Insurance After Insolvency or Liquidation UK: Specialist Broker
Why Insurance After Insolvency Is Different
If you have been refused insurance after a liquidation or insolvency, you are in the right place. A previous company failure does not make you uninsurable — it makes you the wrong fit for mainstream insurers whose automated systems decline anything with insolvency in its history. We are specialists in placing exactly these risks, through the Lloyd's market and specialist insurers who assess your situation individually rather than rejecting it outright — our business insurance after insolvency page sets out how those placements are structured, including phoenix companies, CVAs and directors carrying a prior liquidation. If you have been declined elsewhere, that is precisely what we sort.
Whether you are a director starting a new business after a previous liquidation, winding a company down and need run-off cover, or facing personal claims as a former director, we can arrange the cover you need — and this page explains exactly how it works. The same approach applies to businesses refused cover for any other adverse-history reason, including business insurance with a CCJ or adverse credit, which is scored separately from the insolvency itself and is usually what stops the monthly payment facility.
Been declined? That is the risk we are set up to place.
Tell us what happened and we will tell you whether it is placeable, usually the same working day. Asking costs nothing, and you are dealing with a broker who places post-insolvency risks every week rather than an automated system that stops at the word liquidation.
Miller & Partner place hard-to-insure commercial risks through the Lloyd's market and specialist insurers. Over 13 years in specialist broking, 5-star rated on Google.
1. What Happens to Your Insurance When Insolvency Begins
The moment a company enters administration, a creditors' voluntary liquidation (CVL), or is subject to a compulsory winding-up order, every existing insurance policy must be reviewed immediately. The consequences of not doing so can be severe: policies may lapse, exclusions activate, and directors can find themselves personally exposed with no cover in place.
Policy Cancellation and Insolvency Clauses
Most commercial insurance policies — public liability, professional indemnity, commercial property, and commercial combined — contain clauses that give the insurer the right to cancel cover or restrict new claims once insolvency proceedings begin. These are not standard across all policies, but they are common enough that every wording must be checked without delay.
Typical insolvency clause effects include:
- The insurer may cancel the policy with short or no notice
- Claims arising after the insolvency trigger date may be excluded
- Premium refunds may be reduced or withheld for administrative costs
- The liquidator takes over the policyholder position and any refunds form part of the estate
Employers' Liability: The Legal Obligation That Survives Insolvency
Regardless of what happens to other policies, employers' liability (EL) insurance remains a statutory requirement under the Employers' Liability (Compulsory Insurance) Act 1969 as long as employees are on the payroll. This obligation does not disappear when a company enters administration or liquidation. The administrator or liquidator takes on responsibility for ensuring EL cover is maintained while employees remain engaged.
The penalty for a gap in EL cover is up to £2,500 per day. This fine can apply to the business, the administrator, or in some circumstances, personally to directors. Maintaining EL cover is non-negotiable until the last employee is formally made redundant.
Motor Insurance
Motor insurance is similarly a legal requirement for any vehicle used on public roads. During insolvency, vehicles that form part of the company's assets may still be in use — by administrators managing the wind-down, or by employees during their notice periods. Motor cover must continue to be maintained for any vehicle in use, regardless of the company's financial position.
Which Insurance Do You Need? Find Out in Seconds
Your situation determines exactly which covers matter most. Select the option that best describes where you are right now:
Insurance Situation Checker
Select your current situation to see which covers apply to you
Business in Administration — Still Trading
- Employers' Liability LEGAL REQUIREMENT — must be maintained without interruption
- Public Liability — check your wording; notify insurer of administration status immediately
- Motor insurance — continues to be required for all vehicles in use
- Professional Indemnity — review for insolvency clauses; claims may be restricted
- Commercial Property — notify insurer; cover may continue but conditions may change
- Directors' & Officers' (D&O) — critical; claims from creditors may arise during or after administration
Closing via Creditors' Voluntary Liquidation
- Employers' Liability LEGAL REQUIREMENT — until the last employee is formally redundant
- Motor insurance — until all vehicles are sold, returned, or taken off the road
- Run-off Professional Indemnity IMPORTANT — protects against claims from past work; 6-year minimum
- Run-off D&O — protects directors personally from creditor, HMRC, or regulatory claims post-liquidation
- Commercial property — arrange interim cover if premises remain in your control during wind-down
Starting a New Business After a Previous Liquidation
- Employers' Liability LEGAL REQUIREMENT if you have staff — must disclose previous insolvency on proposal
- Public Liability — available via specialist insurers; disclose previous liquidation fully
- Professional Indemnity — available; previous insolvency must be declared; terms may be restricted in year one
- Commercial Combined — the most efficient way to package all business covers in one policy
- Check whether you also need run-off cover from the previous company — this is separate and often overlooked
Former Director Facing Potential Personal Claims
- Run-off D&O URGENT — personal liability cover for claims alleging mismanagement, breach of duty, wrongful trading
- Run-off Professional Indemnity — if you provided advice or professional services in your director role
- Legal expenses cover — some run-off D&O policies include defence costs; check the wording
- Check whether your former company's existing D&O policy has a run-off extension — if not, you may need to arrange cover independently
2. The Impact on Each Policy Type
Different policies are affected in different ways when a business becomes insolvent. The table below shows what typically happens to each common policy type at each stage of the insolvency process — and what action is required.
