During my years as a commercial insurance agent, I worked with hundreds of business owners, and I have never met anyone who had all the coverage they actually needed. Most business owners start the conversation with their insurance agent with a fatal statement: "I want the cheapest coverage I can get." This is a terrible position to start with because the agent wants your business so badly that they will write a policy that leaves you exposed to liabilities.

You should always have an open conversation with a trusted and experienced commercial insurance agent so that you are both educated in your needs and the coverages you desire. While I am no longer an insurance agent and have no affiliation with any insurance company, I want to help laundromat owners understand the importance of having the right insurance to protect their business.

Owning and operating a laundromat can be a highly profitable business, but like any business, it comes with risks. From equipment breakdowns and property damage to customer slip-and-fall accidents, laundromats face unique challenges that require comprehensive insurance coverage. In this guide, we’ll break down the key types of insurance every laundromat owner should consider to safeguard their investment.

1. General Liability Insurance

Liability coverage is one of the most crucial forms of insurance for laundromat owners. General liability insurance protects your business from claims related to:

• Customer injuries (e.g., slips and falls)

• Property damage caused by your business operations

• Legal fees and medical costs associated with liability claims

A single lawsuit could put your entire business at risk, making general liability insurance a non-negotiable component of your coverage.

2. Business Owner’s Policy (BOP)

A Business Owner’s Policy (BOP) is an excellent choice for laundromat owners because it bundles several essential coverages into one policy at a lower cost. A standard BOP typically includes:

• General Liability Insurance (as mentioned above)

• Business Property Insurance – Covers damage to your laundromat’s building, equipment, signage, and inventory due to fire, theft, vandalism, or other covered perils.

• Business Interruption Insurance – Provides financial support if your laundromat is forced to close temporarily due to a covered event (e.g., fire, storm damage), helping cover lost income and expenses.

A BOP is a cost-effective way to get multiple layers of protection tailored to small business needs.

3. Commercial Property Insurance

Your laundromat is heavily dependent on expensive washers, dryers, and other equipment. Commercial property insurance covers your building and contents in case of damage due to:

• Fire

• Storms

• Vandalism

• Theft

Given the high cost of laundry equipment, having adequate property insurance ensures you won’t be left covering these costs out of pocket.

4. Commercial Auto Insurance

If your laundromat offers pickup and delivery services, commercial auto insurance is essential. This policy covers:

• Vehicle damage from accidents or vandalism

• Medical expenses for injuries sustained in an accident

• Liability coverage if your business vehicle causes injury or damage to another party

A personal auto insurance policy may not cover accidents that occur while using a vehicle for business purposes, making commercial auto insurance a must-have for laundromats offering mobile services.

5. Workers’ Compensation Insurance

If you have employees, workers’ compensation insurance is legally required in most states. It provides benefits such as:

• Medical expenses for work-related injuries

• Wage replacement for employees who cannot work due to injuries

• Legal protection against employee injury-related lawsuits

Whether you have attendants, maintenance personnel, or drivers, workers’ compensation ensures your employees are covered in case of workplace injuries.

6. Equipment Breakdown Insurance

Laundromats rely on industrial-grade washers and dryers to keep business running smoothly. If your machines break down due to mechanical failure, electrical issues, or other covered causes, equipment breakdown insurance helps cover repair or replacement costs.

This coverage is particularly important because standard property insurance policies may not cover equipment malfunctions that are not caused by external factors like fire or storms.

7. Utility Service Interruption Coverage

A laundromat cannot operate without essential utilities like water, electricity, and gas. Utility service interruption coverage helps reimburse lost income and certain expenses if your laundromat is forced to close due to a prolonged utility outage caused by covered events.

8. Cyber Liability Insurance

With the increasing use of card payment systems and customer data collection, laundromats are becoming more vulnerable to cyber threats. Cyber liability insurance helps protect your business from:

• Data breaches

• Cyberattacks

• Fraudulent transactions

• Legal expenses related to customer information being compromised

If your laundromat uses a digital point-of-sale (POS) system or customer accounts, cyber liability insurance is a smart addition.

Final Thoughts: Tailor Your Insurance to Your Business Needs

Every laundromat is unique, so working with a trusted insurance provider, experienced in laundromat businesses is crucial. A well-structured insurance plan ensures that your business remains financially secure in the face of unexpected events.

At Laundry Advisors, we help laundromat owners navigate all aspects of business success, including risk management. If you have questions about the best insurance options for your laundromat, reach out to our team, and let’s make sure your business is fully protected.

*Laundry Advisors has no affiliation with any insurance agents, companies or brokers. Any advice we give is based on our past experiences in the insurance industry. Please consult with a trusted, experienced insurance agent for the best options for you and your business.

**PERSONAL OPINION: In todays sue happy world, on top of all my insurance policies, I pay for an additional $2,000,000.00 umbrella policy. EVERY BUSINESS OWNER, NO MATTER THE SIZE OF BUSINESS, SHOULD HAVE AT LEAST $1,000,000.00 IN UMBRELLA COVERAGE. This is in place to mitigate any potential holes in a policy, or cover if I don't happen to have enough coverage in an extreme situation. Consult with your agent to see what a good coverage should be for your situation.