Self-Employment Business Insurance Guide UK — What Cover Do You Need? The types of business insurance available in the UK, which ones are legally required, and how to choose the right cover for your business.
25 September 2025
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3 min read
Business insurance protects your livelihood — from client claims to equipment damage to legal disputes. Some cover is legally required; other types are strongly recommended or practically essential for winning clients.
Types of Business Insurance Insurance Type What It Covers Required? Employers’ liability Employee injury/illness claims Yes (if you have employees)Professional indemnity (PI) Claims of negligent advice/service Often required by clients/regulators Public liability Injury/damage to third parties Not legally, but practically essential Product liability Claims from products you sell Essential for product businesses Cyber insurance Data breaches, cyber attacks Increasingly important Business contents Your equipment, stock, furniture Recommended Business interruption Lost income if you cannot trade Recommended Key person Loss of a critical person in the business For partnerships and businesses with key individuals Directors’ and officers’ (D&O) Personal liability of directors For limited companies
Who Needs What? By Business Type Business Type Essential Cover Recommended Freelancer (service)Professional indemnity Public liability, cyber Sole trader (trades)Public liability Employers’ liability (if staff), tools cover Limited company Employers’ liability (if staff), PI Public liability, D&O, business interruption Retail/e-commerce Product liability, public liability Business contents, cyber, business interruption Landlord Landlord insurance Rent guarantee, legal expenses
By Profession Profession Required/Expected Cover Accountants Professional indemnity (regulatory requirement) IT consultants Professional indemnity, cyber Builders/tradespeople Public liability (clients expect), employers’ liability Consultants Professional indemnity Therapists Professional indemnity, public liability Photographers Public liability, equipment Tutors Public liability, professional indemnity
Employers’ Liability Insurance Detail Requirement Minimum cover £5 million Who needs it Any business with 1+ employees Includes Temporary staff, casual workers, apprentices Excludes Family members (in some cases) Penalty for not having it Fine of up to £2,500 per day Display Certificate must be displayed (or available electronically) Typical cost £40–£200/year (low-risk office); £200–£1,000+ (trades/manual)
Professional Indemnity Insurance Detail Info What it covers Claims that your advice, designs, or services caused a financial loss Who needs it Anyone providing advice, consultancy, design, IT, or professional services Required by FCA (financial advisers), RICS (surveyors), RIBA (architects), SRA (solicitors), many clients Typical cover £100,000–£5 million Typical cost (sole trader) £100–£500/year Typical cost (small company) £300–£1,500/year
Examples of PI Claims Scenario Claim IT consultant’s software crashes client system Client claims for lost revenue Accountant makes error in tax return Client claims for penalties incurred Designer’s work infringes copyright Rights holder sues for damages Consultant gives incorrect strategic advice Client claims for resulting losses
Public Liability Insurance Detail Info What it covers Injury to a member of the public or damage to their property caused by your business Who needs it Any business with customer/public contact Typical cover £1 million–£10 million Typical cost £50–£300/year (low risk); £200–£1,000+ (higher risk)
Examples of Public Liability Claims Scenario Claim Customer trips in your premises Medical costs, compensation Plumber floods client’s kitchen Repair and damage costs Event organiser’s structure collapses Injury claims
Cyber Insurance Detail Info What it covers Data breaches, ransomware, system failure, GDPR fines Who needs it Any business handling personal data or relying on IT systems Typical cover £100,000–£1 million Typical cost £150–£1,000/year Why it’s growing Cyber attacks on small businesses are increasing dramatically
Saving Money on Business Insurance Strategy Detail Combined policies Bundle cover types for one premium Higher excess Increases the amount you pay per claim Shop around Compare at renewal — don’t auto-renew Reduce risk Better security, procedures, and record keeping Annual payment Usually cheaper than monthly Trade/professional body discounts Members often get discounted rates
Making a Business Insurance Claim Step Action 1 Notify your insurer immediately (do not wait)2 Do not admit liability — let the insurer handle it3 Document everything — photos, contracts, correspondence4 Cooperate with the insurer — provide information they request5 Keep trading — maintain your business as normally as possible
For related guidance, see our self-assessment guide and registering as self-employed .