UK small businesses face three main liability risks: claims from the public, claims from employees, and claims about their professional work. This guide reviews six FCA-authorised UK insurers, comparing how each covers public liability, employers' liability, and professional indemnity, using the FCA Register, GOV.UK, and Association of British Insurers data. Kael Tripton does not provide quotes, does not route enquiries to brokers, and does not earn commission from any provider mentioned.
Key Facts
- Employers' liability is the only compulsory liability cover for most small businesses, required once you employ staff, with a legal minimum of £5 million (GOV.UK; Employers' Liability (Compulsory Insurance) Act 1969).
- Public liability covers claims by the public for injury or property damage and was the most commonly held SME cover at 57 per cent of respondents (ABI SME underinsurance report, January 2026).
- Professional indemnity covers client claims arising from negligent advice or services and is mandatory for some regulated professions (ABI, accessed June 2026).
- A business can be fined £2,500 for every day it is not properly insured for employers' liability, plus £1,000 for not displaying the certificate (GOV.UK, accessed June 2026).
- All liability insurers must be FCA-authorised, and disputes can be referred to the Financial Ombudsman Service (FCA; FOS, accessed June 2026).
How small business liability insurance works in the UK
Liability insurance protects a business against claims that it caused harm. For small businesses, three covers do most of the work. Public liability responds to claims by members of the public for injury or property damage. Employers' liability responds to claims by staff injured or made ill by their work. Professional indemnity responds to claims by clients that the business' advice or work caused them financial loss.
Only employers' liability is generally compulsory. Under the Employers' Liability (Compulsory Insurance) Act 1969, a business with staff must hold at least £5 million of cover, and GOV.UK sets out daily fines for going without. Public liability is optional in law but widely required by contracts, and professional indemnity is mandatory for some regulated professions and prudent for any advice-led business.
These covers are sold individually or bundled into a combined commercial or tradesman policy. Whichever route a business takes, the insurer must be FCA-authorised, verifiable on the FCA Register at register.fca.org.uk, with disputes referable to the Financial Ombudsman Service once the insurer's complaints process is complete.
Providers compared at a glance
| Provider | Liability covers offered | Distribution | FCA reference | Typical buyer |
|---|---|---|---|---|
| Aviva | Public, employers, professional indemnity | Brokers and direct | 202153 | SMEs across sectors |
| AXA | Public, employers, professional indemnity | Direct and brokers | 202312 | Trades, shops, professionals |
| Allianz | Public, employers, combined liability | Via brokers | 121849 | SMEs and larger firms |
| Hiscox | Public, professional indemnity | Direct and brokers | 113849 | Professionals and services |
| Zurich | Public, employers, professional indemnity | Brokers and direct | 203093 | Tradespeople and SMEs |
| NFU Mutual | Public, employers liability | Local agency offices | 117664 | Rural and local businesses |
Liability covers offered reflect each insurer's published business documentation. FCA reference numbers are taken from the Financial Conduct Authority Register, accessed June 2026.
Aviva
Who Aviva is
Aviva Insurance Limited is authorised by the FCA under reference 202153 and is one of the largest UK general insurers, offering all three liability covers through brokers and direct.
What the policy covers
Aviva provides public and employers' liability and professional indemnity, which can be combined with property and other sections in a commercial package. Limits are selected to suit the trade and contracts.
Notable exclusions
Each cover excludes risks outside its scope; for example, public liability excludes employee injury and professional advice claims. Standard exclusions apply per section.
Policy limits and excess
Liability limits commonly range from £1 million to £10 million, with employers' liability meeting the £5 million minimum. Excess is set per section.
Who this policy suits
SMEs that want all three liability covers from a single large insurer.
AXA
Who AXA is
AXA Insurance UK plc is authorised by the FCA under reference 202312 and offers liability cover within packaged business products sold direct and through brokers.
What the policy covers
AXA provides public and employers' liability and professional indemnity across trade, retail, office, and professional packages, selected by business type.
Notable exclusions
Cover is limited to the sections chosen, and each liability section excludes risks outside its scope.
Policy limits and excess
Public liability limits commonly run from £1 million to £5 million, with higher limits on referral. Employers' liability meets the £5 million minimum. Excess is set per section.
Who this policy suits
Trades, retailers, and professionals wanting packaged liability cover.
