Business Insurance During & After Administration UK
A company in administration still needs insurance, and the administrator takes control of arranging it. When a licensed insolvency practitioner is appointed as administrator, the directors' powers largely stop. The administrator decides which policies continue, which are cancelled, and what extra cover is needed while the business trades or its assets are sold. Insurers can still cancel on insolvency, because insurance contracts are excluded from the ban on suppliers terminating for insolvency. After administration, the business usually ends up rescued, sold, or liquidated. Whichever route it takes, the administration becomes part of the directors' history. Every future proposal form that asks about insolvency must be answered yes, and specialist insurers will want to know why it happened and what changed.
Key facts at a glance
- The administrator controls the insurance. Directors can't renew, cancel or change cover once an administrator is appointed.
- Insurers can still cancel. Insurance contracts are excluded from the 2020 rules that stop suppliers ending contracts because of insolvency.
- Employers' liability must stay in place. It remains compulsory for as long as anyone is employed, including during administration.
- The moratorium doesn't stop the insurer. Claims against the company need permission, but injured people can still reach its liability insurer.
- Pre-pack buyers start fresh. A newco that buys the business needs its own insurance from day one, disclosed as a connected company.
- It must be disclosed afterwards. Administration counts as insolvency on almost every proposal form, for every director involved.
Administration is the UK's main rescue procedure for companies in financial trouble. A licensed insolvency practitioner is appointed to run the company with three possible aims: rescue the company as a going concern, get creditors a better result than an immediate liquidation would, or sell assets to pay secured and preferential creditors. A statutory moratorium protects the company from most legal action while that happens.
Insurance is one of the first things to go wrong. Direct debits bounce, insurers receive notice of the appointment, and policies built for a solvent trading company suddenly carry insolvency clauses nobody read. Then, months later, directors trying to start again find every insurer asking the same question about previous insolvency. This guide covers both stages: keeping the right cover in place during administration, and getting the next business insured after it.
In this guide
- Who controls the insurance
- Can insurers cancel?
- Cover while the business trades
- Claims and the moratorium
- What happens at the end
- Insuring a pre-pack buyer
- The Insurability Framework
- Disclosing it afterwards
- Directors' and officers' cover
- What drives the cost
- Illustrative case studies
- Step by step
- Glossary
- Frequently asked questions
Who controls the insurance when a company goes into administration?
The administrator. From appointment, the administrator manages the company's affairs, business and property, and the directors can only use their powers with the administrator's consent. That includes deciding which insurance continues, what is cancelled, and what new cover the administration needs. Directors should hand over policy schedules and broker details immediately.
Administrators are appointed under Schedule B1 of the Insolvency Act 1986, by the court, by a qualifying floating charge holder, or by the company or its directors. Whoever makes the appointment, the result for insurance is the same: the administrator becomes responsible for protecting the company's assets for creditors.
In practice, administrators review every policy in the first few days. They usually keep the covers needed to trade and protect assets, and cancel the rest. Many insolvency practitioners also have their own insurance facilities for assets in their control, which can take over from the company's policies. The directors' job at this stage is to give the administrator a full picture: every policy, its renewal date, how premiums are paid, and any open claims.
Can insurers cancel your policies when you go into administration?
Yes, if the policy allows it. The Corporate Insolvency and Governance Act 2020 stopped most suppliers ending contracts because a customer entered an insolvency process, but insurance contracts are among the exclusions. Insurers can therefore rely on insolvency or cancellation clauses, and many policies are cancelled or adjusted shortly after the appointment.
Most commercial policies give the insurer a right to cancel on notice, and some name insolvency events specifically. In administration, three things commonly trigger cancellation or a review:
- Missed premiums. Direct debits fail when bank accounts are frozen or redirected, and premium finance agreements are terminated for non-payment.
- A change in the risk. A trading business becoming a wind-down, or premises becoming unoccupied, changes what the insurer agreed to cover.
- An insolvency clause. Some wordings allow cancellation, or require notification, when an administrator is appointed.
The administrator will usually negotiate with the insurer or replace the cover. What matters for directors is that the company is never left uninsured where cover is compulsory, starting with employers' liability.
What cover does a company need while it trades in administration?
