Expanding to the UK: the 8 insurances that are key to keeping your common UK business risks at bay

Protecting your business from potential threats is naturally a vital part of ensuring its development. Thankfully, company insurance in the UK has a lot in common with that of the US, and the threats your business will face are very similar. That being said, while you may have an existing plan out of the US, there are insurances you must legally have in place in the UK using a locally submitted plan.

In this article in our Expanding to the UK series, our Commercial and Wholesale Business Manager in the UK, Kayleigh Houghton, walks you through the key types of insurance – some you must have by UK law and some that are common and strongly recommended – that will help to protect your business against the range of threats your UK expansion could face.

Key takeaways

1. The insurances that are compulsory in the UK
2. The insurances that are optional yet essential in the UK
3. Why just doing the legal minimum may not be enough

Compulsory insurances

In the UK, there are two types of insurance that are enforced by law, one that applies to all businesses and one that is specific to companies with one or more business-specific vehicles.

1. Employers’ liability insurance
Should a current or ex-employee suffer a work-related illness, injury, or death as a result of working for your business, a costly claim can be made against you. The costs relating to these claims can be covered by the right employers’ liability policy. The minimum level of employers’ liability cover in the UK is £5 million, and businesses without this cover face fines of £2,500 per day.¹

2. Motor insurance
If your business uses vehicles – whether for trade or for your staff to use – then you must also have third party motor insurance as a minimum level of cover by law. If you have five vehicles or more, you can cover them all under one motor fleet insurance policy.

Common types of insurance in the UK

While the above are the only mandatory forms of insurance by law, there are several other insurances that we consider essential in the UK, no matter what type of business you are, including:

3. Key person insurance
Your company will likely have one or multiple individuals on which the running of the business more heavily depends. The financial impact of any of these key people passing away or otherwise being unable to work for a long period of time could spell disaster for the success of your UK expansion. By insuring these key people, you can help reduce the negative impact on your UK venture, should the worst happen.

4. Directors’ and officers’ insurance (D&O)
If your company directors or key managers are found to have acted outside of their contractual terms of reference (either civil, criminal, or regulatory), legal proceedings can be brought against them by shareholders, investors, employees, regulators, or third parties. D&O liability insurance can help to cover the cost of defending these proceedings, as well as any compensation costs that arise from an unsuccessful defence.

5. Public liability insurance
If a third party or their property comes to harm due to an accident, for which your business or one of your people is deemed liable, this insurance can help to cover the costs related to any legal claims being made against you.

6. Cyber insurance
This helps to protect your company from the ever-evolving dangers of internet-based attacks and scams. In the current climate where nearly every business has at least some level of digital footprint, many businesses treat cyber insurance as mandatory.

7. Business interruption insurance
This cover helps keep your business afloat should something happen that affects or stops your ability to trade.

8. Product liability insurance
This supports your business if you are held liable for death, injury, illness, or damage caused by a defective part or product.

Just doing your legal minimum may not be enough…

While having the minimum legally required cover in place will help your business comply with UK law, what it won’t do is protect your business from the full range of risks it will face when expanding to the UK.

The 8 insurance types listed in this article all safeguard vital areas of your business and should all be seriously considered when it comes to protecting your UK operation.