What insurance do I need for my limited company?

Not the most exciting, but it’s useful to know which policies are required legally & which are optional but encouraged. 

What insurance policies are legally required?

Employers’ Liability Insurance:

This is the only policy you are legally required to have as a small business in the UK if you have any employees. The purpose of this insurance is to cover any legal and/or compensation costs if an employee claims they have suffered illness or injury by working for your company.

You can receive fines of up to £2,500 from the Health and Safety Executive (HSE) each day you go unprotected.

Other insurance policies to consider

Public Liability Insurance:

This is another common insurance policy among new businesses and is required for certain businesses, such as those that have contracts with the government. If you attend a conference or trade fair. It’s likely that you’ll need this as a requirement of exhibiting. This covers costs for any accidents that cause injury or property damage to a member of the public. 

Professional indemnity insurance:

This insurance mainly applies if you give advice (in an area like accounting or legal services). This insurance covers any issues in case your recommendations lead to sub-optimal outcomes for clients. 

Tax investigation insurance:

HMRC often launches inquiries into business tax compliance. In our experience, these can be into 'First Period VAT Repayments', R&D, PAYE and Corporation Tax. This may be due to your business in a high-risk industry or from past accounting errors. Investigations can lead to £1,000s of additional costs, so tax investigation insurance is an important consideration.

Directors’ and officers’ liability insurance (D&O)

If you are a founder or director, it is worth considering D&O insurance. This is different from protecting the business as a whole. It covers costs for any claims against you personally. These could relate to errors in financial reporting, misadministration of the company pension, or breaching health and safety laws.

Cyber liability insurance:

Often in cyberattacks, your systems will be held to ransom unless you pay the hackers. Cybersecurity insurance will allow your insurer to engage & negotiate with hackers to help defend against ransomware attacks, as well as cover data breach liabilities up to the guided limits. 

The following are all less common forms of insurance. 

Company equipment insurance:

This largely covers for the cost of all high-value items your business has, such as laptops, phones, furniture and other office equipment.

Product liability insurance:

This covers any damage or injury caused by a product you sell. It is important to consider when selling physical products, but less appropriate for service businesses.

Motor Insurance:

If your business owns any vehicles (cars, vans, trucks etc) then motor insurance is legally required.

Property & Intellectual Property Insurance:

This type of insurance is applicable if your business owns any buildings or if you hold any inventory. It also can be in place to cover legal costs associated with defending any patents, trademarks, copyrights or trade secrets.

How do I get insurance for my new business?

There are many providers available online. Make sure to take your time and shop around for someone that can offer an insurance plan tailored to your business-specific needs. The list of policies is endless. But a reputable provider will work with you to ensure you know which are most applicable to you. We’ve historically gone with Hiscox because a friend incurred a very niche claim and they did not try to wheedle out of covering the loss.