Laundromat Business Insurance

Getting insurance for your laundromat business is essential.

Laundromats need to be protected against things like property damage, personal injury, and breaches of contract.

For example, a customer’s clothes are ruined during the laundry process, or a machine catches on fire and causes damage to the premises (and customers’ property). 

We’ll help you find the most personalized and affordable coverage for your unique business.

Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Laundromat Business

General liability insurance is — generally speaking — one of the most important insurance policies for laundromats. 

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

Typically, the protection afforded by general liability is not enough to fully protect your laundromat. Therefore, a selection of the following extra policies is commonly used:

  • Commercial property insurance: Assists your business in the event of a natural disaster destroying or damaging your business’s property. This is particularly important for laundromats, which require plenty of expensive equipment.
  • Workers’ compensation insurance: A policy that is required by law for businesses with employees to look after them if they are injured or fall ill while performing a work-related activity.
  • Commercial auto insurance: Businesses with at least one vehicle that is used for commercial purposes are legally required to own this policy, which provides coverage for personal injuries and property damage related to accidents.

When shopping around different providers for coverage, make sure to pay attention to the differences between the main types of insurers:

  • Brick-and-mortar insurers — Describes firms that use a physical store and insurance agents in order to offer quotes. Because of this approach to selling insurance, their policies tend to be more expensive.
  • Online insurers — By contrast, these firms take an online approach to selling insurance that enables them to make their policies more affordable. Plus, by taking advantage of powerful AI, they can match the personalization of traditional options.

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Cost of General Liability Insurance

The average laundromat in America spends between $350-$750 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a laundromat business to other professional industries using the graph below:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.

A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

Find the Best Rate

Discover the best coverage at the lowest rate in our affordable business insurance review.

Common Situations That General Liability Insurance May Cover for a Laundromat Business

Example 1: One of your dryers develops an electrical issue without your knowledge. When a customer uses the dryer, he is shocked by the malfunctioning dryer and sustains injuries that require medical care. Your general liability insurance policy would cover the cost of the customer’s medical treatment.

Example 2: A customer slips on the wet floor of your bathroom and falls, causing injuries and leading them to file a lawsuit against your company. The general liability insurance you carry will pay for your legal costs, including a settlement, up to the limits of your policy.

Example 3: An employee accidentally spills cleaning chemicals on a rack of recently cleaned clothing. Many of the pieces were designer apparel from a frequent customer. Instead of needing to pay for replacing the clothing out of pocket, you can most likely get help covering replacement costs from your general liability policy.

Other Types of Coverage Laundromat Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:

Commercial Property Insurance

Your laundromat is filled with expensive equipment, all of which is required for you to do business. In the event of a disaster, such as a fire, your equipment, as well as the building, could be damaged partially or completely. A commercial property insurance policy would provide financial assistance to help you replace your equipment, up to your policy limits. Having the money on-hand to get back up and running will ensure that you suffer minimal downtime.

Workers’ Compensation Insurance

Keeping up with customer demand requires having employees, and having employees requires carrying workers’ compensation insurance. Not only is workers’ compensation required by law, but it also ensures that you can take care of your employees if they are injured doing work-related tasks. Your workers’ compensation policy will cover the costs of treating work injuries and the cost of helping to pay lost wages while the employee recovers.

Commercial Auto Insurance

If you have one or more vehicles you use primarily for business, you need commercial auto insurance. Your commercial auto policy works much like your personal auto policy by helping to cover costs related to accidents in company vehicles. Coverage will help pay for medical bills for any injured parties as well as the repair or replacement of company vehicles.

Commercial Umbrella Insurance

When the policy limits of your general liability policy are exceeded, a commercial umbrella insurance policy will take over. Most businesses do not have the cash on hand to cover extra liability costs—like those stemming from a lawsuit—which is why commercial umbrella insurance can prove so beneficial.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.

Here are several things you can do to better protect your laundromat business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Maintain your corporate veil.

Laundromat Business Insurance FAQ

Can I buy business insurance online for my laundromat business?

Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.

What is included in a business owner’s policy?

A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

What is the difference between business insurance and general liability insurance?

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a laundromat business?

Yes. Due to the amount of capital required to launch a laundromat, obtaining business insurance should be a priority before starting so that this investment is safe from the many inherent risks of running a business.

This assumes that your laundromat doesn’t need to own any specific policies in order to be legally compliant (e.g., workers’ compensation and commercial auto insurance).

Will insurance protect my laundromat business from everything?

Not necessarily. Certain exceptions may be written directly into your laundromat business insurance policy, and some perils may be entirely uninsurable.

Do I need business insurance if I already have an LLC?

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.

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