Your Guide to Dry Cleaning Insurance for Your Small Business

If you’ve landed here, you’re likely the proud owner of a thriving dry cleaning business. You’ve built a reputation as a reputable small business and you’re continually growing. But now you’re looking to make sure the business you’ve built is well-protected with the right business insurance coverage. But it’s hard to know where to start, right? In this guide, we’ll cover a few things:

• The risks dry cleaners face
• How much dry cleaning insurance costs
• The types of insurance you should consider

Dive in for more information!

Risks That Dry Cleaners Face

You may not think that your business faces a lot of risks but there are some things you should be mindful of. 

• Do you work on designer clothing? If you damage a piece of expensive clothing, the cost to replace the item could be astronomical.
• Dry cleaning businesses often work with chemicals in the cleaning process, right? If one of your employees becomes ill while spot cleaning some clothing, you could end up footing the bill for their medical expenses.
• Could the chemicals you use start a fire? A fire or storm damage could destroy the clothing on your premises.
• As a dry cleaner, do you use expensive equipment? If they break down or are damaged in a fire, how much would it cost you to repair or replace the equipment?
• Do you offer a service to pick up or drop off dry cleaning for customers? What happens if your employees get in an accident? Will personal auto insurance cover any damage?

These are just a few of the risks dry cleaners face that the right business insurance can cover. 

How Much Does Dry Cleaning Insurance Cost?

There are a lot of factors that can lower or raise what you’ll pay for small business insurance coverage. Here are a few factors you should consider:

• The type of insurance you choose
• Deductibles and policy limits
• The location of your business
• The number of employees/payroll
• The size of your business
• Whether or not you offer delivery services
• Do you offer both dry cleaning and laundry?

General liability insurance can cost anywhere from $500–$1,000 a year. If your business needs a comprehensive insurance program (with general liability, workers’ compensation, property insurance, etc.) costs will be higher. Even different insurance carriers can have widely varying premium costs.

We always recommend speaking with experienced insurance agents to determine what insurance you need and how much it will cost. Our specialists will do their best to help you get affordable prices on laundry insurance.

What Kind of Insurance Does a Dry Cleaning Business Need?

Now down to the nitty-gritty. These are some dry cleaner insurance options you should consider. 

General Liability Insurance

General liability insurance—also known as “Slip and fall insurance”—is a policy that every small business owner needs. It protects you if you’re accused of third-party bodily injury, third-party property damage, or advertising injury.

Example: It’s the middle of winter and customers have been dragging slush and snow inside. A customer slips and falls on your wet floor, cracking their head open. They can sue you to cover their medical bills. But if you have general liability insurance, your insurance company can step in to foot the bill for the customer injury.

Commercial Property Insurance

You probably own or lease a small building to house your dry cleaning equipment and any clothing you’re cleaning for customers, right? What happens if a strong storm blows through or you suffer damage from a fire? Unless you have property coverage, it can cost you thousands of dollars to repair the building and compensate customers for damaged items.

But property insurance can help cover those costs up to the limits of your policy. Business property coverage can include business personal property, inventory, equipment, and the building itself if a covered peril occurs (things like a fire, storms, theft, or vandalism).

Bailee’s Coverage for Dry Cleaners/Laundromats

Do you need bailee’s coverage? If you offer dry cleaning and laundry services, you should consider this add-on to commercial property insurance. This endorsement covers any property stored on your premises that is not owned by you or your shop but is in your possession. If the property is damaged, this can limit your financial risks and out-of-pocket replacement costs.

Business Interruption Insurance

If your business is damaged due to a covered peril (i.e. a fire) and you can’t operate, a business interruption insurance policy can help cover business expenses. What does that include? It can cover operating costs like payroll, bills, taxes, lost income/profits, and more. If your small business can’t handle the loss of revenue while rebuilding, this coverage is imperative. 

Business Owners’ Policy

Some insurance companies offer small businesses something called a business owners’ policy (BOP). A business owners' insurance policy is a bundle of insurances offered at a discounted rate. A BOP usually includes the three most common—and most necessary—coverages to protect your business: general liability, commercial property, and business interruption. It can’t hurt to check with an insurance agent to see if you qualify. 

Commercial Auto Insurance

If your business offers pick-up or drop-off dry cleaning services, you need to protect the personal or business vehicles with commercial auto insurance. If you or one of your employees is in a car accident, a personal auto insurance policy may refuse to cover any claims if you were working. That's why commercial auto is so important.

Workers' Compensation Insurance

Workers’ Compensation Insurance: If you hire employees, you’re required to get workers’ compensation insurance in almost every state. It covers employees' medical bills, rehabilitation costs, and lost wages related to an employee injury.

Other Insurance Options to Consider

What other options should be considered as part of a dry cleaner/laundry insurance policy? 

• Equipment Breakdown Coverage: Some insurance companies will offer a specialized coverage called "equipment breakdown" for the dry cleaning industry to help pay for repairs if your equipment breaks down (such as commercial laundry machines).
• Pollution Liability Insurance: Business operations like dry cleaners use dry cleaning chemicals or things that can be considered pollutants. This insurance can help cover your cleanup costs if you accidentally spill chemicals.
• Employee Dishonesty Coverage: Employee dishonesty coverage helps compensate your losses if an employee steals from you. 
• Excess Liability Insurance: Also referred to as an umbrella policy, excess liability can help you cover any costs that go above and beyond an underlying insurance policy. 
• Professional Liability Insurance: Professional liability insurance protects your business if you're accused of negligence or undelivered services that a customer paid for.
• Cyber Liability Insurance: Cyber liability coverage is important if you house customer information (name, address, credit card information) in an online database. If you're the subject of a data breach, this coverage can help you notify impacted customers and provide them with credit monitoring.

You want to make sure you're properly insured with the right insurance coverage for your business. Check with one of our independent agents today!

Get a Free Dry Cleaner Insurance Quote

Let us help guide you through the process of getting a business insurance policy for your dry cleaning business (even if you just want more information). We strive to make the process of getting a free quote quick and easy. You can simply complete the form at the top of the page or give us a call at 877-907-5267. Someone will gladly help you get the best insurance for your business.

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