All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).
Some of the risks CGL insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While businesses aren't legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.
Learn more about the risks covered by general liability insurance.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A LAUNDRY DELIVERY SERVICE BUSINESS
Example 1: Your employee fails to secure the client’s property after a pickup. When he arrives back at the office, he realizes most of the laundry fell out of the vehicle during transport. General liability insurance should pay the cost to replace the client’s property.
Example 2: While showing a potential new employee the operation, he gets burned by a piece of equipment. A general liability policy would pay his medical bills. If he sues for additional damages, the policy should cover your legal fees and associated costs.
Example 3: While unloading deliveries, your employee backs into a building, causing damage that exceeds the limits of your commercial auto policy. Your general liability policy may cover the cost to repair the building, once you exhaust the underlying limits.
Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It's always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.
On average, laundry delivery services in America spend between $400 - $700 per year for $1 million in general liability coverage.
Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:
Several factors will determine the price of your policy. These include your:
- 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.
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 other types of insurance all laundry delivery services should obtain:
Commercial Auto Insurance
An auto accident can occur while employees are performing business-related activities. Commercial auto insurance can pay to repair damaged vehicles, liability claims, and lost equipment. While minimum coverage limits are state-mandated, business owners should protect themselves by considering higher limits.
You can purchase commercial auto insurance as a standalone policy or as part of a business owner’s policy (BOP), depending upon the carrier.
Commercial Property Insurance
Building owners and renters should consider purchasing a commercial property insurance policy built around their specific needs. This policy will cover costs to repair or replace business-owned assets, including the physical property and/or its contents.
You can purchase commercial property insurance as part of a business owner’s policy (BOP).
Workers Compensation Insurance
State law requires businesses with employees to carry workers compensation insurance. Its purpose is to provide medical coverage for on-the-job injuries. In the event of a more serious incident, the company will get legal representation and court-awarded damages paid up to the limits of the policy.
Insurers write workers compensation insurance as a standalone policy.
In addition to the policies outlined above, there are a few other types of coverage your laundry delivery service business may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.
Inland Marine Coverage
A standard policy may exclude coverage for a customer’s property while in their possession or in-transit. Inland marine coverage will cover property that isn't on your business's physical site. For an additional premium, the insured should be able to purchase inland marine coverage as an endorsement.
Laundry delivery business owners should have a conversation with their insurance agent to determine if this is a necessary coverage.
Commercial Umbrella Liability Insurance
This profession requires handling of non-owned property and the use of chemicals. Owners concerned with the liability risks should purchase a commercial umbrella policy. This insurance acts as an additional layer of protection, taking over where the underlying general liability policy leaves off.
Although it's easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business' financial losses after an incident occurs, but it's much better to avoid losses altogether.
With this in mind, here are three things you can do to better protect your business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
- Streamline your business' internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.
What is included in a business owner’s policy?
A typical business owner's policy includes general liability, business interruption, and 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 business?
You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it's best to be proactive when it comes to protecting your assets. After all, you can't buy insurance to cover a loss that has already occurred.
Will insurance protect my business from everything?
Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.