Business Insurance Checklist for UK Limited Companies

Legally Required Insurance

There is only one category of business insurance that is a statutory requirement for most UK limited companies: employers' liability insurance. You must hold at least £5 million of cover from an authorised insurer as soon as you have any employee — including in some circumstances a working director who is not a sole director. The certificate must be displayed or accessible to employees. Failure to hold valid cover carries a fine of up to £2,500 per day.

Certain sectors have additional mandatory requirements — for example, solicitors require professional indemnity insurance as a condition of SRA authorisation, and financial advisers require FCA-mandated cover. Check sector-specific requirements with your relevant regulator.

Commercial Property and Contents

If your company owns or leases commercial premises, insure the building (or confirm your lease requires the landlord to do so) and separately insure your contents, stock, and equipment. Standard policies exclude flood, subsidence, and business interruption unless specifically added. Check excesses carefully — a high excess on a contents policy can make small claims uneconomic to pursue.

• Confirm whether you insure buildings or the landlord does (check your lease)
• Value stock and equipment accurately — underinsurance voids or reduces claims
• Add business interruption cover to compensate for lost income if premises are unusable
• Check that portable equipment used off-site is covered

Professional Indemnity and Product Liability

Professional indemnity (PI) insurance covers claims arising from errors, omissions, or negligent advice in your professional services. It is essential for consultants, advisers, designers, IT firms, and any business where your work product could cause a client financial loss. Product liability insurance covers claims arising from physical goods you manufacture or supply causing injury or property damage.

PI policies are written on a 'claims-made' basis, meaning you must hold the policy both when the negligent act occurs and when the claim is made. Confirm retroactive cover dates with your broker.

Cyber and Data Insurance

UK SMEs are a frequent target for ransomware, business email compromise, and data breaches. Cyber insurance typically covers incident response costs, regulatory notification expenses, business interruption from a cyber event, and third-party claims. Check whether your existing commercial combined policy includes any cyber cover before buying a standalone policy — coverage often overlaps or conflicts.

• Check what data you hold and whether a breach would trigger UK GDPR notification obligations
• Confirm cover for both first-party (your own losses) and third-party (customer claims) cyber events
• Review the policy's requirements — insurers often require specific security controls (MFA, patching) to remain valid

Directors' and Officers' Liability

Directors' and officers' (D&O) insurance covers the personal liability of company directors and officers for wrongful acts in their management capacity — including employment disputes, regulatory investigations, and shareholder claims. Without D&O cover, personal assets of directors may be exposed. As a limited company, you are separately liable to the company, not just to third parties. Discuss appropriate limits with your broker in light of your company's size and sector.