You must have business insurance if . . .
You employ staff
If you employ staff the law states that you MUST have Employers Liability Insurance in place. Employers Liability Insurance protects you against any claims if an employee injures themselves at work. If you are the only employee of your company it does not need to have Employers Liability Insurance.
You deal with the public or they visit your premises
You should consider taking out Public Liability Insurance. Public Liability Insurance is a core requirement for many businesses and covers compensation for injury or damage to the public, or their property, caused in the process of you going about your business. It also covers legal fees and other expenses to do with defending any kind of personal injury claim.
You sell products
You may want to consider taking out Product Liability Insurance. Product Liability Insurance covers your liability to pay compensation for damage or injury caused by something going wrong with the product (but not if the problem is due to an inferior product that is not fit for purpose).
You provide advice or services
You should consider taking out Professional Indemnity Insurance. Professional Indemnity Insurance is compulsory for certain professions, such as lawyers and accountants, and provides protection against claims that the advice you have provided is incorrect, or the services you have provided are negligent.
You have specialist tools or equipment
If you have specialist tools or equipment that are costly or difficult to replace you might wish to consider protecting these with an appropriate Tradesman Insurance policy
You transport goods
If you transport goods as part of your business operations, you should consider Goods In Transit Insurance which will cover you for loss or damage of the goods during their journey.
You run one or more business vehicles
You must have appropriate Business Van Insurance
or Business Car Insurance
. Your personal car insurance policy is unlikely to cover you for business use.