CHICAGO — As our industry continues to evolve through technological advancements and amid changing customer expectations, it’s never been more important to secure comprehensive insurance coverage for your laundromat or laundry service. From water damage and equipment breakdowns to customer liability and employee safety, operators face a wide range of risks that demand careful attention and proactive management.
Featuring input from four insurance providers with vast laundry industry experience, this article explores the current state of insuring laundry businesses, offering expert insights into the challenges facing the industry, effective risk maintenance strategies, and key considerations when evaluating insurance policies.
(Editor’s note: The information provided here is for educational purposes only. Readers should consult an insurance services professional regarding their specific situation.)
Q: What is your advice to laundry owners who are having difficulty finding insurance that would be the best fit for them?
Lawrence Larsen, owner, Lawrence Larsen Laundry Insurance: Take the time to search out an experienced laundromat insurance broker to find an admitted insurance carrier in your state. Time will eventually give incentive to insurance companies to again offer coverage in those areas currently with limited options, particularly in the policy-rich areas of Florida, Texas and California. State insurance commissioners will likely allow increased premiums, but fair rates reflecting the realities of inflation and the reduced value of the American dollar will seem to be normal. Just like increased pricing by our laundromat customers is being accepted, so will the higher costs of providing insurance be accepted by laundromat owners.
Jodie Millino, vice president commercial lines-producer, HUB International Insurance Services: Due to the limited number of carriers that will write this class of business currently, there are not the options there used to be. Consulting with an insurance professional that is familiar with the industry is the best way to find the best fit that is available.
Larry Trapani, president, Brooks-Waterburn Corp.: Work with a specialist who truly understands the laundry industry. A generalist broker may not know which carriers are comfortable with laundromat risks. We’ve spent years cultivating relationships with insurers who specialize in this space. Being transparent about operations, risk management and past claims also helps find the right match.
Q: How do you envision the laundry insurance marketplace changing over the next few years, if at all?
Millino: The insurance market is very fluid, and changes are happening all the time. It is possible that there will be new carriers that see an opportunity and will be available to write coverage for self-service laundry owners. California being the most difficult state to write insurance coverage for all business owners, the insurance commissioner will need to let the carriers take rate increases if they want them to write insurance coverage.
Trapani: We’re going to see more tech integration—usage-based premiums and smart sensors will play a bigger role. The market may tighten temporarily due to rising reinsurance costs and climate-related losses, but I also expect new, innovative products to emerge as carriers compete for well-managed businesses. Specialization will be key.
Larsen: Rates will be higher, but there will be more competition, especially in workers’ compensation policies, which will work to mitigate the increases in other coverages. Liability coverage will remain reasonable and widely available. Property coverage will see significant increases and will likely see the greatest growth in costs for laundromat owners.
Q: What action(s) can laundry owners take to make certain their businesses remain insurable?
George Ingram, vice president of marketing and sales, NIE: The unfortunate fact is that insurance costs are rising, as are the costs of almost everything. Increasing claims and the cost of claims are drivers in increasing premiums. A business owner must remain diligent in preventing losses by routinely evaluating the business and asking: “If I was a customer, would I want to clean my clothes here?” If your location is well-maintained, clean, tidy and safe, most likely the answer will be “yes.” A yes answer will typically result in the business being a better risk.
Larsen: Never attempt to negotiate a settlement, acknowledge a loss or even admit to a customer or claimant that there is insurance coverage in the event of a potential loss. You paid a company to provide professional assistance and settlements, and owners would be advised to let them handle all claims. Read what your insurance company expects you to do in the event of a claim and post the instructions in your back rooms so you and your staff can reference them prior to a claim.
Millino: Because many business owners are tenants in buildings they do not own, it can be difficult to stay insurable because insurance carriers are using drones to look at buildings, specifically roofs. That can be an issue in placing coverage, but it is important that the business owner makes sure the store is in good condition, and that dryer vents (specifically main vents) are cleaned more than once a year. Stores open 24 hours a day are difficult to write because carriers do not want the constant exposure.
Trapani: Maintain clean loss histories, stay current with safety and maintenance protocols, and invest in your building’s infrastructure. Document everything, from equipment servicing to training logs. The more proactive and transparent you are, the more confident insurers feel about backing your operation.
Q: Is there anything you’d like to add about insurance for laundry businesses that the prior questions don’t address?
Millino: Lastly, one other item the business owner may want to consider is excess/umbrella coverage. Lawsuits are getting larger. It used to be that the larger businesses were the targets. Today, many attorneys are targeting small businesses because they know there may not be coverages that a large-business owner would be carrying. It is important that you ask your agent what insurance coverage they think you should carry. This is why it is so important that you go with an insurance agent that is experienced in this industry.
Trapani: Insurance is often seen as a necessary evil, but it can also be a competitive advantage. A well-insured business recovers faster from setbacks and signals professionalism to landlords and customers alike. Don’t just buy a policy—build a relationship with your agent and make insurance part of your strategic planning.
Miss an earlier part? You can read them here: Part 1 — Part 2 — Part 3
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].
