Growing Environmental Concerns and Dry Cleaning Insurance


Dry cleaning insurance

Dry cleaning insurance

With global concerns over the environment and the many dangers associated with industrial plants and companies that pollute the air we breathe and the water we drink, those in the dry cleaning industry face challenges in running a clean and efficient business.


While contamination of the environment is often associated with dry cleaners, a service that many Americans use daily, something has to be done to reduce toxins being released into the air.


Unfortunately cleaning up the solvents that have contaminated our groundwater aquifers can cost millions of dollars. Because the property owner is often liable, they need dry cleaning insurance to pay for the cleanup.


While comprehensive statistics aren’t available, an Arcadis Geraghty & Miller survey of insurers estimates that more than 70 percent of past and present dry cleaners were responsible, either accidentally or intentionally, of having released chemicals into the soil or groundwater, and the cleanup costs range from tens of thousands of dollars to several million dollars.


Retail property owners concerned about these risks


The downside is that many retail property owners and managers now refuse to lease to dry cleaners with on-site plants in order to avoid the potential environmental hazards these tenants present, including photo-processing shops and gasoline service stations. While many operators of these facilities handle and dispose of their chemicals in full compliance with state and federal laws and regulations, the few that do not can do immeasurable damage.


Fortunately, dry cleaning equipment technology and hazardous waste handling have improved substantially over the last 10 years, so that releases are now less common.

However a surprising number of chemical releases into the soil and groundwater have occurred unintentionally from the leaking sanitary sewer lines into which many operators legally discharged their waste. Many of these releases occurred years ago when such disposal was legal and a standard practice of these facilities.


This liability leaves many property owners, managers, and brokers looking for new and better options. Recently, a variety of solutions, including state cleanup funds, guaranteed cleanups, and technology have emerged. One way that owners can help regulate tenants is to require them to use the latest dry cleaning equipment technology and require regular inspections by the property manager. For example, closed-loop technology has no air emissions (and produces no separator water) that could be disposed of down the sewer.


Insurance companies often require more extensive soil and groundwater investigation around potential contamination sources that are identified in a phase I environmental site assessment before they will provide the needed dry cleaning insurance coverage.