Insuring your business

Comparing business insurance policies

How to compare insurance quotes and policy documents so you choose cover that actually protects your business. Covers what to look for beyond price, how to read a policy schedule, and your disclosure obligations at renewal.

UK-wide
Guide summary

Don't just pick the cheapest insurance quote. Compare cover levels, excess amounts, and exclusions to protect your business. Check the insurer's financial strength and claims service too.

  • Compare indemnity limits — check if per claim or aggregate
  • Add compulsory and voluntary excess — ensure you can afford it
  • Read all exclusions — check none affect your business activities
  • Understand claims-made vs occurrence policy basis
  • Check insurer is authorised by FCA or PRA
  • Research insurer's claims service reputation
  • Ask broker to explain non-standard policy wordings
  • Keep policy schedule showing your cover details
  • Disclose all relevant facts when renewing
  • Match retroactive dates if switching insurers
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Related guides in Compliance & Legal

Business insurance: what you need

Understanding mandatory and recommended insurance for your business, including employers' liability, public liability, professional indemnity, and sector-specific cover.

Why the cheapest quote is not always the best deal

When you receive several insurance quotes, it is tempting to pick the cheapest. But a policy that does not pay out when you claim is money wasted. The cheapest premium often means narrower cover, higher excess amounts, or exclusions that relate directly to your business activities.

Taking an hour to compare the detail across two or three quotes can save you thousands if something goes wrong. This guide shows you what to look for.

What to compare beyond price

For every quote you receive, check these seven areas before making a decision.

  1. 1

    1. Compare cover levels

    Check whether the indemnity limit is per claim or aggregate (total for all claims in the policy year). A per-claim limit of £1 million means each individual claim is covered up to that amount. An aggregate limit of £1 million means that once you have claimed a total of £1 million across all claims in the year, cover is exhausted. Aggregate limits are cheaper but riskier if you face multiple claims.

  2. 2

    2. Check excess amounts

    Every policy has an excess — the amount you pay towards each claim before the insurer pays. There are two types: compulsory excess (set by the insurer, non-negotiable) and voluntary excess (an additional amount you choose to reduce your premium). Add both together and ask yourself: could I afford to pay this out of cash flow for each claim? If not, the premium saving is not worth the risk.

  3. 3

    3. Read the exclusions

    Exclusions list what the policy does NOT cover. Read every exclusion and ask whether any relate to your actual business activities. For example, a public liability policy might exclude work at height, work involving hot materials, or work on existing structures. If your business involves any excluded activity, the policy will not protect you when it matters most.

  4. 4

    4. Understand the policy basis

    Policies are written on one of two bases. Claims-made policies cover claims made during the policy period, regardless of when the work was done — used for professional indemnity and cyber insurance. Occurrence policies cover incidents that happen during the policy period, regardless of when the claim is made — used for employers' liability and public liability. If you are comparing professional indemnity quotes, check the retroactive date on each. This is the date from which past work is covered. Switching insurer without matching the retroactive date can leave old work unprotected.

  5. 5

    5. Check insurer financial strength

    Your insurer needs to be solvent when you claim, which could be years after you buy the policy. Check that the insurer is authorised by the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA) on the Financial Services Register. For additional reassurance, look for credit ratings from agencies such as AM Best, Standard & Poor's, or Moody's — a rating of A or above indicates strong financial health.

  6. 6

    6. Research claims service reputation

    An insurer's claims handling matters as much as the policy wording. Look for independent reviews of claims experience, ask your broker about their claims experience with each insurer, and check whether the insurer uses in-house claims handlers or outsources to third parties. Some insurers are known for fast, fair settlements while others routinely dispute claims or delay payment.

  7. 7

    7. Compare policy wording

    Standard market wordings are well understood and tested in court. Bespoke wordings may offer broader cover but can also contain unusual restrictions. If you are not sure whether a policy wording is standard or bespoke, ask your broker to explain any differences.

How to read a policy schedule

The policy schedule is the personalised front section of your insurance document. It contains the specific details of your cover. Before you accept a policy or sign a renewal, check every item on the schedule:

  • Business details — verify your trading name, address, business description, and number of employees are correct. Errors here can give the insurer grounds to refuse a claim.
  • Cover types and limits — confirm each section matches what you requested. If you asked for £2 million public liability but the schedule shows £1 million, raise it before accepting.
  • Excess amounts — note the compulsory and voluntary excess for each section of cover. These may differ between sections (for example, a higher excess on business interruption than on contents).
  • Endorsements — these are modifications to the standard policy terms. Extensions add cover; exclusion endorsements remove cover for specific risks. Endorsements override the main policy wording, so read them carefully.
  • Retroactive date — for claims-made policies (especially professional indemnity), check this date matches the start of your previous policy. If it does not, work completed before this date will not be covered.
  • Conditions precedent — requirements you must comply with for claims to be valid, such as maintaining working alarms or following specified security procedures.

Build a comparison table

A simple table makes differences between quotes visible at a glance. Set up a spreadsheet or table with these rows:

  • Insurer name
  • Annual premium
  • Indemnity limit (per claim or aggregate)
  • Compulsory excess
  • Voluntary excess
  • Key exclusions (list any that relate to your activities)
  • Policy basis (claims-made or occurrence)
  • Retroactive date (if claims-made)
  • Insurer financial rating
  • Claims service notes

Fill in one column per quote. The differences will become obvious, and you can make an informed decision rather than choosing on price alone.

Your disclosure duties when buying or renewing

Under the Insurance Act 2015, you have a legal duty to make a fair presentation of the risk when you take out or renew a commercial insurance policy. This means you must disclose every material fact that would influence an insurer's decision — including claims history, changes to your business activities, new premises, or regulatory actions.

If you fail to disclose a material fact, the insurer's remedies are now proportionate to the breach. An innocent mistake will not automatically void your entire policy, but a deliberate or reckless non-disclosure can still result in the insurer avoiding the contract entirely.

What to do next

  • Gather at least three quotes using different routes — direct from an insurer, through a broker, and via a trade association scheme if available.
  • Use the comparison table approach above to evaluate each quote on its merits, not just price.
  • Read the full policy wording (not just the summary) before you commit.
  • Verify the insurer is FCA-authorised using the Financial Services Register.
  • If you use a broker, consider asking them to explain the key differences between quotes rather than simply recommending the cheapest.
  • Set a calendar reminder for 10 weeks before your renewal date to start comparing again next year.

Official guidance and tools