Business insurance

If you operate a business in the UK, you probably need to carry insurance. Here's what you'll need to do and what you need to know.

Brendon Christian

Reviewed by Brendon Christian of Christian. The Law Firm*

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What is business insurance?

Your business faces a number of risks every day. Business insurance helps control these risks so that if problems do come up you can minimise the damage to your business.

Employers’ liability insurance

If your business has employees you’re required by law to have employers’ liability insurance to cover at least £5 million. This insurance must cover all types of employees (ie part-time, full-time, contract, as well as temporary staff).

Employers’ liability insurance covers the cost of compensating employees if they’re injured at work, or become ill because of the work they do, as well as covering their legal fees.

Third party motor insurance

If your business uses motor vehicles you’re required by law to have third party motor insurance to cover at least £1 million for property damage and an unlimited amount for personal injury. This insurance covers the cost of paying someone’s claim if they’re injured or their property is damaged because of an accident you or your employee caused.

Driving without insurance is a serious offence which can result in your vehicle being destroyed, you or your employee being disqualified from driving and/or being charged with a fine of up to £5000.

Public liability insurance

This insurance covers the cost of compensating members of the public for death, injury or damage to their property which happens because of you or your employees’ negligence. ‘Members of the public’ include anyone who isn’t your employee, including people visiting your business or people involved in or watching activities you have organised.

Professional indemnity insurance 

If your professional advice causes clients to lose money, this insurance will cover the cost of compensating them for their loss. Industry regulators may already require professionals such as accountants, financial advisers and solicitors to have this form of insurance.

Product liability insurance

If there’s a fault in a product you design, manufacture or supply and, because of this, someone is injured or their property is damaged, this insurance covers the cost of compensation. 

Environmental liability insurance

If your business causes damage to land, water, protected plants or animals or their habitats this insurance will cover the cost of repairing such damage.


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