Last Updated: February 22, 2024, 11:49 am by TRUiC Team

Online T-Shirt Business Insurance

Getting insurance for your online T-shirt business is essential.

Online T-shirt businesses need to be protected against things like claims of product liability, trademark infringement, and breach of contract.

For example, someone could accuse you of appropriating their company’s logo design into yours or breaching a contract for supplies.

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 an Online T-Shirt Business

General liability insurance is — generally speaking — one of the most important insurance policies for online T-shirt businesses. 

Some of the risks general liability insurance covers are:

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

Online T-shirt businesses, like all businesses, face risks. As a result, many of them choose to supplement their general liability insurance with:

  • Data breach insurance: If your computer systems are hacked, this policy will cover legal fees and damages resulting from any information that’s stolen.
  • Workers’ compensation insurance: This policy is needed to protect any employees you hire from the cost and lost wages of any injury caused by work-related tasks.
  • Commercial auto insurance: If you have any company vehicles (e.g., for deliveries), this will cover legal fees and damages resulting from an accident.

The following are the primary types of insurance providers that sell business insurance:

  • Traditional brick-and-mortar insurers — Includes Hiscox, The Hartford, and Nationwide.
  • Online insurers — Includes Next and Tivly.

In general, small businesses may find that online insurers are a better fit because they’re cheaper due to their lower overhead. They’re also faster and more flexible.

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Cost of General Liability Insurance

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

Compare the average cost of general liability insurance for an online t-shirt business 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.

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Common Situations That General Liability Insurance May Cover for an Online T-Shirt Business

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Example 1: While a potential investor tours your place of business, she trips over a box, breaks an arm, and decides to sue you for damages. General liability insurance would cover your legal defense and any required settlement.

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Example 2: As your employee delivers a special batch of t-shirts to a neighboring business, he knocks one of their employees to the ground while carrying the boxes into the building. The other company’s employee breaks an arm in the fall and demands your business pay for her medical care. General liability insurance would cover her medical treatment.

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Example 3: A competitor sues your business for libel. While you disagree with the accusation, you know you need to hire an attorney to protect your business. General liability insurance would cover your legal fees and any required settlement.

Other Types of Coverage T-Shirt Businesses 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 the equipment, supplies, and inventory you maintain for your t-shirt business. 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 products and equipment stored there.

Product Liability Insurance

While you strive to sell a quality product that satisfies your customers, there’s always a chance someone might decide your product caused them harm. In the event of a lawsuit, product liability insurance would cover your legal fees and any required settlement.

Workers’ Compensation Insurance

If you have any employees, most states will require you to carry workers’ compensation insurance for your part-time and full-time workers. 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 workplace accident.

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 t-shirt business:

  • 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.

Online T-Shirt 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.

Yes. Obtaining business insurance prior to the launch of your online T-shirt business is vital for its long-term financial protection.

Not only does it keep you safe from the financial consequences of the many risks of running a business, but it also enables your business to comply with legal requirements for certain types of insurance (e.g., workers’ compensation and commercial auto insurance).

Not necessarily. Certain exceptions may be written directly into your t-shirt business 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.