Limited coverage was initially breaking SIM cards of similar design (8)
I believe the answer is:
swimsuit
'limited coverage' is the definition.
'was initially breaking sim cards of similar design' is the wordplay.
'initially' suggests taking the first letters.
'breaking' is an insertion indicator.
'cards of similar design' becomes 'suit'.
The initial letter of 'was' is 'w'.
'w' put into 'sim' is 'swim'.
'swim'+'suit'='SWIMSUIT'
(Other definitions for swimsuit that I've seen before include "Bathing-costume" , "Outfit for a dip" , "bikini" , "Beach wear" , "Beachwear" .)