Policy Status Across the Insolvency Lifecycle
(trading normally)
Suspected
/ CVL Begins
Dissolved
Trading
Review now
Note that during administration and liquidation, premises may become unoccupied or held by the administrator with no day-to-day activity — at which point standard property cover may be restricted and specialist unoccupied property insurance may be required to keep the building properly protected.
3. Run-Off Insurance: What It Is and When You Need It
Run-off insurance is one of the most misunderstood and most overlooked aspects of the post-insolvency insurance landscape. Many directors assume that once the business has closed and the final accounts are settled, their insurance obligations are over. In most cases, that assumption is wrong.
What Run-Off Insurance Covers
Run-off insurance — sometimes called tail cover — protects against claims that are made after a business has ceased trading but relate to work done, advice given, or decisions made while the business was still operating. The most common types are:
- Professional Indemnity run-off — for businesses that provided professional services, advice, designs, or specifications. A former client can bring a negligence claim years after the work was completed, even if the business no longer exists.
- Directors' and Officers' (D&O) run-off — protects individual directors personally from claims alleging mismanagement, wrongful trading, breach of fiduciary duty, or failure to act in creditors' interests. Creditors, HMRC, the Insolvency Service, or former employees can bring these claims well after liquidation.
- Employers' Liability run-off — required in some circumstances where historical employer liability claims (particularly for occupational disease with long latency periods) may arise years after employment has ended.
How Long Does Run-Off Cover Need to Last?
The Limitation Act 1980 sets the standard time limit for contract claims at six years from the date of the breach. For negligence claims involving personal injury, the period is three years from the date the claimant knew or ought to have known of the injury. Most PI insurers therefore offer and require a minimum run-off period of six years.
For D&O run-off, the appropriate period depends on the complexity of the insolvency and the likelihood of regulatory investigation. Three to six years is the typical range, but high-profile collapses or those involving HMRC disputes or Insolvency Service investigations may warrant longer cover.
4. Directors' and Officers' Insurance After Insolvency
Personal exposure is one of the most significant and least well-understood risks for directors of companies that have entered insolvency. The corporate veil that protects shareholders from company liabilities does not protect directors from claims that allege personal wrongdoing or mismanagement of the company's affairs.
Who Can Bring Claims Against Directors?
Following insolvency, claims against directors can come from multiple directions:
- The liquidator — who has a statutory duty to investigate director conduct and may bring misfeasance or wrongful trading claims on behalf of creditors
- Individual creditors — particularly major unsecured creditors who believe they were disadvantaged by director decisions
- HMRC — which has extended powers under the Finance Act 2020 to pursue directors personally for unpaid PAYE, NIC, and VAT in certain circumstances
- The Insolvency Service — which investigates director conduct and can apply for disqualification orders lasting up to 15 years
- Former employees — for failure to consult on redundancy, unpaid wages, or discrimination claims
- Regulators — in regulated industries, regulatory action can follow insolvency independently of the liquidation process
What Good D&O Run-Off Cover Looks Like
A well-structured run-off D&O policy for a director of an insolvent company should include:
- Coverage for defence costs as well as any settlement or award
- Side A cover — protecting the individual director directly, not just the company
- Cover for regulatory investigation costs, not just civil claims
- A retroactive date that goes back to the start of the director's tenure
- HMRC investigation cover as an extension (where available)
For more on directors' liability insurance more broadly, see our guide to directors and officers liability insurance.
