About General Liability Insurance

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).

Some of the risks CGL insurance covers are:

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

While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.


Learn more about the risks covered by general liability insurance.

Example 1: A client is bringing over some clothing for alterations when she slips and falls in your entryway. She sustains a broken arm and requires medical care. Your general liability insurance policy will likely cover the cost of her treatment.

Example 2: One of your employees leaves a window open overnight while your business is closed. It rains heavily, and the rain comes through the open window and soaks a stack of designer clothing owned by several of your customers. The clothing is ruined. Your general liability insurance policy will pay for the replacement of damaged customer property.

Example 3: While visiting your place of business for measurements, a client slips and falls off of a stool. She breaks her hip and sues your business. The general liability insurance policy you have will pay for your legal defense, including the cost of settling out of court if necessary.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

Cost Of General Liability Insurance

The average sewing business in America spends between $400-$1,500 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:

Graph showing average price of general liability insurance prices per industry

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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Other Types Of Coverage Sewing 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 other types of insurance all sewing businesses should obtain:

Commercial Property Insurance

The sewing equipment and supplies you have in your business are necessary for you to serve your customers and keep income coming in. But if that property is destroyed, in an event such as in a fire, it may be difficult to replace due to its high cost. A commercial property insurance policy would help pay for the replacement of your commercial property.

Product Liability Insurance

The products you sew and then sell to your customers pose a liability that product liability insurance can help protect you from. If the customer determines that your product caused him or her an injury and files a lawsuit, product liability insurance will pay for your legal defense and any settlements that may be required.

Types Of Coverage Some Sewing Businesses May Need

In addition to the policies outlined above, there are a few other types of coverage your sewing business may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Workers’ Compensation Insurance

If you have employees helping you with your sewing business, it is important to have workers’ compensation insurance. It will pay for treating employee injuries due to work-related activities and will help pay for lost wages while they recover from those injuries. Most states require employers to carry workers’ comp.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.

With this in mind, here are three things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
  • Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.