What Insurance Do You Need for Your Clothing Business?


The benefit of working in fashion retail is that you can run your company exactly how you want. Insurance may not be as glamorous as the clothes you make, but it can provide you with the security you need to expand your retail empire.


As a retailer, you should think about public and product liability insurance. Whether you interact with your customers in person or only sell online, product liability insurance is essential to protect you from claims. If a child choked on a loose button from a garment you sold, product liability would cover any compensation and court fees if legal action was taken. Additionally, you should also think about disability insurance for self employed individuals. Your business is your livelihood and you’ll want to be sure that you are financially protected in the event of something happening that prevents you from working.


Business insurance is intended to protect the financial assets of a business owner. It is an essential investment for a clothing line business. This article will discuss the primary insurance coverage for clothing lines. We will discuss general liability insurance, as well as other policies that are appropriate for this industry. 

  1. General Liability Insurance 

Every business, regardless of industry, faces risks that should be insured. General liability insurance is the most common and comprehensive type of policy that business owners purchase.


The following are some of the risks that general liability insurance protects against:


  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury


While general liability insurance is not legally required for businesses, operating without it is extremely risky. If your company is sued, you could face fees in the hundreds of thousands of dollars (or even more). 


The only way to prevent this type of event from destroying your clothing business is to have a sufficient general liability insurance policy in place. It will greatly help to compensate for these damages.


  1. Commercial Property Insurance

You put a lot of money into your supplies, inventory, equipment, and real estate. This is usually an important part of your selected supplier sourcing strategy


Commercial property insurance would cover the cost of repairing and maintaining your business-related property. For example,  in the event of a fire, theft, or natural disaster, this insurance will get you covered. This also applies to structural damage to your building as well as damage to the business materials stored there.

  1. Workers’ Compensation Insurance

Workers’ compensation insurance is required in most states for businesses with both part-time and full-time employees. This coverage protects your employees in the event that they are injured at work or become ill as a result of a work-related accident. 


It covers not only an employee’s medical bills and lost wages if they require time off to recover, but also any disability or death benefits resulting from a work-related accident.

  1. Product Liability Insurance

While you work hard to ensure that your clothing products satisfy your customers, there is always a bad possibility. For example, someone will claim that one of your products harmed them. In the event of a lawsuit, your legal fees and any required settlement would be covered by product liability insurance.

  1. Commercial Umbrella Insurance

While most claims are covered by your general liability insurance policy, some accidents or lawsuits may be so severe that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from having to pay legal fees. It also covers the awarded damages that exceed the limits of your primary policy out of pocket.

  1. Personal Accident Insurance

Personal accident insurance pays out if anyone in your company between the ages of 16 and 75 is unable to work due to an accident. Whether in a business or personal capacity. If there is an accidental loss of limbs or sight, an accidental death, or if someone in your company becomes permanently disabled as a result of an accident, the insurance will pay a lump sum amount.


If someone in your company is unable to work due to a temporary injury, it will also pay their normal net weekly earnings for up to 104 weeks after 7 days. After you’ve completed your quote, you can add Personal Accident as an add-on.


  1. Cyber Insurance

Cyber insurance should be considered if you have sensitive customer data, process payments online, or simply want peace of mind. This is because cybercriminals can be as astute as they are cunning. 


Catching you off guard and duping you into doing something you shouldn’t is how they may damage your business. This includes opening an attachment in a bogus email or breaching your cyber-security. If this occurs and they gain access to your data or bank account, the consequences for your business could be disastrous.


However, with the right Cyber protection, you can contact the experts 24 hours a day, seven days a week. The right team will be there to help you stay in business and recover in four ways after a cyber incident:


  • Recover financially
  • Compensation for loss of business income.
  • Covering recovery costs (computer system repair or data restoration).
  • Covering fines (where permitted by law) and compensation costs incurred as a result of a data breach.


  1. Commercial Auto Insurance

Your employees may be the safest drivers on the road, but they must still share the road with other drivers. An accident could result in the injury of another person or the totaling of your delivery truck or another company-owned vehicle.


A car accident could cause long-term financial harm to your small business. Especially if it results in a lawsuit. When the potential cost of an auto accident is compared to the premium for commercial auto insurance (about $140 per month for small businesses), it’s clear which is the better deal.


For business-owned vehicles, commercial auto insurance is usually required. It pays for damages if your mobile boutique truck, delivery van, or any other vehicle is involved in an accident.

Some Additional Steps 

Although investing in business insurance is simple (and necessary), it should not be your first line of defense. Yes, insurance will compensate your clothing company for financial losses incurred as a result of an incident, but it is far preferable to avoid losses altogether.


With this in mind, here are a few steps you can take to better protect your clothing company:


  • Make use of legally binding contracts and other business documents.
  • To protect your personal assets, form a limited liability company (LLC) or a corporation.
  • Keep your business licenses up to date.
  • Streamline the internal processes of your company. According to many clothing experts such as oem apparel, it will remove unnecessary variables from common tasks. Not only this but it will also create a secure, consistent environment in which to conduct business.
  • If your company is an LLC, you should look into LLC insurance.