How much does business insurance cost in the UK?
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The honest answer: less than most new business owners fear — if your business is low-risk — and much more than the adverts suggest if it isn't. Here are realistic 2026 ranges, and, more usefully, the factors that decide where in the range you land.
Typical prices for a small, low-risk business
| Cover | Typical cover level | Typical cost |
|---|---|---|
| Public liability | £1m–£2m | From ~£5–£15/month (1 in 10 Simply Business customers pay £5.27/month or less) |
| Professional indemnity | £250k–£1m | ~£8–£30/month for low-risk professions |
| Employers' liability | £10m (legal minimum £5m) | £150–£600/year for small low-risk firms |
| Cyber | Turnover under £1m | £200–£600/year |
| Contents / tools | Varies with kit value | Often £5–£20/month added to a combined policy |
Higher-risk sectors change the picture substantially: employers' liability in construction or care commonly runs £400–£2,000+ per year, and public liability for trades sits well above office-based rates.
The seven things that set your premium
Your exact trade. Insurers price by activity code. A copywriter and a scaffolder both "run a small business", but their risk — and price — differ by an order of magnitude. Describe your work precisely: vague descriptions cause both wrong prices and refused claims.
Turnover and payroll. Bigger numbers mean bigger exposure. Estimate honestly; you can update mid-year if you grow.
Headcount. Employers' liability scales with the people covered, weighted by what they do.
Cover limits. Moving public liability from £1m to £5m often costs less than people expect — get both prices, because contracts frequently demand the higher figure.
Excess. Accepting a higher excess lowers your premium, but never set one you couldn't pay tomorrow.
Claims history. Past claims raise prices for 3–5 years. Declare them all — hiding one voids the policy.
How you pay. Monthly payment is usually a credit agreement with interest, often adding 10%+ over the year. Pay annually if cash flow allows.
Three ways to pay less (that don't weaken your cover)
First, compare across the market rather than renewing on autopilot — loyalty is penalised in insurance, so diarise a re-shop three weeks before every renewal. A comparison broker like Simply Business shows quotes from 30+ insurers in one form. Second, bundle: a combined policy (PL + PI + contents) from one insurer usually beats three separate ones. Third, buy the cover your risks demand rather than the biggest package on the page — the decision map in our free starter guide settles what you actually need in 60 seconds.
The false economy to avoid: the cheapest quote with a £750 excess, a per-year (not per-claim) limit and exclusions covering half your working week is not the cheapest policy — it's the most expensive claim refusal you'll ever buy. Compare the wording, not just the price.
What does going without cost?
For contrast: trading without required employers' liability insurance risks fines of up to £2,500 per day, the average employers' liability claim exceeds £14,000, and professional indemnity claims against consultants regularly reach six figures. Against ~£20/month for a typical home-based service business's combined cover, the maths rarely favours going bare for long.
Next step: gather your facts once — exact activities, expected turnover, headcount, equipment values, claims history — then get at least three quotes with identical answers so they're truly comparable. The full process, the small-print checklist and our top-10 provider comparison are in the free Covered. starter guide.