Phoenix Company Insurance UK | Newco & Director History Cover
Why does a phoenix company need specialist insurance treatment?
When a business fails and its viable parts are rebuilt into a new company, the directors usually feel they have a fresh start: new company number, clean balance sheet, no claims history, a line drawn under the past. On paper that is true. In an underwriter's eyes it is not. Insurers do not just look at the shiny new company — they look at the people running it and the history behind it, and a "newco" born from an insolvent predecessor carries that history whether the company number shows it or not.
That mismatch between perception and reality is where phoenix companies get caught. A newco has no trading record to price, so insurers lean on the directors' history — including any connected insolvencies. The predecessor's failure is a material fact that must be disclosed. Re-using the old company's name without following strict rules can make a director personally liable for the newco's debts under the Insolvency Act 1986. And a fresh professional indemnity policy won't reach back to cover the predecessor's past work, leaving a gap most directors never spot until a claim lands.
This is exactly the adverse-risk work we specialise in. At Miller & Partner we place cover for phoenix companies and newcos that standard markets decline on sight, present the directors and the rescued business honestly to underwriters, and flag the legal and cover traps before they bite. It sits alongside our guidance on insurance after insolvency or liquidation, cover for a business in a CVA and business insurance after a CVL — related, but distinct situations with their own traps.
A phoenix company is precisely the kind of risk a generalist rejects on sight and a specialist can place with the right story. Here is how each pillar applies.
Key facts about insuring a newco, at a glance
- A phoenix company (newco) is a new company that acquires the business or assets of an insolvent predecessor — legal when done properly, often via a pre-pack.
- A newco has no trading or claims history of its own, so insurers underwrite the directors and the connected company history behind it.
- The predecessor's insolvency and any director's prior failures are material facts you must disclose under the Insurance Act 2015.
- Under Insolvency Act 1986 section 216, a director of an insolvently-liquidated company is banned for 5 years from running a business with the same or similar ("prohibited") name.
- Breach of section 216 is a criminal offence and makes the director personally liable for the newco's debts — limited liability is lost.
- A new professional indemnity policy carries a fresh retroactive date, so claims from the predecessor's past work are typically uninsured.
- With a thin credit file, a newco often faces premium loadings and withdrawn monthly terms.
What is a phoenix company, and is it legal?
A phoenix company is a new company — a "newco" — that acquires the business or assets of an insolvent company (the "oldco"), often through a pre-pack administration, and continues trading. The term comes from the idea of a business rising from the ashes of its predecessor. It is frequently run by the same directors, who buy the viable parts from the insolvency practitioner and leave the unpayable debts behind in the old company.
Done properly, phoenixing is entirely legal and can be positive — it saves jobs, preserves customer relationships and keeps a fundamentally sound business alive. Done improperly, it is the "phoenixism" that the law was written to curb: shedding liabilities while keeping the assets and goodwill, to the disadvantage of creditors. The line between the two runs through a set of strict rules — chiefly around re-using the old company's name — and through how honestly the new company is presented to the people it deals with, including its insurers. Getting that right is what separates a legitimate fresh start from a trap.
Clean slate or not? Perception vs underwriting reality
The single most expensive misunderstanding about a newco is the "clean slate" assumption. Here is how the perception lines up against what an underwriter actually sees.
| Dimension | The perception | The underwriting reality |
|---|---|---|
| Trading history | Fresh start, day one | No record to price — treated as higher risk |
| Claims history | Clean, no claims | Directors' connected history is reviewed |
| Credit file | New, neutral | Thin file → loadings, terms restricted |
| Director history | Doesn't follow the company | It does — insurers credit-check the people |
| Past-work liabilities | Left behind in oldco | True — but a claim then has no live insurer |
| Disclosure | Nothing to declare | Predecessor failure is a material fact |
None of this makes a newco uninsurable — far from it. It simply means the placement has to be built around the directors and the honest story of the predecessor, not the fiction of a blank page. That is the difference between a decline and a quote, and it is why a newco so often ends up refused cover by markets that would happily insure the same operation under a different history.
Why do insurers look at the directors, not the company?
Underwriting is, at heart, an assessment of risk over time — and a brand-new company offers nothing to assess. There is no loss record, no trading pattern, no renewal history. So insurers do the only sensible thing: they assess the people who will run it. They credit-check the directors, look at their track record, and ask whether any have been involved in companies that have failed. A director with one connected insolvency is a manageable story; a director with a pattern of them is a different conversation.
This is why honesty and presentation matter so much. The directors are the risk in a newco's first year or two, and an underwriter who is given the full, candid picture — what went wrong, what has changed, why this time is different — can get comfortable in a way they never will with a company trying to look like it appeared from nowhere. Where directors gave personal guarantees or face other exposures, directors' and officers' cover often belongs in the conversation too.
Do you have to disclose the failed company?