Run-off gets much harder once the company is dissolved.
If liquidation is coming, professional indemnity and D&O run-off want to be in place before the company is struck off. After dissolution some insurers will not quote at all. Send us the position now and we will come back with what is achievable.
We arrange run-off professional indemnity and directors' and officers' cover for dissolved entities and former directors, including cases other brokers have handed back.
5. Getting Insurance for a New Business After a Previous Liquidation
Starting again after a liquidation is not unusual. The UK's insolvency framework is deliberately designed to allow directors to learn from failure and try again — the vast majority of directors of insolvent companies face no personal sanctions and are free to form and direct new businesses immediately. The challenge is that mainstream insurers use automated systems that flag previous insolvency as a high-risk indicator and decline automatically. Specialist brokers access a different tier of the market where cases are assessed individually — the same route used for all adverse-risk insurance placements.
The Disclosure Obligation
This is the single most important point: you must disclose a previous insolvency on every insurance proposal form where the question is asked — and most commercial insurance proposals do ask. The same duty applies to any business CCJs or personal director CCJs that arose from the previous insolvency — see our guide on insurance for businesses with CCJs for the specific disclosure issues these create. The legal and commercial consequences of non-disclosure are severe:
- A policy issued on the basis of incomplete information can be voided from inception — as if it never existed
- Any claims made under that policy can be declined
- You may face allegations of fraud or misrepresentation in serious cases
- The FCA's rules on fair presentation of risk (under the Insurance Act 2015) require full and accurate disclosure of all material facts
What Insurers Want to See
When approaching insurers for a new business following a previous insolvency, the following documentation and information materially improves the outcome:
- A clear explanation of the circumstances — what caused the insolvency, whether it was external (market conditions, a major client loss) or internal (poor management), and what role you specifically played
- Insolvency practitioner's report — the statement of affairs and practitioners' findings, particularly if they confirm no misconduct
- Evidence of no director disqualification — confirmation that you remain a fit and proper person to act as a director
- A business plan for the new entity — demonstrating that the new business has a sound financial model and clear risk management processes
- Financial projections — showing that the new business is adequately capitalised and not immediately at risk of the same pressures
- Confirmation of run-off arrangements — showing that liabilities from the previous entity are properly managed
Which Covers Are Available and What to Expect
| Cover | Available Post-Insolvency? | Typical Premium Impact | Key Conditions |
|---|---|---|---|
| Employers' Liability | Yes — mandatory | Plus 15 to 40 per cent in year one | Full disclosure required; cover may exclude prior entity claims |
| Public Liability | Yes via specialist insurers | Plus 20 to 50 per cent in year one | May exclude claims arising from prior entity's activities |
| Professional Indemnity | Yes — with careful presentation | Plus 25 to 75 per cent initially | Retroactive date usually limited to new entity start date |
| Commercial Property | Yes | Plus 15 to 35 per cent | May face higher excesses or additional conditions |
| D&O (new entity) | Yes — advisable | Plus 20 to 60 per cent | Usually excludes claims relating to prior insolvency |
Premium loadings typically reduce significantly after three to five years of clean trading in the new entity, provided there are no further claims or adverse events. Working with the same specialist broker across those years — who can demonstrate the improved record to insurers — accelerates this process.
6. Six Steps to Securing Cover After Insolvency
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Act before a gap in cover arises. Review all existing policies the moment insolvency becomes a serious possibility — not after it is confirmed. Many insolvency clauses activate automatically; by the time the process formally begins, you may already have no cover.
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Identify which covers remain legally mandatory. Employers' liability and motor insurance must continue as long as employees are engaged and vehicles are in use. Arrange replacement cover immediately if your existing insurer cancels or restricts these.
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Secure run-off insurance before dissolution. Run-off PI and D&O should be arranged before the company is formally dissolved. After dissolution, it becomes significantly harder and more expensive to obtain, and some insurers will decline entirely.
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Prepare your disclosure documentation. Gather the insolvency practitioner's report, statement of affairs, evidence of no disqualification, and a clear written explanation of the insolvency circumstances. This documentation is the foundation of any specialist insurer submission.
