How to choose business insurance

Match cover to your real risks, not just the cheapest premium.

Choosing business insurance is about protecting what would hurt most if it went wrong — compensation claims, damage to premises, loss of income, or failing to meet regulatory and contractual requirements. Price matters, but adequate cover and clear wording matter more when you need to claim.

This guide walks through a practical process. It is general information, not advice on your specific business — always read your policy documents and speak to us if anything is unclear.

Step 1: List your real risks

Start with how your business actually operates, not a generic checklist from the internet.

People — customers on site, employees, subcontractors, members of the public nearby
Places — owned or leased premises, client sites, storage, vehicles, home office
Activities — treatments, advice, manual work at height, food service, use of heat or chemicals
Dependencies — key suppliers, single premises, expensive kit, seasonal trade
Obligations — landlord requirements, client contracts, regulator rules, trade association standards

A salon faces different risks to a scaffolder, a GP practice or a village pub. Our five specialist brands exist because sector-specific wording and limits matter.

Step 2: Understand core cover types

Most UK businesses start with a foundation of liability covers, then add property and income protection as needed.

Public liability insurance — injury or property damage to third parties
Employers liability insurance — legally required for most employers
Professional indemnity insurance — financial loss from professional mistakes or advice
Commercial property and contents — buildings, stock, equipment, tenant improvements
Business interruption insurance — lost income after insured property damage
Motor, cyber, legal expenses, directors & officers — depending on size and activities

See our insurance glossary for plain-English definitions.

Step 3: Check contractual and regulatory requirements

Before you buy, gather evidence of what you must hold:

Lease clauses specifying minimum PL limits or property cover
Main contractor or client schedules demanding £5m or £10m PL and PI
Professional body or regulator rules — medical indemnity for GMC, GDC, HCPC and similar bodies
Licensing conditions for pubs and entertainment venues
Airside or aviation contracts with strict liability and height limits

Our MMI 4u team advises on malpractice and indemnity for health professionals. Other sectors are covered through Pub, Salon, Tradesman and Airside Insurance 4u.

Step 4: Compare like with like

When comparing quotes, check:

Limits — per claim and in the aggregate; are they enough for your contracts?
Excesses — see our guide on policy excess
Exclusions — heat work, height limits, USA/Canada, subsidence, unoccupied periods
Extensions — legal expenses, loss of licence, personal accident, goods in transit
Claims basis — especially for PI (claims-made policies need run-off cover when you stop)

A cheaper premium with a broad exclusion for the work you do every day may cost far more after a declined claim.

Step 5: Get your sums insured right

Under-insurance affects property and BI claims. Rebuild cost is not the same as market value. Stock fluctuates seasonally. BI should reflect realistic gross profit and an indemnity period long enough to recover. Tell your broker about changes — new equipment, extra staff, second premises, or a sharp rise in turnover.

Step 6: Disclose honestly at renewal

UK insurance contracts rely on fair presentation of risk. Declare claims, convictions, previous declines, changes in activities and material facts your broker asks about. Non-disclosure can void a policy when you need it most.

Step 7: Use a specialist broker

As a Lloyd’s coverholder and FCA-authorised broker, BIS-Nationwide places cover with leading UK insurers and explains wording in plain language. We have arranged specialist insurance since 1940. Contact us or visit the specialist site for your sector from our about us page.

Quick checklist before you buy

Do I employ anyone? (EL likely required)
Do customers or the public visit me or my sites? (PL essential)
Do I give advice, designs or treatments? (PI or specialist malpractice)
Do I own or lease premises, stock or expensive tools? (Property / contents)
Could I survive months without income if the premises were damaged? (BI)
What do my contracts and regulators require?
Can I afford the excess on every section if I claim?

Next: how to make a claim | how UK insurance is regulated | glossary