Whatever it needs to keep trading safely and protect its assets. Employers' liability is compulsory while there are employees. Public and products liability, property, stock and motor cover usually need to continue while the business operates or its assets are being sold. Unoccupied premises need specific cover, because standard policies restrict it after about 30 days.
| Cover | During administration | Watch out for |
|---|---|---|
| Employers' liability | Compulsory while anyone is employed. | Daily fines for being uninsured. Keep the certificate current. |
| Public and products liability | Needed while the business trades or sells goods. | Products already sold can still produce claims later. |
| Property and stock | Protects the assets the administrator needs to sell. | Sums insured, and occupancy conditions if sites close. |
| Unoccupied property | Needed once premises are closed or emptied. | Most standard policies limit cover after about 30 days empty. |
| Motor fleet | Needed while vehicles are used or awaiting sale. | Vehicles left on site still need cover against fire and theft. |
| Business interruption | Often reduced or cancelled once trading winds down. | Only worth keeping if the business is being sold as a going concern. |
Where is your company in the process?
Pick the stage that fits to see the insurance priorities.
Choose an option above to see the result.
Protect continuity. Give the administrator every policy schedule and your broker's details. Check how premiums are being paid now that accounts may be frozen. Confirm employers' liability, public liability and property cover are still live, and notify any outstanding claims or circumstances.
Protect the assets. Closed sites need unoccupied property cover and security conditions met. Vehicles and plant awaiting sale need cover until ownership passes. Employers' liability can only stop once the last employee has gone.
New company, new cover. The buyer needs its own insurance from completion. Insurers will ask about the connection to the old company and its directors. Our phoenix company guide covers this route in detail.
Disclose and explain. Every director involved will need to answer yes to insolvency questions. Prepare a short account of the cause and what has changed. If the company moved into liquidation afterwards, see our guide to insurance after a CVL.
What happens to claims during the administration moratorium?
The moratorium stops most legal action against the company without the administrator's consent or the court's permission. It doesn't stop the company's liability insurer paying valid claims, and injured people can still pursue that insurer. Claims made by the company, such as for fire damage, are handled by the administrator for the benefit of creditors.
Two kinds of claim matter here. Claims against the company, such as an injured employee or a customer, are restricted by the moratorium. Under the Third Parties (Rights against Insurers) Act 2010, though, the claimant can pursue the company's liability insurer directly, so valid injury claims still get paid.
Claims by the company, such as fire, flood or theft, become assets of the administration. The administrator pursues them, and any payment goes towards creditors. Directors should tell the administrator about any incident that hasn't yet been notified, because late notification can lose the claim entirely.
What happens to insurance when the administration ends?
It depends on the exit. If the company is rescued, often through a CVA, its insurance continues, with the administration disclosed at renewal. If the business is sold, the buyer arranges its own cover. If the company moves into liquidation or is dissolved, its policies end, and the directors carry the history into whatever they do next.
Administration normally lasts up to a year unless it's extended. The common ways out are:
- Company rescue, sometimes with a company voluntary arrangement. The company keeps trading, and insurers will want the full story at renewal. Our CVA insurance guide covers that position.
- Sale of the business, either during the administration or as a pre-pack. The buyer insures the business in its own name.
- Creditors' voluntary liquidation, used to distribute remaining funds. The old company's insurance ends with it.
- Dissolution, when nothing is left to distribute.
How do you insure a business bought through a pre-pack?
As a new company, with its own policies in place from the moment the sale completes. Because pre-pack buyers are often connected to the old directors, insurers will ask about the previous company and its administration. Disclose the connection, explain why the old company failed, and show what's different in the new structure.
A pre-pack sale is agreed before the administrator is appointed and completed straight afterwards. Since 2021, a sale to a connected party in the first eight weeks needs either creditor approval or an independent evaluator's report. That evaluator's report is useful to insurers too, because it shows the sale was tested independently.
The new company has no trading history of its own, so insurers rate it on the people running it. Arrange cover to start on the completion date, because the old company's policies won't protect assets the new company now owns.
How does The Insurability Framework™ apply after administration?
The Insurability Framework turns an administration into a story an underwriter can follow and price. It covers why the company entered administration, how the administration ended, what has changed in the new business, and which specialist markets write this kind of risk. A clear account usually earns far better terms than a tick in an insolvency box.
The Insurability Framework builds the submission in four parts:
- Cause. What pushed the company into administration, supported by the administrator's proposals where possible.
- Outcome. Rescue, sale, liquidation or dissolution, and what creditors received.
- Change. Funding, customers, contract terms, controls and management.
- Market. Lloyd's syndicates and specialist MGAs that consider post-insolvency risks.
Are you ready to present an administration to an underwriter?
Tick everything you can already provide.
Whatever you have, we can work with it and help fill the gaps.
Do you have to disclose a past administration to insurers?
Yes. Administration is a formal insolvency procedure, so it counts on almost every proposal form that asks whether a business or any director has been involved in insolvency. It's a material circumstance under the Insurance Act 2015 whether or not the form asks, and leaving it out can lead to claims being cut or refused.