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Engage a specialist broker, not a comparison site. Post-insolvency insurance is not available via aggregators — and every comparison-site decline becomes itself a disclosable fact on future proposals, compounding the placement problem. This is the same decline cascade we describe in our guide on insurance for businesses refused cover. Specialist broker placement uses single-market submission with prepared narrative.
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Plan for year-on-year improvement. In year one, accept that terms will be restricted and premiums will be higher. In year two and beyond, provide your insurer with evidence of clean trading, good governance, and sound financial management. This is how the post-insolvency loading comes off.
7. Illustrative Case Studies
The three examples below are composites, built from the kinds of placement we handle regularly. They are written to show how the process typically runs and what outcomes are realistic. They are not accounts of identifiable clients, and the figures are indicative rather than quoted terms.
Example 1 — Manufacturing Business, Wales: Full Cover Secured in 60 Days
A medium-sized manufacturing company enters a creditors' voluntary liquidation following the collapse of its largest client, which accounted for 60 per cent of revenue. The two directors have no previous insolvency history, no director disqualification, and clear evidence that the liquidation was driven by an external event rather than mismanagement.
Working with a specialist broker, they prepare a full disclosure pack — including the liquidator's report confirming no misconduct, a business plan for the new entity, and financial projections demonstrating 12-month viability. The new business secures employers' liability, public liability, and commercial combined cover within 60 days, with a premium loading in the region of 25 to 30 per cent in year one. By year three that loading has come off entirely.
Example 2 — Professional Consultancy: Run-Off Cover Responds Two Years Later
A management consultancy goes into administration. The directors arrange a six-year run-off professional indemnity policy at the point of administration, at a cost of roughly 180 per cent of their final annual PI premium, paid once.
Two years later a former client brings a negligence claim relating to advice given 18 months before the administration. The run-off policy responds in full, meeting both defence costs and settlement. Without run-off cover those costs would have fallen on the directors personally, the company itself having been dissolved.
Example 3 — Retail Operator: Cover Voided for Non-Disclosure
A retail operator attempts to insure a new company after a previous liquidation. On the proposal form, the question asking whether any director has been connected with a company that entered liquidation in the last five years is answered no. The insurer later identifies the previous liquidation during routine checks and voids the policy from inception.
The business is left exposed during a period when a public liability claim is being pursued by a customer. The claim cannot be defended at the insurer's expense and the operator meets the costs personally. The point this illustrates: non-disclosure is never the lower-risk option.
8. Regulatory and Legal Obligations: A Summary
The regulatory framework around insolvency and insurance involves several overlapping bodies and pieces of legislation. Directors should be aware of the following:
| Legislation / Body | Obligation | Insurance Relevance |
|---|---|---|
| Employers' Liability (Compulsory Insurance) Act 1969 | Maintain EL cover while employees are engaged — minimum £5m | Continues through administration and liquidation; £2,500/day fine for gaps |
| Insurance Act 2015 | Fair presentation of risk — disclose all material facts | Non-disclosure of insolvency history can void a policy from inception |
| Insolvency Act 1986 | Directors' duties to creditors once insolvency suspected; wrongful trading provisions | Creates the basis for D&O claims post-liquidation |
| Finance Act 2020 | HMRC can pursue directors personally for certain unpaid taxes in cases of insolvency | D&O policies should include HMRC investigation cover where possible |
| Company Directors Disqualification Act 1986 | Disqualification of 2 to 15 years following a finding of unfit conduct | Run-off D&O should cover the costs of Insolvency Service investigation proceedings |
| Limitation Act 1980 | Six-year limitation period for contract claims; three years for personal injury | Defines the minimum run-off period required for PI and D&O cover |
Frequently Asked Questions
Yes. A previous insolvency or liquidation does not prevent you from obtaining business insurance. Mainstream insurers with automated underwriting systems will often decline, but specialist brokers can access insurers who assess post-insolvency applications on an individual basis. Full and accurate disclosure of the insolvency history is essential, because non-disclosure can void any policy subsequently issued. With proper documentation and the right broker, cover is obtainable in most circumstances.
Most commercial insurance policies contain insolvency clauses that allow the insurer to cancel cover or restrict new claims from the point insolvency proceedings begin. Employers' liability must be maintained as a legal requirement even during insolvency if employees remain. Directors should review every policy wording immediately when insolvency becomes likely and arrange replacement cover before any gaps arise. The liquidator steps into the policyholder position and any refunded premiums form part of the insolvent estate.