Allianz
Who Allianz is
Allianz Insurance plc is authorised by the FCA under reference 121849 and distributes commercial liability cover mainly through brokers.
What the policy covers
Allianz offers public and employers' liability within commercial combined and combined liability products, with professional indemnity available for relevant trades through brokers.
Notable exclusions
Standard commercial exclusions apply, and professional services liability is arranged as a separate section.
Policy limits and excess
Liability limits commonly range from £1 million to £10 million. Excess terms are set in the schedule.
Who this policy suits
SMEs and larger firms arranging combined liability cover through a broker.
Hiscox
Who Hiscox is
Hiscox Insurance Company Limited is authorised by the FCA under reference 113849 and specialises in liability and professional indemnity for professionals and small businesses.
What the policy covers
Hiscox centres on public liability and professional indemnity, with options for cyber and equipment, sold directly and through brokers. Employers' liability can be added where staff are employed.
Notable exclusions
Cover is limited to selected sections, and property-heavy risks may need a broader commercial package.
Policy limits and excess
Liability and professional indemnity limits are set per policy, commonly from £1 million upward. Excess is stated in the schedule.
Who this policy suits
Consultants, agencies, and service businesses needing public liability and professional indemnity.
Zurich
Who Zurich is
Zurich Insurance Company Ltd is authorised by the FCA under reference 203093 and provides liability cover through brokers and the Zurich Business channel.
What the policy covers
Zurich offers public and employers' liability and professional indemnity within trade and commercial packages, combinable with property and contract works sections.
Notable exclusions
Each liability section excludes risks outside its scope, and cover is limited to the sections chosen.
Policy limits and excess
Liability limits commonly range from £1 million to £10 million, with employers' liability at the £5 million minimum. Excess is confirmed in the schedule.
Who this policy suits
Tradespeople and SMEs wanting liability cover within a broader commercial policy.
NFU Mutual
Who NFU Mutual is
The National Farmers' Union Mutual Insurance Society Limited is authorised by the FCA under reference 117664 and arranges commercial liability cover through local agency offices.
What the policy covers
NFU Mutual provides public and employers' liability within farm and commercial policies, with a focus on rural and local businesses.
Notable exclusions
Professional advice liability needs separate cover, and standard commercial exclusions apply.
Policy limits and excess
Liability limits commonly range from £1 million to £10 million, arranged through an agent. Excess is set per section.
Who this policy suits
Farms, rural enterprises, and local businesses preferring face-to-face cover.
How to compare liability insurance for a small business objectively
Work out which of the three covers you need. Employers' liability is compulsory if you have staff. Public liability is usually required by client contracts and is sensible for anyone meeting the public. Professional indemnity applies if you give advice or provide a specialist service, and may be mandatory for your profession.
Match limits to your obligations. Employers' liability must be at least £5 million by law, public liability limits are often set by contracts at £5 million or £10 million, and professional indemnity limits should reflect the value of the work and any regulator requirement.
Decide between buying covers separately or as a combined policy, then verify the insurer on the FCA Register before buying. If a claim is later declined and you disagree, eligible complaints can be escalated to the Financial Ombudsman Service once the insurer's complaints process is complete.
Frequently asked questions
What liability insurance does a small business need?
Employers' liability is compulsory once you employ staff, with a £5 million legal minimum. Public liability is usually required by contracts, and professional indemnity is needed for advice-led work and is mandatory for some regulated professions.
Is public liability insurance compulsory for small businesses?
No, public liability is not generally a legal requirement, although many client contracts and venues require it. Employers' liability is the liability cover most often required by law once you have employees.
What is the difference between public liability and professional indemnity?
Public liability covers third-party injury or property damage from your activities. Professional indemnity covers client financial loss caused by your negligent advice or services. Many businesses need both.
How much liability cover should a small business have?
Employers' liability must be at least £5 million. Public liability is commonly required at £5 million or £10 million by contracts, and professional indemnity limits should reflect the value of the work and any regulator requirement.
Can I buy all three liability covers together?
Yes. Many insurers offer public liability, employers' liability, and professional indemnity within a single combined policy, though they remain separate sections covering different claims.
How do I check a liability insurer is authorised?
Search the firm's name or reference number on the FCA Register at register.fca.org.uk. All the insurers in this guide are FCA-authorised, and eligible disputes can be referred to the Financial Ombudsman Service.
