, in case of accidents, theft, and vandalism.
Keep in mind that, while these types of insurance play a core role in protecting the financial health of any commercial laundry in the face of disastrous events, you may need further types of commercial laundry insurance coverage.
Because that is dependent on your unique circumstances, you are advised to consult an experienced commercial insurance broker.
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.
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 ISO General Liability Code(s): 14731, 14732, 14733, 45678
- Suggested Workers Compensation Code(s): 2585, 2586, 2587
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.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
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.
- Answering Service
- Armored Car
- Attorney Lawyer
- Background Music Services
- Business Consulting
- Chemical Engineers
- Civil Engineers
- Claims Adjuster
- Commercial Laundries
- Commodity Broker
- Corporate Wellness
- Court Reporter
- Credit Bureaus
- Debt Collection Agency
- Detective Agency
- Diaper Services
- Electrical 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
- Mediator - Arbitrator
- Medical Billing
- Music, Drama & Dance Therapy
- Office Machine Repair & Maintenance
- Piano Tuners
- Project Management
- Safety Consultants
- Speakers Bureaus
- Temporary Staffing
- Tax Preparer
- Title Abstractors
- Valet Parking
Let's face reality. People today are claims conscious, resulting in a significant share of malpractice lawsuits against professionals.
Liability resulting from the rendering of or the failure to render professional services is excluded in most liability coverage forms. This means that a policy covering a account's or lawyers' office will cover liability arising out of the maintenance or use of the premises, but specifically exclude liability arising out of the rendering of a professional service or the omission of such a service.
In addition to the professions in which actual physical or mental injury may be caused to clients, certain other professions are exposed to claims for malpractice.
Claims may be brought against lawyers, accountants, architects, and similar professional persons for errors or omissions in their professional capacity. Errors & Omissions insurance pays damages that might be awarded to a plaintiff alleging professional negligence.
Professional liability policies are made available to such risks, and these policies provide essentially the same protection as is afforded under the physicians, surgeons or dentists professional liability policy.
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.