The Insurance Act 2015 requires a fair presentation of the risk. A rescued company must disclose its own administration at renewal. A director starting a new business must disclose involvement in the old one. Many forms look back five or ten years, and some ask about any involvement ever.
Administrations are published in The Gazette and recorded at Companies House, so insurers can find them easily. See our guide on policies voided for non-disclosure for what happens when one isn't disclosed.
How does administration affect directors' and officers' cover?
The company's D&O policy is important during and after administration, because administrators and later liquidators can investigate directors' conduct and bring claims. Most D&O policies go into run-off when an insolvency event happens. Notify any circumstances early, keep the wording, and check how long the run-off lasts.
Administrators report on directors' conduct to the Insolvency Service, and claims for wrongful trading or misfeasance can follow if the company later moves into liquidation. Conduct reports can also lead to disqualification proceedings, covered in our guide to insurance after director disqualification.
Many directors' and officers' policies pay defence costs for these investigations and claims, subject to their exclusions. Directors of a rescued company should also check that the D&O renewal won't exclude anything connected with the administration.
What drives the cost of insurance after administration?
The trade sets the baseline, and the administration then narrows the market and adds a loading. How much depends on how long ago it happened, why, how it ended, what creditors lost, the claims record, and what has changed. A rescued company with a clean record since usually finds terms improve within a few renewals.
- Outcome. A rescue or going-concern sale is viewed more favourably than a liquidation.
- Cause. External shocks are easier to place than failures of control.
- Time since. Each clean year after the administration widens the market.
- Creditor losses. Large unpaid debts, especially to HMRC, draw more scrutiny.
- Claims history. Claims before or during the administration add to the loading.
- Conduct. Any disqualification proceedings shrink the market sharply.
- Change. New funding, controls and management offset much of the concern.
How hard will your risk be to place?
Choose the description that fits best.
Choose a description above to see the indication.
Standard to specialist market. Several insurers will consider this with a clear explanation, and terms may be close to standard. Keep disclosing it consistently at each renewal.
Specialist market. Quote engines will decline. Lloyd's syndicates and MGAs will consider it with a strong account of the cause, the sale and what has changed. An evaluator's report helps.
Specialist market with careful presentation. Fewer insurers will quote. Expect closer questions on property and liability, possibly with higher excesses in the first year.
Hard to place. A small number of specialist markets will consider it, usually with restricted cover. Don't approach insurers one at a time, because each decline has to be disclosed on the next application.
Illustrative case studies
These composite examples are illustrative only. They are not real clients, and names and details are invented.
Illustrative case 1
The manufacturer whose premium finance collapsed
A precision engineering company entered administration after losing its largest customer. Within a week, its premium finance agreement was terminated for a missed instalment, and the insurer issued notice to cancel the combined policy. Twenty staff were still working while the administrator looked for a buyer.
The administrator's broker arranged short-term employers' liability, public liability and property cover through an insolvency facility within days, so trading continued without a gap. The business was sold as a going concern six weeks later, and the buyer arranged its own cover from completion.
Illustrative case 2
The retailer bought back through a pre-pack
A regional chain of homeware shops went into administration after a sharp fall in sales and rising rents. The directors bought the profitable stores back through a pre-pack, supported by an evaluator's report. The new company needed property, stock, liability and employers' liability cover from the day of completion.
We disclosed the connection, the cause of failure and the evaluator's report, and showed the reduced store estate and renegotiated leases. A specialist insurer offered a package policy with a moderate loading, reviewed after the first year.
Illustrative case 3
The rescued company that didn't mention it at renewal
A haulage company came out of administration through a CVA and kept trading. At its next fleet renewal, the director answered no to the insolvency question, believing a rescue didn't count. After a serious accident months later, the insurer found the administration at Companies House.
The insurer concluded it would have charged a significantly higher premium and reduced the claim proportionately. The lesson: a rescue is still an insolvency event, and it must be disclosed at every renewal.
How do you keep a business insured through and after administration?
Give the administrator every policy straight away, keep compulsory cover live, notify claims early, and plan new cover for any buyer or new company before completion. Afterwards, disclose the administration consistently, explain the cause and outcome, and use a specialist broker rather than quote engines.
- Hand over the insurance file. Every schedule, renewal date, payment method and open claim.
- Keep employers' liability in force. It's compulsory for as long as anyone is employed.
- Check how premiums are paid. Frozen accounts and terminated finance agreements are the most common cause of sudden cancellation.
- Notify incidents now. Late notification can lose cover entirely.
- Cover empty premises properly. Unoccupied conditions apply quickly.
- Insure any buyer from completion. Old policies don't protect a new owner.
- Disclose afterwards, every time. The same facts on every form and at every renewal.
