Protecting Yourself from Laundromat Lawsuits and Understanding Your Coverages

?A question frequently asked by Laundromat buyers is how do I protect myself from claims and lawsuits brought against my business and how much do claims impact my insurance premiums. What are the most important factors impacting these premiums? Here's my best answer as a long time SoCal insurance broker.?

1)???? Insurance companies count each claim as a mark against any business they insure. It doesn't matter if they pay out a claim or not. They have devoted office time, analysis, legal opinions and perhaps legal fees in exploring and determining your responsibility for the claim. Minor claims, such as loss of a laundry cart or a customer claim of damage to a clothing item should probably be paid outright by the Laundromat owner and not considered or reported as a claim. Look at your deductible to give you an idea of how much you will have to pay whether you report a claim or not. Never avoid reporting a claim and gathering information for defense on any major incident of which you become aware. You need to collect the names, phone numbers and statements of any witnesses and provide it to your carrier.

2)???? The two most important factor in determining the premium for insurance of a Laundromat is the square footage of the store and the amount of insurance provided for equipment and personal property. Also considered are auxiliary games, vending and other services provided. They also collect the number and estimated age of the equipment. Past fires and other losses are also considered as well as if your store has had continuous coverage. Some folks think to buy insurance right after a claim has been made by a customer thinking the insurance company will pay for the cost of defense. That's unlikely to work. Your coverage is from specific date to a specific date.

3)???? In my opinion, a good insurance company will send an independent inspection company to look at your Laundromat. This helps note potential concerns, such as water leaks, legally required fire extinguishers, broken floor tiles and stained or broken ceiling tiles among other things. In the event you are ever sued by a customer as result of condition of your premises, these inspection records can be introduced to show that the overall condition of your Laundromat has been well kept and safe from visible hazards.

4)???? For those of you just entering the fluff and fold, wash/dry/fold or pickup and delivery service need to talk with your insurance brokers and ask if these services are covered under the insurance policy you currently have in place. These services might well be considered outside the definition of a Laundromat and therefore excluded from coverage. In days past, a trick often played on insurance companies was to load up their store with video games after removing most of the Laundromat equipment and attempting to pass off "video parlors" as Laundromats in order to take advantage of lower Laundromat insurance premiums. You can't operate another business in the back room of your Laundromat and expect your insurance company to provide coverage for not-listed activities.

5)???? Trying to trick your insurance carrier or your agent in order to get a lower rate is not a wise thing to do. Even the addition of outside "moving pony" rides not reported can result in a cancellation of your policy. Quarter "pusher" games can be properly insured with notification and disclosure and acceptance by your insurance carrier.

6)???? Another smart move is to find and read your lease. Does it contain a clause about required insurance? Make sure you meet those requirements and that the policy you buy are meeting those requirements.

7)???? All insurance is not the same. And a failure to carry insurance as stated in your lease can result in a landlord cancelling your lease. A Laundromat owner who decided to offer pickup and deliver service had his lease cancelled by a landlord who was receiving complaints from his other tenants because the delivery vehicles were dominating the parking spaces in the center. The court held that Laundromat is term defined as a self-service business and the lease stated it was rented for the purpose of a Laundromat. If additional services (or businesses actual) are to started beyond self-service it requires an amendment to the lease before the use is valid.

8)???? An often-overlooked obligation you have as a tenant is to tell your landlord if you observe any dangerous condition outside your Laundromat, which is used for your benefit, such as parking lot holes and broken asphalt in your lot. You may not have an obligation to repair the parking lot but you do have an obligation to inform the Landlord.

9) Another would be improperly marked steps, or sidewalks that are not sloped to accommodate handicapped customers. Although these areas are common areas controlled by the landlord, your customers are using them to come into your Laundromat. You might not be totally liable for an injury resulting from any of these conditions but you could be found to be partially liable. Take the time to send a certified letter to your landlord if you observe any condition in the common area that is suspect or of concern.

10) And don't forget the other ADA requirements. Coverage for lawsuits brought by ADA violations are not often covered by any insurance carrier. This is considered a willful violation of law on your part. As part of your due diligence remember to have your premises and the shopping center, including the parking lot, inspected by an ADA compliance company.