Business Insurance Calculator
What business insurance costs in 2026 — priced by trade, staff and cover
Last updated: July 2026
How much does business insurance cost in the UK?
Business insurance in the UK typically costs £150 to £400 a year for a sole trader with no staff, £400 to £1,200 for a small business with two or three employees, and £1,500 to £5,000 once you add premises, stock, professional indemnity and cyber cover. The single biggest driver is not your turnover – it is what your business actually does. A dog walker and a restaurant with deep fat fryers sit at opposite ends of the same market. The calculator above prices your trade, and the table below shows what each type of business really pays.
Typical business insurance cost by trade (2026)
| Business type | Sole trader | Small firm (2–5 staff) | What drives the price |
|---|---|---|---|
| Dog walker / pet sitter | £70–£150 | £250–£500 | Number of dogs, care custody & control, key cover |
| Cleaning business | £80–£180 | £250–£600 | Working at height, loss of keys, chemicals |
| Personal trainer | £80–£200 | £300–£600 | Professional indemnity – advice, not just injury |
| Office / consultancy | £150–£350 | £400–£900 | IT value, cyber, professional indemnity |
| Hair & beauty salon | £120–£350 | £300–£700 | Treatment list – laser, injectables, microblading |
| Gym / fitness studio | £200–£450 | £500–£1,200 | Equipment value, wet areas, 24-hour access |
| Tradesman | £200–£500 | £600–£1,500 | Trade risk band, tools, working at height |
| Shop / retail | £250–£600 | £600–£1,800 | Stock value, location, product liability |
| Courier / delivery | £900–£2,000 | £2,500–£6,000 | Hire & reward motor cover dominates the premium |
| Restaurant / cafe | £600–£1,200 | £1,200–£2,500 | Deep fat fryers, late licence, fit-out value |
| Taxi / private hire | £1,500–£3,500 | £4,000–£12,000 | Public vs private hire class, mileage, area |
Ranges reflect 2026 UK commercial market rates. Click any trade for a full breakdown and a calculator built for that risk.
The one cover the law forces you to buy
Almost all business insurance is voluntary. Employers' liability is not. Under the Employers' Liability (Compulsory Insurance) Act 1969, the moment you employ anyone – full time, part time, casual, an apprentice, in most cases a temp – you must hold at least £5 million of employers' liability cover. The penalty for trading without it is up to £2,500 for every day you are uninsured, and a further £1,000 for failing to display the certificate. It is the only business insurance the HSE will prosecute you for not having, and it is the one small firms most often forget when they take on their first member of staff.
The narrow exceptions are a genuinely self-employed contractor who controls their own work, and a limited company where the only employee is also the sole owner of 50% or more of the shares.
The seven covers, and which ones you actually need
- Public liability. Injury to a member of the public or damage to their property. £2 million is standard; £5 million or £10 million is routinely demanded by landlords, councils and commercial tenders. Needed by: anyone the public, clients or contractors come near.
- Employers' liability. Compulsory from your first employee, minimum £5 million. Needed by: anyone with staff. No exceptions worth relying on.
- Professional indemnity. Claims that your advice, design or service caused financial loss. Public liability will not touch these. Needed by: consultants, designers, accountants, IFAs, PTs, architects, IT firms – and mandated by the regulator for many.
- Contents, stock, tools and equipment. Insure at the cost of replacing it today, not what you paid. Policies contain an average clause: under-insure by half, and the insurer can halve your claim.
- Business interruption. Pays your lost gross profit and ongoing costs while you cannot trade. For any business with premises this is usually the most valuable section on the schedule – a fire does not just cost you the kitchen, it costs you three months of income while the rent and wages continue.
- Cyber and data breach. Ransomware recovery, IT outage, and the cost of an ICO investigation after a personal-data breach. A ransomware attack on a ten-person firm typically costs £20,000–£60,000. Cover is usually £200–£300 a year – one of the few genuinely asymmetric buys in commercial insurance.
- Product liability. Illness or injury caused by goods you make, sell or serve. Do not assume public liability answers a food poisoning claim – check the wording.
