Published 8 September 2026 · 5 min read
Insurance for a new company divides into three: what the law requires, what your contracts require, and what you would want if something went wrong. Only the first is non-negotiable.
Required by law
Employer's liability. Most employers must hold at least £5 million of cover from the day their first employee starts. Penalties apply per day without it. A company with no employees does not need it — but check whether a sole director counts in your circumstances rather than assuming.
Motor insurance, if the company owns or operates vehicles.
Required by contracts
Professional indemnity. Not a legal requirement for most businesses, but demanded constantly by clients, and required by some regulators. If you give advice or produce work that someone relies on, expect to be asked for it — often at a specified level before a contract is signed.
Public liability. Frequently required by landlords, venues and larger customers, and sensible for anyone whose work brings them into contact with the public or third-party premises.
Worth considering
- Directors' and officers' liability — covers directors personally for claims arising from their decisions. Limited liability does not protect a director from claims against them personally.
- Cyber — for businesses holding customer data or dependent on systems.
- Business interruption and contents — where premises, stock or equipment matter.
- Product liability — if you make, import or sell physical goods.
How to decide
Start from what would actually hurt: a claim from a client, an injury on your premises, a stolen laptop full of customer data, or a month unable to trade. Insure those, and treat the rest as optional until the business changes shape.
What we do not do
We do not sell insurance and we are not authorised to advise on it. This is general context so you know which questions to ask a broker — nothing more.
Nothing here is advice about your situation
It is general information about how UK company registration works, written to be accurate at the time of publication. Rules and fees change. Where a decision matters — tax, structure, an insolvent company — take advice on your own facts.