Yes. Under the Insurance Act 2015 duty of fair presentation, the predecessor's insolvency and the directors' involvement in it are material circumstances that would plainly influence a prudent insurer — so they must be disclosed at the newco's first placement and every renewal. Most commercial proposal forms ask directly whether any director has been involved in an insolvent business; answering anything but the truth is a non-disclosure waiting to void the policy.
Cover checker: what's your situation?
Select the situation that fits. Each gives the immediate priorities — and where you see "specialist placement needed," that is exactly the work a specialist broker does for you.
- LEGAL Disclose the pre-pack and the predecessor's insolvency at placement — it's a material fact.
- ESSENTIAL Gather the sale documents, the reason for failure, and what has changed for the submission.
- RECOMMENDED Use a specialist broker to present the rescued business properly. Specialist placement needed.
- CRITICAL Check whether any predecessor work needs run-off cover (see professional indemnity below).
- CONSIDER Confirm the name re-use complies with section 216.
- LEGAL Declare the directors' connected insolvency — insurers credit-check the people.
- ESSENTIAL Prepare the directors' candid account of what went wrong and what's different now.
- RECOMMENDED Present the directors as the strength they are — experience that saved the business. Specialist placement needed.
- CONSIDER Review personal guarantees and D&O cover.
- CRITICAL A pattern of failures needs careful, honest handling — never concealment.
- CRITICAL Re-using a same/similar name can trigger section 216 — personal liability and a criminal offence if no exception applies.
- LEGAL Take insolvency advice on the notice procedure, court permission, or existing-use exception.
- ESSENTIAL Meet the 28-day creditor/Gazette notice deadline if relying on that exception.
- RECOMMENDED Confirm compliance before binding insurance — a breach is a governance red flag.
- CONSIDER A different name avoids the whole issue.
- CRITICAL A new PI policy has a fresh retroactive date — the predecessor's past work is usually NOT covered. Specialist placement needed.
- ESSENTIAL Consider run-off cover for the oldco's prior advice/work.
- RECOMMENDED Map which past projects could still generate claims.
- LEGAL Disclose the predecessor when arranging the newco's PI.
- CONSIDER Negotiate the earliest defensible retroactive date possible.
- CRITICAL A standard decline is normal for a newco — it doesn't mean uninsurable. Specialist placement needed.
- ESSENTIAL Have a broker rebuild the submission for the specialist/adverse market.
- RECOMMENDED Lead with the directors' record and the viable business acquired.
- LEGAL Ensure full disclosure carries into the new submission.
- CONSIDER Note the decline reason so it can be addressed directly.
- ESSENTIAL Expect a credit-driven loading and possible loss of monthly terms early on.
- RECOMMENDED Ask a broker about insurers who still offer instalments to newcos, or a finance bridge.
- CRITICAL Don't let cover lapse over a payment-structure problem.
- CONSIDER Terms usually improve as the newco builds its own record.
- LEGAL Keep compulsory cover (employers' liability) in force from day one.
What is the section 216 prohibited-name trap?
This is the legal trap that turns a fresh start into personal liability. Under section 216 of the Insolvency Act 1986, anyone who was a director — or shadow director — of a company in the 12 months before it went into insolvent liquidation is banned, for five years, from being involved in any company or business using the same or a similar name (a "prohibited name"). The rule exists to stop creditors being deceived into thinking they are dealing with the same company.
The consequences of breaching it are severe. Under section 217, a director who runs a newco using a prohibited name without permission becomes personally liable for the newco's debts — the limited-liability shield is gone — and commits a criminal offence punishable by a fine or imprisonment. There are three narrow exceptions, all strict and time-sensitive: a notice procedure (where the newco buys substantially the whole business via the insolvency practitioner and notifies all creditors plus the London Gazette within 28 days); court permission (applied for within 7 days of liquidation, giving a 6-week grace period); and existing use (where another company has used the name for the 12 months before liquidation without being dormant). Take insolvency advice before re-using any name — and never bind insurance on a newco whose name compliance is uncertain.
I've sat across from directors who were proud of keeping the old, well-known trading name alive on the newco — and had no idea they'd walked into section 216. They saw goodwill; the law saw a prohibited name and personal liability for every debt the new company ran up. The thing meant to protect the business had quietly removed its limited-liability protection. We don't give legal advice on the insolvency itself, but when we take on a newco placement and spot a name that looks like the old one, the first thing we ask is whether an exception was followed — because that answer changes everything about the risk.
Red-flag check: is your newco exposed?
Tick each item that is true. Each is a sign your newco's cover — or your personal position — may be more fragile than it looks.
Insurability assessor: how placeable is your newco?
Choose two factors for an indicative read on how straightforward your placement is likely to be. Guidance, not advice.
Why might your past work be uninsured?
This is the gap that catches professional and contractor newcos hardest, and it follows directly from how claims-made insurance works. Professional indemnity — and several other liability covers — respond to claims made during the policy period, but only for work done after a fixed retroactive date. When you start a brand-new company and take out a brand-new policy, that retroactive date usually resets to the newco's inception. Anything the predecessor did before then falls outside it.