What actually moves your premium
Insurers rate a business on severity, not just frequency. The loadings that hurt are the ones where a single claim can be catastrophic: a deep fat fryer in a restaurant (fires spread through extraction ducting and cause total losses), working at height for a cleaner or tradesman (falls produce life-changing injuries), a sauna or pool in a gym (scalding, drowning, legionella), laser or injectables in a salon (burns and scarring), and hire-and-reward motor for a courier or taxi (a vehicle on the road all day is the largest single exposure in the entire commercial market – which is why couriers and taxis sit at the top of the table above).
Turnover matters less than most owners expect. Doubling your turnover typically increases the liability element by 40–50%, not 100%. Adding one hazardous activity can add more to your premium than doubling your sales.
Worked example
A consultancy in Manchester turns over £300,000, employs five staff, has £35,000 of IT and contents, and buys cyber and £1 million of professional indemnity. Public liability comes to about £138. Employers' liability for five staff adds £425. Contents add £263. Professional indemnity (£290) and cyber (£240) add £530. That is roughly £1,356 a year, or about £1,519 once Insurance Premium Tax at 12% is added – and the two "optional" covers make up almost 40% of it, which is exactly the right shape for a business that sells advice rather than objects.
How to cut the bill without cutting the cover
Pay annually. Monthly instalments are a credit agreement, typically at 8–15% APR. Get the limits right, not high. Buying £10 million of public liability when nobody visits your premises wastes money; buying £1 million when your tender demands £5 million loses you the contract that would have paid for the policy many times over – read the tender before you renew. Value your contents properly once a year to avoid the average clause. Keep the paperwork: gas safety, electrical (EICR), duct cleaning, PAT testing, COSHH assessments, staff qualifications – an insurer that has to ask for them is an insurer that is loading your premium, and their absence is what turns a defensible claim into a paid one. Finally, use a broker who writes your trade. The mainstream comparison sites are consistently uncompetitive once a commercial kitchen, a wet area, a ladder or a delivery vehicle appears on the schedule.
Insurance Premium Tax – the 12% nobody quotes you
Every premium above carries Insurance Premium Tax at the standard rate of 12%, added on top of the figure a broker quotes you. On a £1,000 premium that is £120. It is not VAT, you cannot reclaim it, and it is not optional. Budget for it – and if you want to see it separately on any of our estimates, every calculator on this site breaks it out.
Frequently asked questions
How much does business insurance cost in the UK?
A sole trader with no staff typically pays £150 to £400 a year. A small business with two or three employees pays £400 to £1,200. Once you add premises, stock, professional indemnity and cyber cover the total commonly reaches £1,500 to £5,000. What your business does matters far more than what it turns over.
Is business insurance a legal requirement?
Only employers' liability is. Under the Employers' Liability (Compulsory Insurance) Act 1969 you must hold at least £5 million of cover from your first employee, with fines of up to £2,500 for every day you trade uninsured. Public liability, professional indemnity and the rest are voluntary — but landlords, councils and commercial tenders usually require them.
What is the difference between public liability and professional indemnity?
Public liability covers physical injury to a person or damage to their property. Professional indemnity covers financial loss caused by your advice, design or service. They answer completely different claims, and a business that gives advice needs both.
Do I need employers' liability for one part-time employee?
Yes. Employers' liability is compulsory from the first employee, including part-time, casual and apprentice staff, and in most cases temps. The only meaningful exceptions are a genuinely self-employed contractor who controls their own work, and a limited company whose sole employee also owns 50% or more of the shares.
Why is courier and taxi insurance so much more expensive?
Because a vehicle on the road all day is the largest single exposure in the commercial market. Hire-and-reward motor cover dominates the premium, and it sits on top of the liability exposure every other business also carries. That is why couriers and taxis pay several times what an office pays.
What is Insurance Premium Tax and do I pay it?
Insurance Premium Tax is charged at the standard rate of 12% on top of your premium. On a £1,000 premium that is £120. It is not VAT, it cannot be reclaimed, and every UK business insurance policy carries it.
Source: employers' liability requirement (£5 million minimum, penalties up to £2,500 per day) from the Health and Safety Executive – Employers' Liability (Compulsory Insurance) Act 1969. Insurance Premium Tax standard rate (12%) from GOV.UK – Insurance Premium Tax. Data breach obligations from the Information Commissioner's Office. Premium ranges reflect 2026 UK commercial market rates.