Here are the Fundamentals of Protecting Your Biggest Investment
According to Dictionary.com, the word insurance is defined as “the act, system or business of insuring property, life, one’s person, etc., against loss or harm arising in specified contingencies, as fire and accident.”
Whether you are new to the laundry business or a long-standing store owner, insurance coverage to protect your investment is essential in today’s world.
You’ve worked hard for what you have and navigating through the insurance process can be a little confusing at times. This article is intended to provide you with basic information about laundromat insurance.
Basic Scenario No. 1: You’re gearing up to open a store in the next three weeks. What is covered by your insurance?
Basic Scenario No. 2: Overnight, your laundry floods, due to a water hose break, and it will require a major cleanup and repairs. What do you do?
There are two insurance components – property and liability. Let’s examine both:
Property
This includes everything inside the self-service laundry:
• Washers and dryers
• Bill/coin changers, debit card readers and vending machines
• Laundry carts
• Security systems
• Products and supplies
• Storefront glass, flooring and outdoor signage
“Replacement Cost” is defined as the value to replace with “new or like new.” It does not refer to either the dollar amount of the loan balance or the depreciated value of the equipment.
Business Interruption/Loss of Income
• Loss of revenue, plus other expenses
• Mortgage payments/rent
• Equipment loans
• Ongoing expenses
• Key employees
• Telephone
• Utilities
Liability
Loss Exposures
• Property
• Circumstances
• Activities and events
Premises Liability
• Injury and damage
• Conditions that exist in and around premises
Bailee Coverage
• Drop-off drycleaning
• Drop-off laundry
Tenant Legal Liability
• Landlord/building owner
• Other occupants/tenants
Additional Insured, Loss Payees and Mortgagee – anyone with a financial interest in your self-service laundry should be added.
• Landlord – lessor of premises (additional insured)
• Equipment distributors – lessor of equipment (additional insured)
• Equipment finance companies (loss payee)
• Vendors (loss payee)
• Banks (mortgagee)
• Lending institutions (mortgagee)
The ‘30/2′ Rule
Now that you know the fundamentals of property and liability insurance, the next question is: “What you do once you choose a provider?”
For example, if you received your insurance through CLA Insurance (coinlaundryinsurance.org), all you would need to remember is “30/2.”
• Submit the application no more than 30 days in advance. Quotes are valid for 30 days and are then subject to rate changes.
• Submit application no less than 2 weeks before coverage is needed. This would provide plenty of time for your insurance advocate to follow-up with you on any questions the underwriter may have – and to get you the best and most accurate quote available.
• For Scenario No. 2, all you would need to do is call your insurance advocate.
All and all, when an accident occurs, just remember:
• Take a deep breath.
• Relax.
• And call your insurance advocate.
Just like the definition above, insurance is defined as the act, system or business of insuring property, life, one’s person, etc., against loss or harm arising in specified contingencies, as fire and accident.
Accidents occur every day. Protect your laundry investment by being well prepared for them.
