Running a laundry business in Perth is a bit like managing a controlled explosion. Whether you’re overseeing a trendy laundromat in Mount Lawley, a high-turnover hub in East Victoria Park, or a massive commercial facility in Osborne Park, your daily operations involve a volatile mix of high-voltage electricity, intense heat, and chemicals.
In the current insurance climate, the cold shoulder from underwriters and insurers is a very real thing. Laundry businesses are frequently red flagged as high risk. Getting a policy isn’t just about filling in a form anymore, it’s about proving to an insurer that you aren’t a fire waiting to happen. This guide breaks down why the industry is so nervous and how you can position your business to get the protection you actually need.
The Hard Market Reality
Before we dive into the nuts and bolts of risk, let’s talk about the elephant in the room: why is insurance so hard to find for laundries right now?
The insurance industry works in cycles. Currently, we are in a hard market for property heavy risks. I would note, we have begun to see some softening across the board, but for higher risk industries coverage can still be difficult. Because there have been several high profile fires in commercial laundries across Australia, many insurers have simply walked away from the sector. They see the word laundry and think possible severe loss. i.e. if a fire starts, its going to cause huge amounts of damage.
If you try to use a standard online quote tool for a shop in Glendalough or Wembley, you’ll likely find the submit button leads to an immediate decline. This is why the way you present your business, your risk profile is more important than the brand of your machines.
The Fire Factor: Spontaneous Combustion & Oily Hazards
If there is one thing that keeps laundry owners and insurers up at night, it’s spontaneous combustion. It sounds like something out of a Victorian novel, but it is the leading cause of fires in Perth’s laundry sector.
The Chemistry of a Claim
It usually starts with oily laundry, think tea towels from a cafe in Subiaco, massage towels from a spa in Burswood, or greasy overalls from a workshop in Canning Vale. If these items aren’t washed at the correct temperature with the right detergents, residual oils remain trapped in the fibres.
When these items hit the dryer, they get hot. If they are removed while still warm and folded or piled into a skip, the heat stays trapped in the middle of the pile. This triggers an oxidation reaction. The temperature inside the pile rises and rises until it hits the auto ignition point. By 3:00 AM, your shop is a shell.
Risk Management Tip: The Cool-Down Cycle: Never, ever bypass the cool-down cycle on your dryers. It is there for a reason.
- Don’t Pile it High: Ensure staff (or signage for customers) understand that warm laundry should be spread out to breathe, not stacked in a mountain.
Electrical Wiring: The Silent Strain
Perth is a city of contrasts. We have brand new industrial estates in Hazelmere, but many of our laundromats sit in older, character shopping strips in areas like Maylands or Wembley Downs. These older buildings weren’t designed to handle the massive electrical draw of modern commercial extractors and dryers.
Thermal Stress and Arcing
When you run multiple machines simultaneously, the stress on your switchboard is immense. Old wiring can become brittle, and loose connections can lead to arcing or small electrical jumps that generate intense heat.
Insurers now almost universally demand proof of electrical safety. If you haven’t had a Thermal Imaging (Infrared) scan of your switchboard in the last 12 months, you are likely uninsurable in the top tier market. These scans identify hot spots that aren’t visible to the naked eye, allowing you to fix a $200 loose wire before it causes a $200,000 fire.
Maintenance: Beyond “Fixing What’s Broken”
Maintenance is often viewed as a chore, but in the eyes of an insurance underwriter, it’s a sign of a “blue-chip” risk.
The Lint Menace
Lint is the ultimate fuel. If it builds up inside the machine cabinets or, worse, inside the exhaust ducting, it creates a fuse that can carry a small spark through the entire building.
- Perth’s Coastal Salt: In suburbs like Scarborough or North Beach, salt air can accelerate the corrosion of external vent flaps and motor housings.
- Duct Cleaning: You should have a professional duct-cleaning certificate on file. If you can show an insurer a receipt for a professional clean every six months, you are instantly more attractive than the guy who does it himself with a vacuum.
