Do You Need Business Insurance as a Company of One?

Here's the framing that makes insurance decisions easy: you're not buying protection against bad luck in general. You're buying protection against specific bills you couldn't pay from savings. A £200 camera repair is not an insurance problem. A client claiming your advice cost them £80,000 is. Walk through your actual risks with that lens and the shopping list writes itself — and it's shorter than the industry would like.

(Usual caveat: general orientation, not advice — policies, requirements and names vary by country and profession. US and UK terms below.)

The policies that matter for solo businesses

Professional indemnity / professional liability (E&O)

Covers claims that your work or advice caused a client financial loss — the consultant whose recommendation backfired, the developer whose bug cost sales, the designer whose work allegedly infringed something. For service businesses, this is the one that matters, for a blunt commercial reason as much as a protective one: serious clients increasingly require it in contracts before you can even start. Typical solo cost: roughly £/$150–500 a year depending on field and cover level. If clients rely on your judgement, this is the policy to price first.

General / public liability

Covers physical-world claims — someone tripping over your kit at a client site, property you damage while working. Essential if you visit client premises, run events or see clients in person; close to irrelevant for a fully-remote software business. Cheap (often ~£/$100–300/year) and frequently bundled with the above.

Cyber liability

The newest arrival on the "clients require it" list. Covers costs from breaches and data incidents — notification, recovery, some liability. Worth real consideration if you hold client data, run client systems, or work in anything data-adjacent; the requirement is spreading through B2B contracts the way indemnity requirements did a decade ago.

The ones people forget they need

Equipment/contents — only if losing your kit would actually strain you; check whether home insurance already covers business equipment (often it quietly doesn't).
Income protection / disability — for a company of one, you are the single point of failure, and this is the policy that reflects it. More expensive, more paperwork, and arguably more important than everything above for anyone whose household depends on their invoicing.
Employer's liability — legally required in the UK the moment you have almost any employee. File under "the day you hire."

What you can usually skip at this scale

Key person insurance (you'd be paying out to yourself), directors' cover for a one-person board with no outside shareholders, and most add-on bundles sold at checkout. Also skip the temptation to over-insure trivial property while under-insuring liability — the exposure that can actually end a solo business is a claim, not a laptop.

How the LLC question fits in

A common and expensive confusion: an LLC or limited company shields your personal assets from business debts — it does nothing to stop the business itself being sued, and it doesn't pay the legal bills when it is. Insurance pays bills; structure contains damage. They're complements, not substitutes, and the professionals who get sued tend to be glad they had both.

Buying it without the runaround

List your real exposures: Do clients rely on my advice? Do I enter premises? Do I hold data? Could I work if injured?
Check your contracts first — required cover levels are often specified, which conveniently sets your minimum.
Quote through a comparison broker for your profession (the freelancer-focused online brokers have made this a 20-minute job) and compare like-for-like cover levels, not just premiums. Excess/deductible size and claims handling reputation matter more than a £30 annual difference.
Diarise a yearly review — cover should track your contract sizes, not your founding year.

Buy insurance for the bill that would end the business. Everything smaller is what the emergency fund is for.