Is business insurance mandatory in the UK?

Business insurance in the UK, even more so than elsewhere, covers many individual insurance products designed especially for businesses - because competition is fierce. But because competition is so fierce, many ill-informed business customers can be lured by unscrupulous insurance agents into thinking that they just have to subscribe an extraordinary number of insurance policies, “because, you know, that’s the law and you just have to”.

But they should know that only some forms of business insurance in the UK are mandatory. In fact, employer’s liability is the only business insurance in the UK to be mandatory, for any kind of business regularly hiring any staff, even just one person.

Some other businesses, like travel agents or some specific real estate professionals may also be required to subscribe specific business insurance policies. But there are really rare cases. Even if it is true that such business insurances as product liability insurance or public liability insurance are strongly recommended to any kind of business, only employer’s liability is required by law.

So don’t believe everything greedy business insurance agents tell you, but rather focus on what your business actually needs: even if the law does not compel you to subscribe a product liability insurance, do you really want to face a class-action lawsuit and let your business pay for millions of pounds worth of legal costs, damages and indemnification in case something goes wrong in the production process of your products and thousands of customers become sick?