What Insurance Does Your Small Business Need?
Business insurance can help with costs such as an injury claim, stolen tools or damage to your premises. The cover you need depends on what you do, where you work and whether you employ anyone. Start with those details, then ask an insurer or broker to explain the options for your business.
Updated: 7 September 2026.
Insurance you may be required to have
If you employ people, employers’ liability insurance is normally a legal requirement. It must usually provide at least £5 million of cover from an authorised insurer. There are limited exceptions, so check the GOV.UK employers’ liability guidance for your circumstances, including the certificate requirements.
A customer contract, landlord or professional body may also require particular cover. Keep a note of the insurance type and amount required when asking for quotes.
Common types of cover
- Public liability: claims that your work caused an injury or damaged someone else’s property. For example, a customer might trip over equipment you left out.
- Professional indemnity: claims that your advice, design or professional service caused a client to lose money.
- Buildings, contents, tools and stock: cover for property and equipment. Check where items can be kept and whether they are covered away from your premises.
- Business interruption: cover for lost income or extra costs when an event covered by the policy disrupts your business.
- Product liability: claims involving products you make, supply or sell.
- Cyber insurance: certain costs following incidents involving computer systems or data. You still need appropriate security and backups.
Other policies cover things such as commercial vehicles or legal expenses. Ask which are relevant to your work. The policy wording explains what each one covers and excludes.
Tell the insurer about your work
Describe all the activities you carry out, including occasional jobs. Mention where you work, the people involved, any subcontractors and previous claims or incidents when asked. Check that the insurer’s description is accurate.
A business may need both public liability and professional indemnity. They deal with different kinds of claim.
Questions to ask when comparing policies
- What work and locations are covered?
- What is the most the policy will pay for one claim and in total?
- What is the excess—the amount we pay towards a claim?
- What is excluded, and are there conditions we must meet?
- Are legal defence costs included?
- Does the price include tax, and does paying monthly cost more?
For tools and stock, check whether the amounts are enough to replace them. For business interruption, ask how the income figure is calculated and how long payments could continue.
Keep the cover up to date
Tell your insurer or broker when your work, staff, premises or other relevant circumstances change. Keep the certificate, policy details and claims number together.
If something happens, prevent further harm where safe, keep evidence and contact the insurer promptly. Follow its claims instructions before agreeing payments or accepting responsibility.