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UK law makes two business covers compulsory for most firms: employers' liability, with a £5 million minimum, and third party motor insurance. Regulators, licensing bodies and contracts add the rest.
Part of: Commercial insurance
In short
Employers' liability insurance is compulsory for most employers in Great Britain, with a minimum of £5 million under the 1969 Act, and third party motor insurance is compulsory for any vehicle used on a road under section 143 of the Road Traffic Act 1988. Regulators require professional indemnity for many professions, Ofsted requires public liability for childminders, councils check motor cover before licensing private hire vehicles, and Scotland's short-term let licence requires buildings and public liability cover. Public liability is not a general legal requirement, and Martyn's Law imposes no insurance duty.
Very few covers are compulsory for every UK business. Employers' liability and motor third party insurance are required by law. Other covers are required by a regulator or licensing body for particular trades, and many more are required only by contract. The table separates the three. It covers England unless stated; Scotland, Wales and Northern Ireland can differ.
| Business type | What is required | Required by | Minimum / notes | Source |
|---|---|---|---|---|
| Any business with employees (Great Britain) | Employers' liability insurance | Law: Employers' Liability (Compulsory Insurance) Act 1969 and 1998 Regulations | At least £5 million. Fines up to £2,500 a day uninsured and up to £1,000 for not displaying the certificate. Limited exemptions | HSE40, reg. 3 |
| Any business using a motor vehicle on a road or public place | Third party motor insurance | Law: Road Traffic Act 1988, s.143 | Must cover death, injury and property damage; the Act does not require property damage cover above £1,200,000 (s.145(4)(b)) | s.143, s.145 |
| Couriers and delivery drivers | Motor cover that includes carrying goods for hire and reward | Law: Road Traffic Act 1988 (the policy must cover the actual use) | Goods in transit cover is not a legal requirement but is commonly required by contract | s.143 |
| Hauliers (goods vehicles over 3,500kg) | Operator licence from the traffic commissioner, plus compulsory motor cover | Law (motor); licensing body (operator licence) | The licence sets no insurance amount. Carrier's liability and CMR cover follow from contracts | GOV.UK |
| Taxi and private hire | Public hire or private hire motor insurance | Law and licensing authority | A council must be satisfied that compliant insurance is in force before licensing a private hire vehicle (1976 Act, s.48(1)(b)); TfL in London | 1976 Act Part II |
| Regulated professions | Professional indemnity insurance | Regulator or professional body | For example, £3m any one claim for relevant SRA recognised and licensed bodies, £2m otherwise | SRA rules |
| Childminders (England) | Public liability insurance | Regulator: Ofsted registration requirements | Compulsory Childcare Register: "You must have public liability insurance" | Ofsted |
| Nurseries and group childcare (England) | Appropriate insurance, such as public liability, for all premises used | Regulator: EYFS statutory framework | No minimum limit stated | EYFS 2026 |
| Adult social care providers (England) | Employers' liability by law | Law (EL); no CQC fundamental standard is headed insurance | Public liability and other covers are commonly required by commissioners and landlords | 2014 Regulations |
| Security firms | SIA licences for individuals; voluntary Approved Contractor Scheme for firms | Voluntary scheme (ACS) | The ACS is voluntary, but the SIA’s Get Approved guidance (July 2026) says it takes into account whether a firm holds public and employers’ liability of at least £5 million | SIA ACS |
| Holiday lets | England: no general legal requirement. Scotland: buildings and public liability insurance | Scotland: short-term let licence conditions | GOV.UK guidance for England says owners should have public liability and suitable buildings and contents cover | GOV.UK, SSI 2022/32 |
| HMO landlords (England and Wales) | No insurance in the mandatory licence conditions | Not required by Schedule 4 | Check any extra conditions your council attaches. Mortgage lenders commonly require buildings cover | Housing Act 2004 Sch. 4 |
| Events and venues (Martyn's Law) | Security procedures and measures, not insurance | No insurance duty | The Home Office factsheet does not mention insurance. Venues commonly require hirers to hold public liability | Home Office |
| Hiring out horses (England) | Public liability insurance covering injuries to or caused by people hiring your horses | Licensing body: local council licence | No minimum stated in the GOV.UK guidance | GOV.UK |
Rules checked 30 October 2026.
