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Business Insurance
Most small business insurance policies cost somewhere between £150 and £600 a year, but the exact price depends on your cover type, industry, business size and claims history. This guide breaks down typical costs so you know what to expect before you get a quote.
Business insurance in the UK typically costs between £150 and £600 a year for a small business with a combined or package policy, though the price varies significantly by cover type, industry, business size and claims history. A sole trader with low-risk work might pay closer to £100-£300 a year, while a small business with several employees and higher-risk trade work could pay £1,000 or more.
These figures are typical ranges, not guaranteed prices. Every quote is based on your individual circumstances, so speak to an advisor for a price that reflects your business.
So, how much is business insurance? The answer depends heavily on which type of cover you're buying, because different policies protect against very different risks and are priced accordingly. The table below shows typical annual and monthly costs for the most common types of business insurance, based on current UK market data.
These are illustrative ranges rather than fixed prices. Your actual quote will depend on your insurer, industry, claims history and the limits of cover you choose.
Public liability insurance typically costs £70-£200 a year for a small business, and is usually the cheapest core policy because most claims involve minor injury or property damage rather than large payouts. The biggest drivers of price are footfall (how many members of the public visit your premises or worksite) and the risk level of your trade, a desk-based consultant pays far less than a tradesperson working in clients' homes.
Employers' liability insurance typically costs £60-£150 a year for a small team, though the price rises with headcount. It's worth knowing this isn't optional once you employ staff: the Employers' Liability (Compulsory Insurance) Act 1969 requires almost all UK employers to hold at least £5 million of cover, with financial penalties for going without it.
Professional indemnity insurance ranges more widely, typically £100-£600+ a year, because the price is driven by the risk category of your profession. A bookkeeper or consultant usually sits at the lower end, while professions with higher claims exposure, such as financial or technical advice, sit at the higher end.
A combined or package policy bundles several types of cover, commonly public liability, employers' liability and contents, into one policy. This typically costs £150-£600+ a year and often works out cheaper than buying each type of cover separately, though it's worth checking you're not paying for cover you don't need. If your business could lose income during a forced closure or major disruption, our business interruption insurance guide explains how that cover works alongside a combined policy.
Don't just compare the headline price. Check the level of cover, the excess and any exclusions before choosing on cost alone. A cheaper policy that excludes the exact risk your business faces isn't a saving, it's a gap you'll only discover when you try to claim.
Business size is one of the biggest factors in your overall premium, because insurers price on the scale of risk they're taking on. More employees, higher turnover and larger premises all increase the likelihood and potential size of a claim.
Turnover and premises size push the price up within each tier too. Two businesses with the same headcount can pay quite differently if one turns over significantly more or occupies larger premises. If you run a limited company, it's also worth looking beyond core business insurance: our directors' and officers' insurance guide covers a type of protection that becomes more relevant as your business and its leadership team grow.
Not sure what size tier applies to you?
An advisor can talk through your employee numbers, turnover and premises to help you compare accurate quotes.
Your industry affects both the type of cover you need and how much it costs, because some trades carry a materially higher risk of claims than others.
If you drive for work, whether that's making deliveries, working as a courier, or simply visiting clients, it's worth knowing that business insurance and business car insurance are priced and bought separately. General business insurance covers things like public liability and equipment; it doesn't cover your vehicle. If you use one or more vehicles for work, especially as a delivery driver, our fleet insurance guide explains how that cover is priced.
Property businesses have their own cost considerations too. If you rent out residential or commercial property as part of your business, general business insurance won't cover the building itself. Our landlord insurance guide explains what cover you need and what it typically costs.
Beyond cover type, business size and industry, several other factors shape the price an individual insurer quotes you. Understanding them helps you see where you have genuine control over what you pay.
Key cost factors
For most businesses, yes. The cost of a single claim, legal defence, compensation, or replacing damaged stock or equipment, will usually far exceed what you'd pay in premiums over several years. A single public liability claim that goes to court can run into tens of thousands of pounds in legal costs alone, well beyond what most small businesses could absorb from cash flow.
Some cover isn't optional either. Once you employ staff, employers' liability insurance is a legal requirement, not a choice, so for many businesses the real question isn't whether to have business insurance, but which types of cover suit your specific risks. Weighed against the potential cost of an uninsured claim, most businesses find the premium a worthwhile trade-off for the protection it provides.
If the figures above feel higher than you'd like, there are practical ways to bring your premium down without leaving your business exposed.
Practical steps
Compare quotes from multiple insurers
Auto-renewing with the same insurer each year rarely gets you the most competitive price. Comparing across a wide range of insurers, rather than accepting a single renewal quote, gives you a much clearer picture of what's genuinely available, though no single broker can access every insurer in the market.
Bundle cover into a combined policy
Where it matches what you actually need, a combined policy covering several risks at once is often cheaper than buying each type of cover separately.
Increase your voluntary excess
If you could comfortably absorb a higher contribution towards a claim, raising your excess typically reduces your premium.
Give accurate, complete information
Under-insuring or leaving out relevant details can lead to a loaded premium later, or a claim being reduced or declined when you need it most. Accurate disclosure protects you as much as it protects the insurer.
Maintain a clean claims history
Strong risk management, such as basic health and safety processes, reduces the likelihood of a claim and can help keep your renewal price down over time.
Speak to a broker who compares cover for you
A broker can compare cover and price across multiple insurers on your behalf, rather than you requesting quotes from each provider individually.
Getting a fair price on business insurance isn't just about the figures on this page, it's about comparing cover and price across multiple insurers rather than accepting a single renewal quote or the first policy you're offered. An advisor can give you access to expert advice with no pressure to proceed, helping you weigh up the trade-offs between price, cover level and excess.
If you'd like more detail on the types of cover available and how to choose between them, read our full business insurance guide. If you'd rather see how individual providers stack up, you can compare the best business insurance providers.
If you're dealing with wider financial difficulty alongside insurance costs, free and independent guidance is available from MoneyHelper at moneyhelper.org.uk or by calling 0800 138 7777.
Independent and official guidance on business insurance requirements.
Common questions
For most businesses, yes. The cost of a single claim, legal defence, compensation or replacing damaged stock, usually far exceeds what you'd pay in premiums, and some cover, such as employers' liability, is a legal requirement once you employ staff.
The cheapest core policies are typically standalone public liability policies for low-risk, office-based businesses, which can start from around £70-£100 a year. Adding employers' liability, professional indemnity or contents cover increases the price, though bundling them into a combined policy can still work out cheaper than buying each separately.
It depends on the policy, but common types include public liability (injury or damage to third parties), employers' liability (staff injury claims), professional indemnity (mistakes in professional advice or services), and business contents (equipment, stock and premises contents). Many small businesses combine several of these into one package policy.
Yes. More employees and higher turnover both increase your premium because they represent a larger scale of risk to the insurer. A bigger team or higher revenue generally means a higher potential claim if something goes wrong.
Monthly costs typically range from around £6-£17 for standalone public liability cover, up to £50 or more for a combined policy covering several risks. Your industry, business size and claims history all affect where you fall within that range.
Most insurers offer the option to spread the cost monthly instead of paying the full annual premium upfront. Paying monthly can sometimes cost slightly more overall than an annual lump sum, so it's worth checking both options when you compare quotes.
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