Laundromat & Dry Cleaner Insurance

Business insurance helps you keep your business running by covering legal expenses, professional mistakes, and client disputes.

Why Do Laundromats  Need Insurance?

Laundry businesses like laundromats and dry cleaners need to protect themselves from their risks and liabilities that have to do with customers, property damage, employees, and legal claims.

If a customer slips and falls on a wet floor, it’s essential to have the right protection. General liability insurance can provide protection for a laundry business against claims of property damage, bodily injury, or even lawsuits.

Similarly, if you have part-time or full-time employees and they slip and fall, workers compensation insurance can be essential. It is also important to protect property and equipment against Natural disasters, theft, or vandalism.

Having the right insurance can protect your organization in the event that valuable customer items are lost or damaged, laundry equipment malfunctions and needs to be replaced, or customer credit card data is lost in a cyber breach.

What Insurance Do Laundromats & Dry Cleaners Need?

Running a laundry business involves managing expensive machinery, handling customer property, and dealing with heavy foot traffic. These factors create unique risks for owners. To keep your dry cleaning service or laundromat secure, you should review the following types of business insurance options.

Commercial Property Insurance

This policy is vital if you own or lease the physical space where your business operates. It protects your building and its contents against perils like fire, theft, and vandalism. It covers the structure itself and the heavy equipment inside, such as industrial washers and dry cleaning presses.

Example: A fire starts in a dryer vent and damages a large portion of your facility. Commercial property insurance pays for the repairs to the building and equipment.

General Liability Insurance

This is the first line of defense for most small businesses. It handles claims involving third-party bodily injury, property damage, and personal injury. Given the risk of wet floors in a laundromat, this coverage is essential for handling slip-and-fall accidents.

Example: A customer slips on a wet floor near the washing machines and breaks an arm. General liability coverage pays for their medical bills and legal defense costs if they sue.

Business Owner’s Policy (BOP)

A BOP is a cost-effective way to get broad protection. It typically bundles general liability and commercial property insurance into a single package. This is often cheaper than purchasing the policies individually and is designed specifically for small to mid-sized businesses.

Example: A storm damages your roof, and a sign falls on a customer’s car. The BOP covers the roof repairs and the liability for the damaged vehicle.

Customer Goods Insurance

For dry cleaners and full-service laundromats, you are responsible for the clothing customers leave in your care. This coverage, often called Bailee’s Customer coverage, pays to replace items that are damaged or lost while in your possession.

Example: A chemical malfunction in a dry cleaning machine ruins a batch of expensive suits. This insurance reimburses the customers for the value of their clothing.

Workers’ Compensation Insurance

If you hire staff to run the machines or manage the front desk, you likely need this coverage. It protects employees who get sick or hurt on the job by covering their medical bills and lost wages. Most states require this by law as soon as you hire your first employee.

Example: An employee suffers a severe back injury while lifting heavy laundry bags. Workers’ compensation pays for their physical therapy and part of their missed wages during recovery.

Business Personal Property (BPP) Insurance

While commercial property insurance covers the building, BPP covers the movable assets inside. This includes items like rolling laundry carts, computers, furniture, and tools. It pays to repair or replace these items if they are destroyed by a covered event like a fire or theft.

Example: Burglars break in and steal your point-of-sale computer system and several tablets. BPP covers the cost to replace the stolen electronics.

Business Income Insurance

If a disaster forces you to close your doors temporarily, your bills generally continue even if your revenue stops. This insurance helps replace lost income during the restoration period so you can keep the business afloat.

Example: A burst pipe floods your facility, forcing you to close for three weeks. Business income insurance covers the revenue you would have made during that time.

Commercial Auto Insurance

If your business owns vehicles for picking up and delivering laundry, you need a commercial auto policy. Personal auto policies rarely cover accidents that happen during business use. This covers damages and medical costs if your company vehicle is involved in a crash.

Example: Your delivery driver backs the company van into a wall while dropping off clean linens. Commercial auto insurance covers the repair costs for the van and the wall.

Hired And Non-Owned Auto (HNOA) Insurance

This coverage is necessary if you or your employees drive personal vehicles for work tasks. It provides liability protection if an employee causes an accident in their own car while running a business errand.

Example: You send an employee to the store in their own car to buy detergent, and they cause an accident. HNOA protects your business from the resulting lawsuit.

Cyber Liability Insurance

Laundromats and dry cleaners often store customer data, including credit card numbers and phone numbers. If your digital system is breached, this insurance covers notification costs, legal fees, and credit monitoring for affected customers.

Example: A hacker gains access to your payment system and steals customer credit card information. Cyber liability insurance pays for the costs associated with a data breach.

Umbrella Insurance

Standard policies have financial limits. Umbrella insurance provides an extra layer of liability protection once those underlying limits are reached. It is a safety net for major lawsuits that could otherwise bankrupt a business.

Example: You face a lawsuit for $1.2 million after a major accident at your facility, but your general liability limit is only $1 million. Umbrella insurance covers the remaining $200,000.

Cheapest Laundromat Workers’ Compensation Insurance

The cheapest option for Workers’ Compensation is Hiscox, with an average annual cost of around $840.

Note: These workers’ compensation estimates are based on a laundromat with one or two part-time employees and a small annual payroll. This cost is highly regulated by the state and will vary significantly based on your state’s laws, your total payroll, and your employees’ specific job duties.

Cheapest Laundromat General Liability Insurance

The cheapest option for General Liability insurance is offered by NEXT Insurance, with policies starting at $410 per year.

Note: These general liability estimates are based on a standard $1 million per-occurrence and $2 million aggregate limit for a small laundromat with low foot traffic. The final cost depends heavily on your location, annual revenue, and claims history.

Cheapest Laundromat Business Owner’s Policy

The cheapest option for a Business Owner’s Policy (BOP) is biBerk, with average annual premiums around $695.

Note: These BOP estimates bundle general liability and commercial property insurance. The premium is based on a small, leased location with a modest amount of equipment (washers, dryers, vending machines). Premiums will increase based on the total value of your equipment and if you own the building.

How Much Does Laundry Business Insurance Cost?

Laundry business insurance typically costs around an average of $770 per year, depending on many factors, including where your business is located and your claims history.

The biggest factor is the size of your laundry facility, the location, the services you offer, and the value of your equipment.

Insurers also consider the amount of coverage you choose and whether you package policies together. While it may be tempting to go with the cheapest option, it’s important to choose a plan that truly protects your business from its most likely risks.

Note: These estimates are typically based on standard coverage limits, such as a $1 million per-occurrence and $2 million aggregate general liability policy. Workers’ compensation costs are highly dependent on your total payroll, state regulations, and employee job classifications. Actual premiums will vary significantly based on your laundromat’s specific location, size, claims history, number of employees, and chosen deductibles.

How Is Your Laundromat & Dry Cleaners Insurance Cost Calculated?

Insurance carriers look at specific details about your company to decide your premium. They evaluate various risk factors to determine how likely you are to file a claim.

If your business offers extra services like delivery, pick-up, or wash-and-fold, you will likely see higher rates than a standard self-service facility. However, even unstaffed 24-hour locations must factor in the total replacement cost of their washers and dryers. Providers also review your annual revenue and the number of people on your payroll.

Your physical location is another major influence. You can expect to pay more if your shop is in an area known for severe weather or high crime rates, like vandalism and theft.

The size of your operation matters as well. A larger facility with more equipment carries a higher risk of liability accidents. Your history plays a role, too. Companies that have filed past claims are often viewed as higher risk. Finally, underwriters will adjust pricing based on your business structure, such as an LLC versus a sole proprietorship, and whether you use company-owned vehicles.