Dry Cleaning Insurance and Environmental Concerns

While environmental contamination is largely associated with industrial sites that deal in the disposal of a lot of toxins and chemical wastes, dry cleaners suffer from some similar issues due in part to the chemicals used in their industry. Annually the cost of cleaning up dry cleaning solvent that often ends up contaminating groundwater aquifers can be in the millions of dollars. This is a prime example of why operators of these establishments must purchase Dry cleaning insurance to deal with environmental issues.

Issues still spring from closed facilities

Approximately 35,000 retail dry cleaners operate in the United States, according to the Silver Spring, Maryland-based International Fabricare Institute (IFI) and reported on the CCIM Institute website. That figure doesn’t include a large number of former operations that often contributed to the problem. 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 accidentally or intentionally have released chemicals into the soil or groundwater, and the cleanup costs range from tens of thousands of dollars to several million dollars, averaging about $500,000 per cleanup.

As a result of these concerns, many retail property owners and managers are reluctant to lease to dry cleaners with on-site plants, avoiding other potentially environmentally hazardous tenants as well, including gas stations and photo-processing shops. Despite the bad news, many of these facilities handle and dispose of their chemicals in full compliance with state and federal laws and regulations, and improved waste handling methods in recent years has also helped tremendously.

Dry cleaners are often mistakenly blamed for releases

A surprising number of chemical releases into the soil and groundwater have occurred unintentionally due to leaking sanitary sewer lines (which flow to wastewater treatment plants). Many operators have legally discharged their waste but are sometimes deemed responsible for releases that occurred years or even decades ago when such disposal was standard practice and was done legally.

While municipalities should, in some cases, share some of the legal responsibility for cleanup of leakage from sewers that they own under city streets, the property owner often ends up liable, simply because many cleanups result from operations that no longer are in business or operations that have insufficient assets to cover the cleanup liability. Dry cleaning insurance helps pay the costs of the problem while the industry awaits further solutions, including state cleanup funds, guaranteed cleanups, and new technology that will hopefully emerge.