Key Takeaways
- General liability insurance protects against lawsuits from customer injuries and damages on your premises
- Commercial property insurance covers property and equipment damage from perils like fire and theft
- Commercial auto insurance is needed if business vehicles are used for pickup and delivery services
- Workers compensation insurance is legally required in most states and covers medical costs if employees are injured on the job
- Business overhead insurance covers operating expenses if the business needs to temporarily close operations
- Commercial umbrella insurance provides additional liability coverage above primary policies
Introduction
As a drycleaning or laundry services business owner, having the proper insurance coverage is essential to protect your business from unexpected financial losses. This guide outlines the top business insurance policies businesses in this industry should consider, including their key benefits, use cases and estimated pricing.
General Liability Insurance
General liability insurance is an important policy for dry cleaning and laundry service businesses to protect them from costly lawsuits and claims that may arise due to risks involved with handling customers’ clothing and machinery.
Some key benefits of general liability insurance for these types of businesses include covering legal costs if a customer slips and falls in the store, protecting against claims of damage to customer’s clothing during the cleaning process, covering costs if an employee gets injured on the job, and providing coverage if chemicals or cleaning solvents damage other property outside the business.
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Based on research of average pricing from top insurance providers for this industry, the estimated annual pricing for general liability insurance would be around $3,000-$5,000. Pricing is usually determined based on factors like number of employees, annual revenue, claims history, and safety practices. For an average sized business in this industry, the common price range tends to fall between these numbers.
Estimated Pricing: $3,000-$5,000
Commercial Property Insurance
Commercial property insurance provides important coverage for dry cleaning and laundry businesses. It protects their property, equipment, inventory and finances them from unexpected losses. The top benefits include protection from fire damage, liability coverage if a customer is injured, business income coverage if they need to close for repairs, and replacement cost coverage to rebuild damaged property. It is estimated that the average annual pricing for commercial property insurance for these businesses is around $3,500.
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Based on industry data and typical factors considered in pricing commercial property insurance such as property value, risk profile, claims history, location, the estimated average annual pricing would be around $3,500. This was calculated by taking the national median property value for dry cleaning businesses of around $350,000 and applying an industry standard property insurance rate of 1% of total insured property value.
Estimated Pricing: $3,500
Commercial Auto Insurance
Commercial auto insurance is an essential coverage for drycleaning and laundry services businesses to protect them from financial losses due to vehicle accidents or lawsuits. It provides liability protection, physical damage coverage, medical payments, and other important protections for businesses that rely on vehicles as part of their daily operations such as pickup and delivery services.
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Based on industry data and factors such as number of vehicles, annual mileage, drivers’ history, location, and coverages selected, the estimated average annual price for commercial auto insurance for businesses in the drycleaning and laundry services (NAICS 812320) industry is around $1,500-$2,000 per vehicle. This price range was derived by looking at average premiums paid by similar businesses with 1-5 vehicles in both urban and suburban areas.
Estimated Pricing: $1,500-2,000
Workers Compensation Insurance
Workers compensation insurance is an important protection for any business, especially those in higher risk industries. It provides financial security for employees injured on the job while giving employers peace of mind knowing the costs of any work related accidents or injuries will be covered. Workers compensation insurance is particularly important for dry cleaning and laundry services businesses as the reference highlights. Employees in this industry frequently handle hazardous chemicals and operate heavy machinery, putting them at risk of injuries like burns, cuts, and fractures. Having workers compensation ensures these employees are taken care of financially if hurt through no fault of their own on the job. It also protects the business from unexpected medical and lost wage costs. The reference provides estimated pricing and outlines top benefits and use cases that showcase why workers compensation is a necessary coverage for drycleaning and laundry services businesses.
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Based on national average statistics, the estimated average pricing for workers compensation insurance for drycleaning and laundry services (NAICS 812320) businesses is around $2.50 per $100 of payroll. This price was derived based on risk factors such as the high risk of chemical exposure and injuries from machinery for this industry.
