Last Updated: February 21, 2024, 1:31 pm by TRUiC Team

Clothing Line Business Insurance

Getting business insurance for your clothing line is essential.

Clothing lines need to be protected against claims involving events like failing to satisfy contractual duties, infringing upon a trademark, or making misleading and false claims. 

For instance, if your business made a claim about the quality of its clothing that fraudulently misrepresented it, you may be required to pay damages as compensation.

We’ll help you find the most personalized and affordable coverage for your unique business.

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Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Clothing Line

General liability insurance is — generally speaking — one of the most important insurance policies for clothing lines. 

Some of the risks general liability insurance covers are:

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

The unique set of risks that clothing line businesses face could extend beyond the scope of general liability. You may need additional coverage in order to be fully protected. Some other policy types that you may be required to carry include:

  • Product liability insurance: This will protect you financially in the event that a customer sues your business because your product has injured them.
  • Workers’ compensation insurance: In the event that an employee hurts themselves or falls ill while at work, this insurance protects both your business and the employee from financial fallout.

When looking to acquire insurance, there are two routes available to you: traditional insurers with physical storefronts or purely online insurers. 

We recommend online-based insurers, as they can offer insurance attuned to your needs more affordably and more quickly, thanks to AI and reduced overhead.

Let's Find the Coverage You Need

The best insurers design exactly the coverage you need at the most affordable price.

Cost of General Liability Insurance

On average, clothing lines in America spend between $350 - $750 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a clothing line to other professional industries using the graph below.

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.

A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

Graph showing average price of general liability insurance prices per industry

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Find the Best Rate

Discover the best coverage at the lowest rate in our cheapest business insurance review.

Common Situations That General Liability Insurance May Cover for a Clothing Line

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Example 1: While touring your facility, a visitor trips over a cable, breaks an arm, and decides to sue your company. General liability insurance would cover your legal defense costs and any required settlement.

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Example 2: When your employee accidentally knocks a visitor to the ground, the visitor breaks his tailbone and asks you to pay for his medical treatment. General liability insurance would cover the injured visitor’s medical bills.

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Example 3: A competitor sues your business for libel. While you’re uncertain why she believes you libeled her business, you know you need a lawyer. General liability insurance would pay for your legal defense.

Other Types of Coverage Clothing Lines Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:

Commercial Property Insurance

You made a major investment in your equipment, supplies, inventory, and real estate. In the event of a fire, theft, or natural disaster, commercial property insurance would cover the cost of repairing or replacing your business-related property. This includes structural damage to your building as well as the business materials you store there.

Workers’ Compensation Insurance

Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability or death benefits stemming from a work-related accident.

Product Liability Insurance

While you strive to ensure your clothing products satisfy your customers, there’s always a chance someone might claim one of your products caused them harm. In the event of a lawsuit, product liability insurance would cover your legal fees and any required settlement.

Commercial Umbrella Insurance

While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.

Here are several things you can do to better protect your clothing line:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Maintain your corporate veil.

Clothing Line Business Insurance FAQ

Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.

A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Before starting a clothing line, be aware that it is likely you will be legally required to carry insurance of some kind.

Even if it is not necessary for your specific situation, it is always worthwhile investing in the best clothing line business insurance before you set up your business.

Not necessarily. Certain exceptions may be written directly into your clothing line insurance policy, and some perils may be entirely uninsurable.

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.