Running a dry cleaning business means juggling customer expectations, delicate fabrics, and specialized equipment—all while managing the risks that come with operating a storefront. Between the expensive pressing machines, potential chemical spills, and racks of customer clothing worth thousands, you've got a lot to protect. That's where a Business Owners Policy comes in.
A BOP isn't just another insurance acronym to ignore. It's a bundled package that combines your most essential coverages—general liability and commercial property insurance—into one policy with one premium. For dry cleaners specifically, this can mean real savings and simplified coverage. But here's what most business owners don't realize: a standard BOP doesn't cover everything your dry cleaning operation needs. Let's break down when a BOP makes sense for your business and what additional protections you'll want to add.
What's Actually Included in a BOP for Dry Cleaners
Think of a Business Owners Policy as your insurance starter pack. It combines two fundamental coverages that almost every dry cleaner needs: general liability and commercial property insurance. On the general liability side, you're protected if a customer slips on your freshly mopped floor and breaks an ankle, or if a child knocks over a mannequin display and gets hurt. This coverage handles their medical bills and legal fees if they sue.
The property insurance component protects your physical assets—your pressing equipment, boilers, dry cleaning machines, point-of-sale systems, furniture, and the building itself if you own it. If a fire damages your shop or a pipe bursts over the weekend and floods your workspace, this coverage pays to repair or replace your equipment and inventory. Most BOPs also include business interruption coverage, which is absolutely critical for dry cleaners. If you have to close for two weeks while repairs are made after a covered loss, business interruption insurance replaces your lost income and helps cover ongoing expenses like rent and payroll.
Many insurers also throw in equipment breakdown coverage as part of the BOP package. This is especially valuable for dry cleaners because your machines are both expensive and essential to operations. If your $15,000 dry cleaning machine suddenly stops working due to mechanical or electrical failure, equipment breakdown coverage pays for repairs or replacement, plus any spoilage of customer garments that were mid-cycle when the breakdown occurred.
When a BOP Makes Financial Sense for Your Dry Cleaning Business
The biggest advantage of a BOP is cost savings. Bundling your general liability and property coverage together typically saves dry cleaners 10-15% compared to purchasing these policies separately. For a small dry cleaning operation paying $3,000 annually for insurance, that's $300-$450 back in your pocket each year—enough to cover a month's worth of supplies or a equipment maintenance contract.
BOPs are specifically designed for small to medium-sized businesses, and most insurers set revenue limits around $3-5 million annually. If you're operating a single location or a small chain of dry cleaners with annual revenues below these thresholds, a BOP is likely your most cost-effective option. The sweet spot for BOP eligibility is usually dry cleaners with one to three locations, fewer than 50 employees, and modest revenue streams.
Another practical benefit: simplified administration. Instead of managing multiple policies with different renewal dates, deductibles, and insurance companies, you have one policy document, one renewal date, and one insurer to contact when you have questions or need to file a claim. For busy dry cleaning business owners already wearing a dozen hats, this streamlined approach saves time and reduces headaches.
What Standard BOPs Don't Cover (And Why That Matters)
Here's where dry cleaners need to pay close attention: a standard BOP doesn't cover everything specific to your industry. The most glaring gap is customer property in your care, custody, and control—also known as bailee's coverage. If you accidentally ruin a customer's $500 wedding dress or lose an expensive suit, your general liability coverage won't help because the item was in your possession for servicing. You need a specialized bailee's customer goods endorsement added to your policy.
Professional liability, sometimes called errors and omissions insurance, is another critical exclusion. This covers claims that you damaged clothing through the cleaning process itself—shrinkage, discoloration, fabric damage, or failing to remove stains you promised to remove. Since damaging garments is one of the most common liability exposures for dry cleaners, this coverage is essentially non-negotiable. Many insurers offer professional liability as an add-on endorsement to your BOP.
Pollution liability is another big one that dry cleaners often overlook. If you use perchloroethylene (perc) or other chemical solvents, you face environmental risks that standard BOPs explicitly exclude. A chemical spill could require expensive soil remediation, and contaminated groundwater could trigger EPA involvement. Pollution liability coverage protects against these scenarios. Some states have particularly strict environmental regulations for dry cleaners, making this coverage even more important depending on your location.
Workers' compensation is never included in a BOP, yet it's legally required in almost every state if you have employees. This coverage pays for medical expenses and lost wages if an employee gets burned by steam, injured moving heavy equipment, or develops respiratory issues from chemical exposure. You'll need to purchase workers' comp as a separate policy.
What Determines Your BOP Premium
Most dry cleaners can expect to pay between $1,500 and $4,000 annually for a BOP, though this range varies significantly based on several factors. Your location plays a huge role—dry cleaners in urban areas with higher property values and greater liability exposure typically pay more than those in small towns. The physical characteristics of your space matter too: a modern, sprinklered building will cost less to insure than an older structure with outdated electrical systems.
Your annual revenue and payroll directly impact pricing since these figures help insurers estimate your exposure. A dry cleaner generating $500,000 annually will pay considerably less than one doing $3 million in revenue. The number of employees matters for liability exposure—more workers on your floor means more opportunities for customer interactions and potential accidents. Your claims history also influences pricing significantly. If you've had multiple customer property damage claims or slip-and-fall incidents in recent years, expect higher premiums.
The coverage limits you select affect pricing too. Standard BOPs often include $1 million per occurrence and $2 million aggregate for general liability, with property coverage matching the replacement value of your building and contents. If you increase these limits or lower your deductible, your premium rises accordingly. Those specialized endorsements we discussed—bailee's coverage, professional liability, pollution liability—each add to your base premium, typically anywhere from a few hundred to over a thousand dollars depending on your risk profile.
How to Get Started with BOP Coverage
Shopping for a BOP means gathering some basic information about your operation. Insurers will ask about your annual revenue, number of employees, square footage, building age and construction type, types of equipment you use, whether you use perc or alternative solvents, and your claims history for the past five years. Having this information ready streamlines the quoting process.
Don't just accept a standard BOP package without customization. Work with an insurance agent or broker who understands dry cleaning operations to build a policy that actually matches your exposures. Make sure you're adding bailee's coverage with limits that reflect the typical value of customer clothing in your possession—if you regularly handle high-end designer clothing or large commercial contracts, you might need $100,000 or more in bailee's limits. Discuss whether professional liability and pollution coverage should be endorsements on your BOP or separate standalone policies.
Finally, review your BOP annually. As your business grows, your coverage needs change. Maybe you've added pickup and delivery services, which introduces auto liability exposure. Perhaps you've expanded your retail space or upgraded to new equipment. Your insurance should evolve with your business. An annual review ensures you're neither over-insured and wasting money nor under-insured and exposed to catastrophic out-of-pocket losses.
A Business Owners Policy gives dry cleaners essential protection at a bundled price, but only when it's properly structured with the right endorsements for your specific operation. Take time to understand what's included, what's excluded, and what additional coverages your business truly needs. The upfront work pays off when you have the right protection in place before you need it.