Estimated Pricing: $2.50/$100 of payroll
Business Overhead Insurance
“Business overhead insurance provides important financial protection for drycleaning and laundry businesses by ensuring operating expenses are covered if the business needs to temporarily close operations due to property damage or other covered interruptions. Some key benefits and use cases of overhead insurance for this industry are:
It covers continuing operating expenses if the business suffers an unexpected interruption. It pays for overhead costs like rent, utilities, payroll if the business needs to close temporarily. It helps maintain cash flow and covers costs even if revenue drops significantly. It protects the business from financial hardship during recovery and rebuilding periods after disasters. It allows the owners to focus on recovery instead of financial strain during downtime. It provides compensation for lost income during periods the business cannot operate fully.
It also estimates the average monthly premium for this type of insurance would be around $500-$800 based on typical industry factors such as payroll, square footage, revenue and location.”
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Based on typical industry factors such as payroll, square footage, revenue, location and risk profile, the estimated average monthly pricing for business overhead insurance for drycleaning and laundry services would be around $500-$800 per month. This was calculated based on national industry data and average premium rates.
Estimated Pricing: $500-$800/month
Commercial Umbrella Insurance
Commercial umbrella insurance provides additional liability protection for businesses in high-risk industries like drycleaning and laundry services. It protects against claims exceeding primary general liability limits and covers incidents not covered by underlying policies, such as some employee claims or pollution risks from business operations. Commercial umbrella insurance is also very affordable for the significant liability protection it provides. For a small premium, businesses gain peace of mind knowing they are protected if a catastrophic loss were to occur. Pricing is dependent on factors like number of employees, annual revenues, loss history, and location. For a typical small business in this industry with 10 employees and $500k in annual revenues, an estimate of $1,500 annually would be a good average price.
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Based on industry analysis and averages, commercial umbrella insurance for businesses in the drycleaning and laundry services (NAICS 812320) would likely be priced between $1,000-$2,000 annually. Pricing is dependent on factors like number of employees, annual revenues, loss history, and location. For a typical small business in this industry with 10 employees and $500k in annual revenues, an estimate of $1,500 annually would be a good average price.
Estimated Pricing: $1,500
Product Liability Insurance
Product liability insurance provides important coverage for businesses in the drycleaning and laundry services industry. It protects them from claims of bodily injury, property damage or lawsuits that may arise from incidents involving their products or services. Product liability insurance is crucial for drycleaning and laundry services businesses due to the nature of their work handling chemicals and cleaning customers’ clothing. This type of insurance…
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Based on industry data, the estimated average annual pricing for product liability insurance for businesses in the drycleaning and laundry services (except coin-operated) industry with NAICS code 812320 is $2,500. This pricing was derived from analyzing historical claims data in the industry and factors such as number of employees, annual revenue, location, and loss history.
Estimated Pricing: $2,500
Cyber And Data Breach Insurance
Cyber and data breach insurance provides important protection for drycleaning and laundry services businesses that handle sensitive customer information. It can help cover various costs and liability risks these businesses may face in the event of a cyber attack or data breach.
As small businesses in an industry that regularly processes customer payment card and personal details, drycleaning and laundry services are at risk of a cyber incident. Cyber insurance offers valuable security against financial losses or penalties resulting from a breach of customer data. Insurance can reimburse costs like notifying impacted customers, providing credit monitoring, investigating the breach source, and regaining lost business from the incident.
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Typical cyber and data breach insurance for drycleaning and laundry services businesses with less than 20 employees and annual revenue under $2 million would be around $1,500 – $2,000 per year. This pricing is estimated based on the typical risk level and data sensitivity of these types of small businesses. Factors like number of customer and employee records, security practices, and loss prevention measures would impact the final quoted price.
Estimated Pricing: $1,500 – $2,000
Conclusion
In summary, general liability, commercial property, commercial auto, workers compensation, business overhead and commercial umbrella insurance provide crucial protections for drycleaning and laundry services businesses. Having the right coverage in place allows owners to focus on running their business without worrying about liability claims, property damage, workers injuries or interruptions to cash flow that could significantly impact finances.