Business insurance
Insurance taken out for the purposes of the business — such as professional indemnity or public liability — is generally an allowable cost.
Sole traderAllowable
Ltd companyAllowable
EmployeeNot allowable
Conditions
- The policy must be for business purposes, such as professional indemnity, public liability, employer's liability or business contents.
- Personal insurance with no business purpose is not allowable.
- Employees generally cannot claim business insurance as a personal job expense.
Common mistakes
- Claiming personal life or health insurance with no genuine business basis.
- Including the private element of a mixed policy.
What to keep
- Policy schedules and premium invoices.
Real-world example
A freelance consultant pays for professional indemnity cover required by their clients. The premium is wholly for the business and is allowable in full.
Frequently asked
Is employer's liability insurance allowable?
Yes, where you employ staff and the cover is required for the business, the premium is generally an allowable cost.
Not sure how this applies to you?
The rules shift with your circumstances. A qualified accountant can confirm what you can claim and handle it for you.
Find an accountantRelated allowances
Source: HMRC guidance · Last checked 2026-03-01
This page is general information based on HMRC published guidance, not tax advice. Status shown is a plain-English summary — your own position can differ. Always check the HMRC source above and speak to a qualified accountant before making a claim.