The industrial laundry sector is one of the UK's least visible high-risk industries. Despite employing more than 24,000 staff and processing more than 50 million pieces of laundry a week, its insurance needs are often poorly understood.
Commercial laundries process more than 90 per cent of NHS products and 95 per cent of hotel linens, according to the Textile Services Association (TSA), the industry's trade body. Yet despite that economic footprint, the sector receives relatively little attention outside the businesses that rely on it.
Lisa Fry, Director of Laundry Broking & Risk Management at Milsom Insurance Brokers in Ringwood, Hampshire, has spent more than two decades in the industry, with the last several years specialising in commercial laundry and textile services clients.
A wave of fires proved a defining moment for the sector. At its peak, Fry recalled the industry experiencing approximately 59 fires across the UK over a two-year period, driven primarily by spontaneous combustion. The surge prompted insurers to restrict capacity sharply, increase premiums and, in many cases, exit the market altogether.
Looking beyond insurance for answers, Milsom researched how heat-reliant industries monitor temperature risk, which led to the recommendation of thermographic cameras to clients via a TSA webinar. A further development came when a client introduced her to temperature probes originally developed for hay bales, which also carry spontaneous combustion risk. She contacted the manufacturer to adapt the technology for laundries, where the window between a load finishing and ignition can be as short as 30 minutes.
The TSA launched its own code of practice for fire safety management in commercial laundries in August 2025, acknowledging that the combination of heat, combustible materials and chemicals in the sector requires careful management to prevent fires. The prevention approach has coincided with a marked reduction in losses: Milsom's clients experienced four major fire losses in 2024, two in 2025, and, at the time of writing, none in 2026.
"I just want for our clients, for it to stop," she said. "Outside of the insurance, these are people that we know. This is their life work investment and they could lose it all overnight."
The fire crisis is only part of the picture. Fry argued that broader coverage and placement failures were widespread across the sector, not because of bad faith, but because brokers and underwriters without specialist knowledge often do not understand the businesses they are writing.
"There's a big difference in the sector between a launderette and a laundry," she said. "If you don't understand the difference between the two, and we have had this from underwriters as well and surveyors, then how can you understand all of those risks behind it?"
When Milsom reviews a competitor's programme on tender, the team frequently finds the same problems: incorrect gross profit calculations, missing fixtures and fittings cover, absent business interruption extensions such as failure of utilities or specified customer cover, and clients unaware of the conditions on their own policy. Gross profit, she said, was both the most critical and most common error.
"You're just looking at the wage roll and then you're looking at the gross profit and the gross profit is less than the wage roll. And it's times that by 24 months, and you're thinking, this is going to be a problem because your policy is basically not going to respond."
She has seen clients whose claims were repudiated due to sums insured and gross profit errors, despite having sought reassurance from their broker beforehand.
Those failures have become more consequential amid mounting financial pressure across the industry. The TSA's 2025 Hatch report on the economic value of the textile services sector highlighted downward pressure on prices, rising production costs and significantly higher energy bills. Against that backdrop, six of Milsom's laundry clients entered administration in 2025, with two further businesses doing so by mid-2026.
The lessons from major-loss experience in the laundry sector have broader implications for the industry. Fry argued that loss adjusters and assessors should be actively training account handlers and executives who have never dealt with major loss in what to look for when putting programmes together.
"I honestly think there needs to be a bit of a shake up," she said. "Policies are out there that have not been set up correctly. They're just floating under the radar because they haven't had a claim yet. And it's when they have a claim, Pandora's box has been opened."
A sector that once averaged dozens of fires a year has, through sustained risk management and specialist engagement, begun to reverse that record.
"Nobody knows when a loss is going to happen," she said. "If you're going to take out an insurance policy, it needs to be set up correctly and it needs to respond."
The laundry sector's shift from recurring fire losses to a more structured approach to risk management offers a clear example of the value of specialist knowledge.
