5 Key Insurance Policies For Your Tailoring Business

Tailoring businesses may run smoothly overall, but even low-risk operations benefit from thoughtful insurance coverage. When you’re caring for customer garments or using specialty equipment, the right policies provide peace of mind and help your business stay protected and professional.

Whether you run a stand-alone shop or offer tailoring services within a department store, having the right insurance policies can protect your livelihood from costly disruptions. 

Below, Deidra Hoschak, senior small business underwriter at Central Insurance, gives helpful advice on some of the core essential coverage areas that tailoring businesses may consider.

“Bailee Coverage” is a Must-Have for Tailoring Businesses

A cornerstone of insurance for any tailoring operation is bailee coverage, a type of inland marine insurance that covers risk of loss to customer property in your care, custody, or control. 

“This can be one of the biggest exposures for a tailor,” Hoschak explains. “If a customer brings in a wedding dress or tuxedo and it’s damaged or destroyed in a fire, it may only have limited coverage if under many base property insurance policies, because you don’t own it. That’s where bailee coverage comes in to help bridge that gap.”

Bailee coverage steps in for both covered accidental damage for a single customer and covered catastrophic loss scenarios for multiple customers. However, policyholders must set a coverage limit based on the average value of customer items on hand at any given time. 

“You need to be realistic about what’s coming through your shop,” Hoschak notes. “A fire could wipe out everything, and bailee coverage will help make your customers whole.”

She also emphasizes the importance of talking with your local independent Central agent as they can help tailor coverage to your business’s specific needs and ensure you’re properly protected.

Business Personal Property Coverage Protects the Tools of Your Tailoring Business Trade

Tailoring shops often use specialized or industrial-grade equipment that can be financially cumbersome to replace. You may want to consider carrying business personal property (BPP) coverage, which can be a part of your base commercial property policy to account for items like:

• Sewing machines (standard or industrial)
• Irons and ironing stations
• Specialty scissors and cutting tools
• Threads, buttons, and other supplies
• Computerized sewing systems or tailoring software
• Most personal property used in your tailoring operations on-premises

“All of these tools are essential to your operations,” Hoschak says. “If there’s a fire, theft, or other covered damage, you want to ensure you can get back to work quickly.” 

You can also supplement BPP coverage with equipment breakdown coverage for some electrical, mechanical or boiler/pressure vessel losses. Hoschak recommends discussing what is included in this coverage with your licensed Central agent.

Real-Life Scenario: A fire breaks out in your shop after hours. Not only are your machines and tools destroyed, but so are dozens of high-value garments waiting to be picked up. Or you accidentally scorch a customer’s designer suit while pressing it before pickup. In both examples, Bailee and Business Personal Property coverage could help keep your business viable and help prevent costly claims.

General Liability Provides Protection From Customer Accidents

Although tailors don’t typically have high foot traffic, there’s still potential for customer injury. A slip on a wet floor or tripping over a mat could result in a claim. Or imagine a customer slips while walking into your store and fractures their wrist. You could be held liable for their injuries. 

General liability insurance can help protect your business against bodily injury and property damage claims brought by third parties.

Hoschak points out, “Even if you only see a few walk-ins, it only takes one incident to lead to a lawsuit. General liability is still fundamental coverage.”

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Business Income Insurance Can Keep Your Tailoring Business Afloat After a Loss

If your tailoring shop suffers a covered loss, like a fire or structural damage from a vehicle, business income insurance can help cover lost net income during the slowdown in business operations due to covered physical damage. This protection is especially important during high-demand seasons such as prom or wedding, when missing even a few weeks of operation could mean thousands in lost business.

“Tailors may not have warehouses or large inventory, but losing access to their workspace can be devastating,” Hoschak explains. “Business Income insurance can help bridge the gap for a slowdown of business operations during the period of restoration for direct physical damage.”

Why a BOP Can Work Well for Tailoring Businesses

A Business Owner’s Policy (BOP) can offer a convenient and cost-effective insurance solution for many tailoring shops. 

What is a BOP? A BOP bundles two essential coverages—general liability and commercial property—into one streamlined policy. 

This combination can be especially beneficial for tailoring businesses that operate out of a physical location and work directly with customers and their belongings.

Where the general liability portion of the package covers third-party claims—such as a customer slipping in your shop—commercial property can provide financial protection for your sewing machines, tools, and shop fixtures in case of fire, theft, or other covered losses. 

Did You Know: Many BOPs allow for valuable add-ons, such as bailee coverage or business income protection, providing the right balance of coverage and affordability for small businesses.

Optional Tailoring Business Coverages to Consider

Beyond the essentials, there are optional policies that may be worth evaluating based on your specific business needs:

• Computer Coverage: If your tailoring shop uses design software or specialized sewing programs, standard Business Personal Property coverage might not offer adequate protection for your computer hardware and software. Consider a policy that specifically covers computers, related equipment and software.
• Commercial Auto: While most tailors don’t offer delivery services, if you transport garments to clients or retailers, you may need commercial auto insurance—even if you’re using a personal vehicle.
• Cyber Liability: If you collect customer data or take credit card payments, cyber liability insurance can help protect you from data breaches, ransomware, and other cyber threats.

Tailor-Made Insurance Protection With Central

Tailoring may be a niche market, but that doesn’t mean your coverage should be an afterthought.

“Central is a coverage company,” Hoschak explains. “We’re not going to skimp on what you need. We work with expert, hand-selected agents who will do their best to ensure you’re protected based on your unique exposures.”

When it comes time to review or purchase business insurance, tailoring shop owners should look beyond just the basics. Start by assessing the unique details of your operation—do you handle high-value garments, offer alterations for special events, or store customer items for extended periods? These factors can influence the type and amount of coverage you may need.

It’s also important to consider how your business might grow. Will you expand into retail sales or add employees? Are you investing in new equipment? Your insurance should evolve with your business.

That’s where Central makes a difference. With decades of experience insuring small businesses, Central offers flexible policy options and expert guidance through our trusted network of independent agents. When you work with a Central agent, you’re not just buying a policy—you’re gaining a partner who understands your industry and helps you build protection around what matters most. 

Talk to your local Central agent today to review your current policies and ensure you’re covered for what’s next.