Ask the experts: how to find the best business insurance for you

Insurance is essential for protecting your business but there’s no doubt it can be baffling territory – particularly for complex businesses or the newly self-employed. 

Lots of jargon, risk analysis, and different covers can leave many small business owners feeling confused. Not only that, it’s an expense for something you hope you’ll never need – but yet gives vital protection from everyday risks. 

This guide explains what to look for to help you find the right insurance and the right provider – with insight from our own in-house insurance experts to learn more about the process.

A step-by-step framework for identifying your cover needs

Before you start comparing quotes, working through these steps could help you understand what protection your business needs, avoid gaps in cover, and prevent you from paying for insurance you don’t actually need.

Step 1: Identify mandatory legal requirements

Employers’ liability insurance is usually required by law if you employ anyone – including part-time staff, temporary workers, and in most cases, volunteers. A main exemption is unincorporated family businesses where all your employees are family members.

And commercial motor insurance is legally required if you use any vehicle for business purposes. This includes using your personal car for work visits, deliveries, or transporting tools.

Step 2: Identify vehicle-related insurance needs

If you or your employees drive for work – whether that’s a delivery van, company car, or personal vehicle used for client visits – you or your employees will legally need appropriate business motor cover (which is separate to your business insurance). Consider:

• how many vehicles does your business use?
• do employees use their own cars for work purposes?
• are vehicles used to transport goods, tools, or passengers?

Step 3: Assess physical assets, stock, tools, and equipment

Calculate the total value of everything your business owns or is responsible for:

• tools and equipment you rely on daily
• stock and inventory
• fixtures and fittings
• computer equipment and technology
• goods in transit or storage

Remember: you need to insure items at their replacement value, not what you originally paid.

Step 4: Evaluate client interaction liabilities

Consider how your work could affect others:

• public liability – could a member of the public or client be injured because of your work? Could you damage someone else’s property?
• professional indemnity – do you give advice, designs, or recommendations that clients rely on? Could your professional services cause a client financial loss?
• product liability – do you manufacture, supply, or sell physical products?

For some professions, professional indemnity insurance is mandatory. For example, solicitors must hold public indemnity insurance as a condition of their Solicitors Regulation Authority authorisation and architects require it under Architects Registration Board rules.

Step 5: Calculate potential financial loss from business interruption

What would happen if you couldn’t trade for weeks or months? One way to identity potential financial loss is to complete a risk management framework, which can help you identify areas of risk in your business and plan accordingly.

For example, if you store customer data, take payments online, or rely on digital systems, cyber insurance deserves consideration.

Most common covers and average cover limits per trade

Trade	Most common covers	Average cover limits
Cleaner	Public liability	£1,469,258
	Personal accident	Set amount / Based on variables
	Employers’ liability	£10,000,000
Computer / IT	Professional indemnity	£1,468,520
	Public liability	£2,127,812
	Employers’ liability	£10,000,000
Consultancy	Public liability	£2,414,516
	Professional indemnity	£1,379,203
	Legal expenses	£100,000
Eating and dining	Trace and access	Set amount / Based on variables
	Malicious damage by tenants	Set amount / Based on variables
	Public liability	£2,255,474
Events	Public liability	£2,661,498
	Employers’ liability	£10,000,000
	Professional indemnity	£709,652
Financial / legal / insurance	Public liability	£1,616,784
	Professional indemnity	£719,671
	Employers’ liability	£10,000,000
Hair and beauty	Public liability	£1,624,743
	Goods in transit	Set amount / Based on variables
	Product liability	£2,397,434
Heavy construction	Public liability	£2,164,515
	Employers’ liability	£10,000,000
	Personal accident	Set amount / Based on variables
High street	Public liability	£2,598,321
	Product liability	£2,791,220
	Goods in transit	Set amount / Based on variables
Light construction	Public liability	£2,167,456
	Personal accident	Set amount / Based on variables
	Employers’ liability	£10,000,000
Maintenance, service, and repair	Public liability	£1,992,590
	Personal accident	Set amount / Based on variables
	Employers’ liability	£10,000,000

Based on proprietary Simply Business customer data, the table above breaks down the top three insurance covers most frequently selected by UK small businesses across some key trade sectors between August 2025-August 2026.

Simply Business has cover options to choose from. For example, public liability options range within one million, two million, five million, and 10 million.

The amounts represented here are numeric (mean) averages of all the cover levels seen among customers who purchased these products. Always check if your business is under any contractual or legal obligation to have a certain amount of a specified cover (usually public liability or employers’ liability). These figures are for representative purposes only.

Other optional cover

Below are some examples of optional covers and how they could suit your business needs.

