Business insurance for startups: what you actually need, honestly
Insurance is one of those startup topics where the advice tends toward “get everything just in case,” which usually means paying for cover you don’t need. Here’s a more honest breakdown.
Public liability insurance
Covers claims if a member of the public is injured or their property is damaged because of your business. If you ever meet clients in person, work on-site, or run any kind of physical space, this is worth having. If your entire business happens over email and video calls, the risk is genuinely lower.
Professional indemnity insurance
Covers claims if a client says your advice or work caused them a financial loss. If you give advice, consultancy, design, or any service where a mistake could cost a client money, this matters, sometimes clients will contractually require you to have it before they’ll work with you.
Employers’ liability insurance
This one isn’t optional if you have employees, it’s a legal requirement in the UK the moment you take on staff, with penalties for not having it in place.
What you probably don’t need on day one
Elaborate cyber insurance or extensive product liability cover, unless your specific business genuinely carries those risks from the start. Don’t let a broad “just in case” instinct push you into cover that doesn’t match your actual work.
The honest recommendation
Match the cover to the actual risk in your specific work, not a generic startup list. If you’re unsure, a broker conversation is usually free and will tell you plainly what applies to your situation.