There are few things more vital to safeguarding a company than business insurance. For generations, business insurance has been the fundamental factor protecting companies from common risks like legal liability, property damage and financial loss.
As the digital world accelerates, many companies now require insurance that protects against modern-day threats, like cyber fraud, as well as traditional, onsite risks, including those to buildings and contents.
Our research has gathered more than 50 of the most prominent UK business insurance statistics for 2023. These include information on average costs, the size of the business insurance industry, as well as specific insurance types, like cyber insurance and professional indemnity cover.
On average, UK business insurers pay out around £22 million per day
Typically, around £7.6 million per day is paid out in business liability claims
The UK commercial property insurance market was worth over £9 billion in 2021 – a 20.2% rise from the previous year
Almost half (44%) of small-to-medium enterprises (SMEs) don’t have business insurance
The average cost of employers' liability for a single office worker is £61 per year – this rises to £213 for a manual worker
The average annual cost of public liability insurance in the UK is £120
Over a quarter (26%) of insurance claims made in the UK are related to professional indemnity
There are numerous types of business insurance on the UK market covering firms for various events and circumstances.
Many companies will have either a combination of different insurance policies or take out a sole policy combining a range of different business insurance types. The type of business insurance each company requires depends on the business size and the nature of the work being done.
Some of the most prominent types of business insurance are:
Employers’ liability insurance protects you if one of your employees becomes ill or injured as a result of working for your company. This type of insurance covers both full- and part-time employees, as well as volunteers and freelance or casual workers.
Note: Employers’ liability insurance is a legal requirement in the UK.
Public liability insurance covers your business against any claims from a client or member of the public who has been injured or had property damaged as a result of work carried out by your company.
Professional indemnity insurance covers your business against the cost of compensating clients for loss or damage resulting from negligent services or advice provided by your company.
Commercial buildings insurance covers the costs of repairing and rebuilding of your business premises in the event of adverse events like fires, floods, or storms.
Business contents insurance protects you against losses if assets at your premises are damaged or stolen (e.g. computers or workplace equipment).
Business interruption insurance offers protection against loss of income during periods when you cannot work as normal due to unforeseen circumstances.
Cyber insurance protects businesses against losses incurred from online threats (like cyber fraud and data breaches).
The latest business insurance stats show that the UK insurance industry is the largest in Europe and the fourth largest in the world based on total premiums written.
In terms of business insurance claims, the Association of British Insurers (ABI) found that UK insurers pay out approximately £22 million per day, on average.
£7.6 million per day comes from all liability claims
£1.8 million is attributed to employers' liability
The latest UK business insurance statistics found that the UK commercial property insurance market was worth over £9 billion in 2021. This represents annual growth of 20.2% over the previous year when the industry was valued at just over £7.5 billion.
Breakdown of the overall value of the UK commercial buildings insurance industry by year
The industry’s growth accelerated rapidly from 2017 when it was worth less than £6 billion. From here, consecutive annual rises of between 3% and 4% occurred before increasing by 9.4% between 2019 and 2020.
The latest findings mean that the business insurance industry’s worth increased by around 56% between 2017 and 2021 and enjoyed an average annual growth of around 10% over this period.
UK business insurance statistics reveal that almost half (44%) of small-to-medium enterprises (SMEs) had no insurance in 2022. This represents a 4% increase from the previous year, meaning that over 2.4 million UK businesses are working without insurance.
As over 99% of private UK businesses fall into the SME category, this means more than four in 10 UK firms were operating without insurance. A survey by Allianz found that nearly half (47%) of uninsured businesses considered their company too small to warrant an insurance policy.
A further 42% of respondents cited working from home as the main reason they’re uninsured, while around a third of people (34%) believed they didn't need insurance because no customers came to their premises.
Elsewhere, a report by Aviva found that around 17% of SMEs may not have employers’ liability (EL) insurance, which is a legal requirement for any business with employees that aren’t part of their own family.
Despite 56% of UK SMEs having some level of business insurance, a September 2022 report by Aviva found that half (50%) were underinsured for the overall value of their buildings and contents.
The same report found that around 45% of businesses with buildings insurance policies had at least one premises likely to be underinsured by 20%.
Various economic factors, such as inflation and supply chain issues, affect the costs required to fully insure your business. Despite this, just under a third (32%) of business owners in Aviva’s survey said they had not considered inflation or supply chain issues when taking out insurance, while a further 28% claimed they had not reviewed their sums insured over the last year.
Additionally, despite almost a fifth (21%) of businesses claiming they’d experienced business disruption of some kind, 62% said they either don’t have business interruption insurance or are unsure whether it’s already included in their policy.
The latest UK business insurance statistics found that the average cost of employers’ liability insurance for a single office worker was £61 per year in February 2022. This figure rises by 249% (to £213 per year) for any employee carrying out physical work, such as construction.
The cost of employers’ liability insurance increases substantially with the number of employees. The average annual price for two employees carrying out physical work is £213 – 66% more than the cost for one employee.