Documenting the Process
A handyman approach doesn’t work for insurance. You need a maintenance log. When an insurer sees a documented history of belt replacements, motor servicing, and lint-screen checks, they see a business owner who cares. That translates to lower premiums.
Public Liability: Slips, Trips, and Perth’s Mop Log
While fire is the big catastrophe, Public Liability (PL) claims are the death by a thousand cuts. In self-service laundries in high-foot-traffic areas like Victoria Park, the risk of a slip-and-fall claim is constant.
Water on the floor is the enemy. It doesn’t matter if it’s a leaky hose or a customer spilling their detergent; if someone slips, you are often held liable.
- The Solution: Non-slip matting is a start, but a mopping log is better. If you can prove your staff (or cleaners) checked the floor at 10:00 AM, 12:00 PM, and 2:00 PM, you have a defensible position against a frivolous injury claim.
Why You Can’t Do This Alone: The Role of the Broker
Ten years ago, you could probably buy a policy for a laundromat over the phone with a generalist insurer. Those days are gone. Today, the front door is often locked to laundry operators.
This is where a skilled insurance broker, like the team at Delmont Insurance Group, becomes your most valuable business partner.
The Translator Effect
A broker doesn’t just buy insurance; they sell your risk to the underwriter. Imagine two applications on an underwriter’s desk in Sydney:
- Operator A: I have 10 machines in a shop in Morley. I think the wiring is okay.
- Operator B (Represented by a Broker): My client operates in Morley. We have attached a Thermal Imaging report from Jan 2024, a professional duct-cleaning certificate, and a photo of their cool down safety signage. They also have a monitored CCTV system that alerts the owner to smoke.
Operator A gets a No. Operator B gets a competitive quote.
Access to Specialist Markets
Many of the insurers who still cover laundries do not deal with the public directly. They only work through brokers. By working with a specialist, you gain access to wholesalers and London-based markets (like Lloyds) that understand the specific nuances of Western Australian industry.
Constructive Risk Management
A good broker won’t just tell you the price; they’ll tell you how to lower it. At Delmont, we help you identify the red flags before they reach the insurer. We might suggest upgrading a fire extinguisher or changing a chemical storage practice. It’s about making your business bulletproof so that when a claim does happen, there’s no room for the insurer to argue.
Business Interruption: The Forgotten Cover
If a fire happens at your Belmont facility, the property insurance pays for the machines. But who pays the rent while you’re closed for six months? Who pays your key staff so they don’t go and work for a competitor?
Business Interruption (BI) insurance is critical for laundries. Because laundry equipment is often specialised and imported, lead times for replacements can be months, not weeks. A standard 12-month indemnity period is often not enough. We recommend looking at 18 or 24 months to ensure you actually have a business to return to once the repairs are done.
Summary Checklist for Perth Operators
To ensure your insurance placement is as smooth as possible, start gathering this information now:
- Electrical Safety: A recent Thermal Imaging report of your switchboards.
- Fire Equipment: Proof that your extinguishers and blankets are serviced and tagged.
- Maintenance: A logbook showing lint-trap and duct cleaning.
- Contractual Risks: If you do commercial work, have your broker review the Indemnity clauses in your service agreements.
- Housekeeping: Photos of your chemical storage (must be in bunded/spill-proof areas) and Cool Down signage.
Summary
Insurance for the laundry industry is currently a high-friction experience. You can either fight it or lean into it. By treating risk management as a core part of your business strategy rather than an annoying box-ticking exercise, you not only protect your assets but also save significant money on premiums in the long run.
Don’t wait for your renewal notice to land on your desk to start thinking about this. The best time to clean up your risk is months before the underwriter sees it.
Is your current policy actually tailored to your operation? At Delmont Insurance, we specialise in the hard-to-place risks that keep Perth moving. Whether you’re a small local laundromat or a large-scale commercial laundry, we can help you present your business in the best possible light to the global insurance market.
Contact Delmont Insurance Group today on (08) 6184 8724 or via email at info@delmontinsurance.com.au.
Article written by James Wilson, Director of Delmont Insurance Group — a trusted adviser and specialist insurance broker