In most cases, yes. Run-off insurance, particularly for professional indemnity and directors' and officers' liability, protects against claims made after the business has ceased trading that relate to work or decisions made before it closed. The standard minimum run-off period for professional indemnity is six years, aligned with the Limitation Act 1980. Run-off D and O typically runs for three to six years, depending on the complexity of the insolvency. It should be arranged before dissolution, as it becomes significantly harder and more expensive to obtain afterwards.
Yes. Employers' liability insurance is a legal requirement under the Employers' Liability (Compulsory Insurance) Act 1969 for as long as employees are on the payroll. This obligation continues through administration, creditors' voluntary liquidation, and compulsory winding-up, right up until the last employee is formally made redundant. The fine for a gap in cover is up to 2,500 pounds per day and can be applied to the company, the administrator, or in some cases the directors personally.
Yes, typically. Insurers view a director with a previous insolvency as higher risk and will apply a premium loading, particularly in year one. The level of loading depends on the circumstances of the insolvency, in that an externally driven collapse with no misconduct findings will attract lower loadings than a complex insolvency involving creditor disputes or regulatory investigation. The impact generally diminishes after three to five years of clean trading in the new business, and the right broker can help evidence that improved record to insurers at renewal.
Directors' and officers' insurance protects individuals against personal liability for claims alleging mismanagement, breach of duty, wrongful trading, or failure to act in creditors' interests. After insolvency, claims can come from liquidators, creditors, HMRC, the Insolvency Service, and former employees, all potentially targeting directors personally. Run-off cover is strongly advisable for any director of a company that has entered insolvency or liquidation, as claims can be brought for up to six years after the relevant events.
For professional indemnity, the standard minimum is six years, aligned with the Limitation Act 1980 limitation period for contract claims. For run-off directors' and officers' cover, three to six years is typical, though complex insolvencies involving HMRC investigations or Insolvency Service scrutiny may warrant a longer period. Your insolvency practitioner and specialist broker should advise on the appropriate duration based on the specific circumstances of your case.
The core policies for a new business following a previous liquidation are employers' liability if you have staff, which is legally required, public liability, professional indemnity if relevant to your trade, and any sector-specific covers. All proposal forms must be completed honestly, with previous insolvency disclosed wherever asked, along with any director CCJs and any previous insurer declines. A specialist broker can approach insurers who are experienced in these situations and present your case in the most favourable light.
Yes. The Insolvency Service investigates the conduct of directors of insolvent companies and can apply to court for a disqualification order lasting between 2 and 15 years under the Company Directors Disqualification Act 1986. Disqualification is not automatic, as it follows a finding of unfit conduct. Causes include trading whilst knowingly insolvent without reasonable prospect of recovery, failure to keep proper accounting records, failure to pay Crown debts, or fraud. A director who is disqualified cannot act as a director or take part in the management of a company during the disqualification period.
Not usually, but it is assessed separately from the insolvency itself. A county court judgment against the business or against you personally most often affects the payment terms rather than the availability of cover, because the monthly direct debit facility tends to be withdrawn first, leaving annual payment in advance as the route. Disclose CCJs wherever the proposal asks, since an undisclosed judgment discovered later is treated as non-disclosure in exactly the same way an undisclosed insolvency would be.
Yes. A phoenix company, meaning a new business carrying on a similar trade to a failed predecessor and often with the same directors, is lawful provided the rules on reusing a prohibited name under section 216 of the Insolvency Act 1986 are followed. Mainstream insurers frequently decline them automatically because the connection to the failed entity is visible on credit and Companies House records. Specialist insurers will look at the case individually where the directors disclose the connection openly and can show the new entity is properly capitalised and separately run.
For straightforward cases with the documentation ready, terms can often be obtained within a few working days and cover put on risk the same day terms are accepted. Complex cases involving large limits, unusual trades, or an insolvency still under investigation take longer, because each insurer underwrites them manually rather than by system. The delay is almost always waiting for information from you rather than from the market, so having the liquidator's report, the statement of affairs and your new business plan to hand shortens it considerably.
Send us the details and we will tell you what is placeable.
One form, read by a broker rather than scored by an algorithm, and a straight answer either way. If we cannot place it we will say so and point you at who can.
Miller & Partner are commercial insurance specialists in adverse and hard-to-place risks, working with the Lloyd's market and specialist insurers.
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