The Employers' Liability (Compulsory Insurance) Act 1969 applies to employees normally based in England, Scotland or Wales. The HSE guide for employers says you must be insured for at least £5 million, and most insurers offer at least £10 million. Exemptions include family businesses where all employees are closely related to the owner (but not if incorporated as a limited company), companies whose only employee owns 50% or more of the issued share capital, and most public bodies. Whether a subcontractor counts as an employee depends on the real relationship and control, not the job title. HSE says staff based in Northern Ireland, the Isle of Man or the Channel Islands need checking against local requirements. More in our ELCI Act explainer.
Section 143 of the Road Traffic Act 1988 makes it an offence to use a motor vehicle on a road or other public place without third party insurance. Cover must match the use: carrying goods or passengers for payment needs hire and reward cover, explained in hire and reward insurance. Businesses running several vehicles often use a fleet policy.
Professional indemnity is compulsory for many regulated professions, including solicitors, barristers, licensed conveyancers, accountants in practice, architects, RICS-regulated firms, FCA advice and intermediary firms, and registered health professionals. Minimums vary widely and some rules set none. Many professions, such as IT, marketing, HR and management consultancy, have no PI rule at all. Our PI requirements by profession table sets out each rule and minimum with its source.
Care and childcare are a mixed picture. Ofsted's Childcare Register requirements state that childminders must have public liability insurance, and the EYFS framework for group and school-based providers requires appropriate insurance such as public liability. For adult social care, the 2014 fundamental standards contain no regulation headed insurance; commissioners and landlords commonly set their own insurance requirements.
Security firms are not licensed as businesses, but staff doing licensable work need an SIA licence. Firms joining the voluntary Approved Contractor Scheme are assessed on insurance among other things.
In Scotland, the mandatory conditions in Schedule 3 to the Short-term Lets Licensing Order 2022 require valid buildings insurance for the premises and valid public liability insurance for each let. In England, GOV.UK guidance recommends cover but there is no general legal requirement; see short-term let registration and insurance.
The mandatory HMO licence conditions in Schedule 4 to the Housing Act 2004 cover gas safety, electrical safety, smoke and carbon monoxide alarms, room sizes and occupancy, but none requires insurance. An unlicensed HMO is an offence, and insurance does not usually pay the penalties; see HMO landlord insurance.
The Terrorism (Protection of Premises) Act 2025, known as Martyn's Law, received Royal Assent on 3 April 2025. The Home Office factsheet sets a standard tier for premises where 200 to 799 people may be present and an enhanced tier for 800 or more, with the SIA as regulator and an implementation period expected to be at least 24 months. It imposes security duties, not an insurance duty.
Most other business insurance is required by contract, not law. Common examples:
How Apex helps: we check what the law, your regulator and your contracts require, then arrange commercial insurance to match. For credit risk data, see our UK company insolvency statistics.
For most businesses, two covers are compulsory by law: employers' liability if you have employees in Great Britain, with a minimum of £5 million, and third party motor insurance for any vehicle used on a road or public place under section 143 of the Road Traffic Act 1988. Other covers are required by regulators, licensing bodies or contracts.
Not generally. No UK law requires every business to hold it. Some regulators and licensing bodies do, including Ofsted for childminders, the Scottish short-term let licence and council licences for hiring out horses in England. Most businesses hold it because clients, venues, councils or landlords require it in contracts.
Not if they genuinely have no employees. HSE also exempts family businesses where all employees are closely related to the owner, unless the business is a limited company, and companies whose only employee owns 50% or more of the shares. Taking on even part-time or casual staff usually brings the duty into force.
No. The Terrorism (Protection of Premises) Act 2025 sets security duties for qualifying premises and events, and the Home Office factsheet does not mention insurance. Venues and councils commonly require organisers to hold public liability insurance by contract, and organisers may choose event cancellation cover.
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