- Use a specialist broker. Someone with access to the markets that write post-insolvency risks.
Glossary
- Administration
- A formal insolvency procedure in which a licensed insolvency practitioner runs the company to rescue it or get a better result for creditors.
- Administrator
- The insolvency practitioner appointed to manage the company during administration.
- Moratorium
- The legal protection that stops most action against a company in administration without consent or court permission.
- Statement of proposals
- The administrator's plan for achieving the purpose of the administration, sent to creditors.
- Pre-pack
- A sale of the business agreed before the administrator is appointed and completed immediately afterwards.
- Connected party
- A buyer linked to the company, such as its directors or their associates.
- Evaluator's report
- An independent opinion on a connected-party pre-pack sale, required where creditors haven't approved it.
- Company voluntary arrangement (CVA)
- A binding agreement with creditors that lets a company keep trading while repaying debts over time.
- Creditors' voluntary liquidation (CVL)
- A formal process to close an insolvent company and distribute what is left to creditors.
- Floating charge holder
- A lender, usually a bank, with security over the company's changing assets, who can appoint an administrator.
- Premium finance
- A loan that spreads an insurance premium into instalments. Missed payments lead to cancellation.
- Insolvency clause
- A policy term that lets the insurer cancel, or requires notification, if the insured becomes insolvent.
- Unoccupied property condition
- A policy term restricting cover when premises are empty, usually after about 30 days.
- Run-off
- Continuing cover for past acts after a company stops trading or undergoes a change of control.
- Fair presentation
- The duty under the Insurance Act 2015 to disclose every material circumstance to an insurer.
- Managing general agent (MGA)
- A specialist underwriting agency writing business for insurers, often in hard-to-place classes.
Frequently asked questions
Does a company in administration still need insurance?
Yes. Employers' liability is compulsory for as long as anyone is employed. The administrator also needs liability, property and motor cover to keep trading safely and protect assets for creditors. The administrator decides what continues.
Can my insurer cancel because we've gone into administration?
Yes, if the policy allows it. Insurance contracts are excluded from the 2020 rules that stop most suppliers ending contracts on insolvency. Many cancellations actually come from missed premiums when accounts are frozen.
Who deals with the insurance once the administrator is appointed?
The administrator. Directors can only use their powers with the administrator's consent, so renewals, cancellations and claims all go through the administrator.
What happens to an insurance claim during administration?
Claims by the company, such as for fire damage, are pursued by the administrator for creditors. Claims against the company are restricted by the moratorium, but injured people can still claim directly from the company's liability insurer.
Does a pre-pack buyer take over the old company's insurance?
No. The buyer is a separate company and needs its own policies from completion. Insurers will ask about any connection to the old company and its directors.
Do I have to disclose a past administration?
Yes. It's an insolvency event and a material circumstance. It applies to the company itself if it was rescued, and to every director involved if they start or join another business.
Does a company rescued through a CVA have to disclose the administration?
Yes. A rescue is still an insolvency event. Disclose the administration and the CVA at every renewal until the insurer's look-back period has passed, and longer if asked.
Will premiums be higher after administration?
Usually for a few years. The loading depends on the cause, the outcome, the claims record and what has changed. A rescued business with a clean record since often sees terms improve within a few renewals.
Is administration treated differently from liquidation by insurers?
Often slightly more favourably, especially if the business was rescued or sold as a going concern. Both are insolvency events and both must be disclosed.
What happens to D&O cover in administration?
Most D&O policies go into run-off on an insolvency event, continuing to cover past acts. Notify any investigations or potential claims early, and keep a copy of the wording.
What if our premises are empty while the administrator sells them?
Standard policies restrict cover once premises are unoccupied, usually after about 30 days. The administrator needs specific unoccupied property cover and must meet its security and inspection conditions.
Do you place cover after administration?
Yes. We place cover for rescued companies, pre-pack buyers and directors starting again after administration. We use Lloyd's syndicates and specialist MGAs that look at the full story rather than a single insolvency question.
Related guides
About this guide. This guide is general information about insurance during and after administration in the UK. It is not legal, insolvency or financial advice, and it is not a quotation or an offer of cover. Whether cover is available, and on what terms, depends on each insurer's underwriting and the policy wording.
For advice on the administration itself, speak to the administrator or a licensed insolvency practitioner. The case studies are illustrative composites, not real clients.
Miller & Partner Limited is an Appointed Representative of Gauntlet Risk Management Ltd, which is authorised and regulated by the Financial Conduct Authority. Miller & Partner Limited is registered in England and Wales and trades from Vivian House, Roman Bridge Close, Mumbles, Swansea SA3 5BG. Contact us at enquiries@millerandpartner.co.uk.
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