Optional/discretionary (depending on your risk profile and needs)

Cover type	Consider if…
Tools cover	You own tools or equipment essential to your work
Business interruption	Lost income would threaten your ability to pay fixed costs
Cyber insurance	You store customer data, process payments, or rely on digital systems
Stock and contents	You hold inventory or business property
Personal accident	Your income depends entirely on your physical ability to work

How to choose the best insurance for your small business

Factor	What to consider
Covers	Think about all the potential risks you could face and choose the covers that your business needs. Some companies like Simply Business let you build a tailored quote so you only pay for what you need.
Reputation	Check online review sites like Feefo to find out more about how customers feel about different providers and insurers.
Compare	Compare quotes with different insurers to find a price and cover level that works for you.

Common mistakes when buying business insurance

Avoiding these pitfalls could save you significant problems if you need to make a claim.

Underinsurance

Underinsurance can be the most common and costly mistake UK businesses make. When you’re underinsured, insurers can apply the “average clause” to reduce your payout proportionally. If you’ve insured your tools for £5,000 but they’re actually worth £10,000, you may only receive half of any claim – even for a partial loss.

Choosing the wrong trade classification

Your trade classification determines your premium and what activities are covered. If you select a classification that doesn’t accurately reflect your work, your policy may not cover you when you claim.

Failing to declare subcontractors

If you use subcontractors and haven’t disclosed this to your insurer, you may find your cover doesn’t extend to their work – or that claims related to their activities are rejected.

Focusing only on price

The cheapest policy may not always be the right one. A policy with a lower premium may have higher excesses, lower limits, or exclusions that leave you exposed.

Not reviewing exclusions and limits

Hidden exclusions can mean your policy doesn’t cover the exact scenario you assumed it would.

Inaccurate disclosure

Disclosure in insurance is the bit where you tell your insurer about you, your business, and your business activities. This is what insurers use to determine the risk level of your business and what premium to charge. 

Choosing your cover – expert tips 

Insurance Product Manager at Simply Business, Greg Caswell-Smith, shares his expert knowledge on policy limits, disclosure accuracy, and the value of specialised cover.

Coverage and policy limits

All covers show limits to how much will be paid out in the event of a successful claim. Choosing a lower limit means you’ll only be covered up to that amount. But this can reduce your premium. A higher limit costs more but offers greater coverage. 

Greg says: “When choosing cover limits, don’t just focus on the premium. Think about the largest potential loss you could face. Factor in your biggest contract values, the total value of your assets, and the potential for multi-million pound personal injury claims.”

The cover limit you choose is up to you, but it’s a good idea to think about the cost of a worst-case scenario and how to protect your business if anything goes wrong. 

Accurate disclosure

Disclosure in insurance is the bit where you tell your insurer about you, your business, and your business activities. This is what’s used to determine the premium and risk level of your business. 

You’ll need to give accurate information on things like claims history, what your business does, location, employees, and some financial information. This can all impact your premium. 

Getting this right is essential to avoiding underinsurance – a key reason why some claims can get rejected.

Greg says: “Inaccurate disclosure risks invalidating your policy. 

“Under the Insurance Act 2015, businesses have a duty to make a ‘fair presentation of risk’. If you don’t tell the full and accurate story then you might not get the cover you need or risk a claim not being paid. You wouldn’t insure your Ferrari as a Fiesta, so don’t take that chance with your business.”

Specialised cover

Some insurers offer specialised cover to make sure the types of events covered by your business insurance are applicable and relevant to what you do every day. 

Greg explains: “Specialised cover ensures that the specific nuances of your trade, like professional advice for consultants or hot works for plumbers, are explicitly protected. If you’re not sure, contact a broker, tell them about what you do, and the covers you need.”

This can become more important for complex and niche businesses. For example, if your business involves operating heavy machinery or you handle large amounts of data, then you might need to discuss your policy in more depth before choosing your cover. 

Frequently asked questions

Is public liability insurance a legal requirement?

Public liability insurance isn’t legally required in the UK, but many clients, landlords, and local authorities require it as a condition of working with them. It’s one of the most commonly held covers for small businesses.

How much employers’ liability cover do I need?

In the UK, the law requires most businesses with employees to hold a minimum of £5 million in employers’ liability cover – but most insurers offer £10 million as standard.

Do I need professional indemnity insurance?

If you provide advice, designs, or professional services, you may need professional indemnity cover. Even where not legally required, clients often require it contractually.

For some professions, professional indemnity insurance is mandatory. For example, solicitors must hold professional indemnity insurance as a condition of their Solicitors Regulation Authority authorisation and. Architects require it under Architects Registration Board rules.

Related business insurance and claims guides

• What is an insurance broker? 
• Why insurance claims get delayed (and how to avoid it)
• What is ghost broking? How to avoid insurance scams