Similarly, insuring five physically active workers increases the annual costs to £753. This represents a 112% increase compared to insuring two such workers and 254% compared to insuring one.
According to research from AXA, the average annual cost for public liability insurance is £120. However, this figure can be substantially lower for smaller businesses, with some paying as little as £40 per year.
The latest UK business insurance statistics found that just over half (56%) of medium-sized businesses have cyber insurance, meaning around four in 10 (44%) have no cover against online threats, such as cyber fraud and data breaches.
This lack of cyber cover was even more evident in smaller businesses, with just four in 10 (40%) small businesses and 17% of micro-businesses claiming they’d taken out a cyber insurance policy.
Despite the high volumes of SMEs not taking out cyber insurance, a British Insurance Brokers Association (BIBA) report found that 96% of cyberattacks are directed at small-to-medium enterprises.
The UK energy sector suffers the most cybercrime losses on average. Recent UK business insurance stats found that the median average cost of cyber incidents for energy companies was over £27,000 in 2021 – 8% more than any other industry.
The financial services industry was the only other sector with an average cybercrime incident cost of more than £25,000. The exact figure of £25,413 is around 11% more than the retail and wholesale industry (the third most affected sector in the UK).
Five UK industries incur average cybercrime costs over £20,000. These are:
Retail and wholesale
Pharma and healthcare
Transport and distribution
There is a 37% drop in average costs between transport and distribution (£20,330) and government/non-profit (£12,707), followed by steady decreases in the remaining sectors.
Property was the industry with the 10th highest average costs for cybercrime, with its average figure of £7,116, around 74% lower than the energy industry, which is in pole position.
Recent UK business statistics found that professional indemnity-related claims are the most frequent type in the UK. A report from Allianz found that these claims make up more than a quarter (26%) of the annual total.
The majority of these are related to issues like:
Loss of money
Loss of documentation
Breach of copyright
The UK professional indemnity insurance market was estimated to be worth £2.9 billion in 2021. This represented a 13% rise in value from the previous year, with traditional professions like solicitors, accountants and financial advisors accounting for between 75% and 80% of the market.
Legal services are among the biggest buyers of professional indemnity policies, with purchases estimated to be worth around £340m.
The latest UK business claims statistics found that UK insurers paid out £179.9 billion in claims in 2020. This accounted for more than a fifth (20.5%) of the entire claims paid throughout Europe that year.
Liability insurance payouts have risen steadily since 2015, with UK insurance firms paying out around £13 billion in 2020 alone.
Costs accelerated in 2018 when they reached £9.8 billion. This represented a 53% rise from the previous year, the highest recorded figure at that time. From here, payouts remained consistent in 2019 before increasing by almost a third (31%) to £13 billion in 2020.
This means that the total cost of liability insurance payouts more than doubled (+103%) between 2016 and 2020.
The latest UK business insurance statistics found that fires, explosions and faulty workmanship are the biggest causes of loss of value in UK businesses, which together are responsible for nearly a quarter (24%) of all reported incidents.
A defective product was the only other reason (11%) cited in more than 10% of claims, with natural catastrophes and negligence/misadvice featuring in 9% and 7% of claims, respectively.
Business interruption insurance protects you against loss of income during periods when you can’t work normally due to unforeseen circumstances (e.g. building damage).
Business insurance is essential for any company looking to safeguard itself in case the worst should happen. While the type of cover you’re legally required to have will depend on both the size and nature of your business, it’s important to have a policy that protects you against all the adverse risks in your line of work.
Knowing how to claim on your business insurance beforehand ensures you’re well prepared to get your business back on track should the worst happen.
While the average cost of public liability insurance in the UK is around £120, these costs could be substantially lower for smaller businesses, with some paying as little as £40.
Though many e-commerce businesses may be operating without official company premises, it’s still vital that your stock and finances are protected in the event of damage, theft or cyber fraud.
A robust business insurance plan ensures that your e-commerce business remains protected from all the pitfalls of trading online.
The latest UK business insurance facts found that 44% of medium-sized UK businesses had no insurance in 2022.
Cyber fraud is a blanket term that describes crimes committed by hackers and scammers online. These crimes are undertaken to acquire a business’s sensitive information for monetary gain.
A data breach is a security violation in which private information is viewed, stolen, copied or altered by a person without access authorisation.
In business terms, loss of value refers to the loss in the value of a business resulting from alleged acts of harm and negligence including, but not limited to, building damage, breach of contract, fraud, defamation, product defect and theft.
SME refers to any private business that employs between 0 and 249 employees. SMEs fall into different categories:
Micro business - A business employing fewer than 10 employees
Small business - A business employing between 10 and 49 employees
Medium business - A business employing between 50 and 249 employees
Underinsured businesses are businesses that have taken out insurance policies that cover them for less than the overall value of their buildings and contents.
Cameron has worked within the SME industry for over five years, looking after all our SME commercial relations for money.co.uk including Business Loans, Business Current Accounts, and Business Credit Cards.