PUBLISHED IN JUNE OF 2024

Are you a multiple Laundromat owner and have a single policy for all your stores? If you elected to buy a single policy for all your locations, it’s likely a “bundled” coverage for which you take a risk and receive a lower premium. If you’re leasing your store you may be in violation of your lease agreement. Your required insurance coverage is likely spelled out in detail in your lease. Normally a policy will require certain liability levels (coverages, such as 1million/2million) and sometimes certain strengths of the companies providing the coverage.

Here’s the rub on bundled policies: the 1million/2million limit of liability applies to all the stores you have insured on this one policy (i.e. all locations). It is NOT an individual limit that applies per location. All locations share the limit.

To provide a little more context, you have two liability limits when it comes to the GL coverage…

You have the occurrence limit and the aggregate limit - Your policy has a $1,000,000 occurrence limit & $2,000,000 aggregate limit:

  1. Occurrence limit of liability refers to the maximum amount an insurance policy will pay for a single occurrence or event. This means that if multiple claims arise from a single event, the occurrence limit of liability will apply to each individual claim.

  2. On the other hand, aggregate limit of liability refers to the maximum amount an insurance policy will pay for all claims that occur during the policy period. This means that if multiple claims arise from different events, the aggregate limit of liability will apply to the total amount paid out for all claims combined.

In summary, occurrence limit of liability applies to individual claims arising from a single event, while aggregate limit of liability applies to the total amount paid out for all claims during the policy period. So if you make two claims in any one year, regardless of the amount of the claim, you’ve used up your liability insurance coverage and you are now self-insuring and are at risk from another claim that might happen that year at any other store you might insure under this policy.

Remember you likely signed a contract (lease) promising to coverage the coverage demanded by the Landlord. If you’re sharing the total coverage with others stores you own you are already in violation of your lease and subject to lease cancellation. Depending on your lease terms you may not have an option to recover if you’re caught in this situation. Just something to consider and review with your insurance agent. Hope this helps someone.