The consequence is stark. A claim arising from the oldco's past advice, design or work lands against a company that no longer exists and whose insurance has lapsed — so there is no live policy to respond, and the newco's fresh PI won't reach back to cover it. The claimant is left chasing a dissolved company, and the directors can find themselves personally in the firing line. The fix is to think about run-off cover for the predecessor's liabilities and to negotiate the earliest defensible retroactive date on the newco's policy. It is exactly the kind of exposure a specialist broker maps at the outset — and a generalist quoting a standard newco policy never mentions.
How do you present a newco to underwriters?
With a newco, presentation is almost everything, because there is no trading record to speak for the business. The job is to replace the missing history with a credible, honest narrative — and that narrative lives or dies on candour. An underwriter who is shown a viable business, capable directors, and a clear account of what went wrong and what has changed can price the risk. One who senses concealment reaches for the decline stamp, or worse, prices in the worst-case assumption.
A strong newco submission includes the directors' track record and their honest account of the predecessor's failure, the pre-pack or acquisition documents showing what was bought, evidence of the business's viability — orders, contracts, forecasts — confirmation that any name re-use complies with section 216, and the risk-management and compliance measures now in place. The aim is to move the underwriter from "company that came from an insolvency" to "experienced operators who rescued a sound business and are doing it properly." That reframing is the core of specialist adverse-risk broking.
What determines whether a newco can get cover?
Whether a newco secures good terms comes down to the directors, the disclosure and the presentation far more than the company's age. Almost every factor is improvable — which is why a specialist placement so often succeeds where a direct application was declined.
| Factor | Why it matters | How to strengthen it |
|---|---|---|
| Director track record | The directors are the risk in year one | Present experience and what's changed |
| Number of connected failures | A pattern raises underwriting concern | Explain honestly; evidence lessons learned |
| Full disclosure | Non-disclosure voids cover | Declare the predecessor and history up front |
| Name compliance | A section 216 breach is a red flag | Follow an exception; take insolvency advice |
| Business viability | Orders and forecasts reassure insurers | Provide contracts, pipeline and projections |
| Acquisition evidence | Shows what was actually bought | Supply pre-pack / sale documents |
| Past-work exposure | Claims from oldco can surface uninsured | Arrange run-off; manage retroactive date |
| Sector | Some trades are harder regardless | Match to insurers with appetite |
| Risk management | Good controls lower the risk view | Document procedures and compliance |
| Credit / payment | Thin file restricts terms | Seek instalments or a finance bridge |
| Broker market access | Newcos need specialist markets | Use a broker with Lloyd's access |
| Time trading | A record builds confidence | Terms improve as the newco proves itself |
Three real-world phoenix-company case studies
These composites reflect the situations we see most often. Figures are illustrative, but the dynamics — and the difference the right placement makes — are real.
Ashworth Joinery (Newco) Ltd — full disclosure won the day
A joinery business was rebuilt as a newco through a pre-pack, run by the same director who had lost the predecessor to a single large bad debt. The first standard insurer declined on sight of the connected insolvency. We rebuilt the submission around the director's twenty-year record, the bad-debt cause of failure, and a healthy forward order book, and placed property, public and employers' liability with a specialist insurer at a modest loading. The lesson: a newco is insurable when the directors and the honest story are presented properly. Premium settled around 20% above a comparable clean risk, with terms improving at the first renewal once the newco had a trading record.
Verity Design Studio — the retroactive-date gap that bit
A design consultancy continued as a newco after the original company was wound up, taking out a fresh professional indemnity policy with a retroactive date set at the newco's inception. Eighteen months later a client brought a £140,000 claim over a design defect — in work carried out by the predecessor, before the new policy's retroactive date. The newco's PI did not respond, the dissolved oldco had no live cover, and the director was pursued personally. The lesson: a new PI policy does not cover the predecessor's past work; run-off for the oldco and a carefully negotiated retroactive date are essential for any professional newco.
Marsden Plant Hire (Newco) — the prohibited-name trap
A plant-hire business launched a newco under a name almost identical to the liquidated predecessor, to keep the goodwill, without following any section 216 exception. When a creditor complained, the director found he was personally liable for the newco's debts — which had grown to around £160,000 — and faced enforcement, the limited-liability protection gone. The name issue also surfaced at insurance renewal as a serious governance concern. The lesson: the name rules are not optional paperwork; breaching them removes the very protection the company structure was meant to provide. The business re-registered under a clean name and re-placed cover on a sound footing.
How to insure a phoenix company properly
If you are forming or running a newco from a failed predecessor, work through these eight steps to get cover that holds and to avoid the personal-liability traps.
- Confirm the name complies with section 216. Take insolvency advice and follow an exception — notice procedure, court permission or existing use — before trading or insuring under any same-or-similar name.
- Disclose the predecessor in full. Treat the connected insolvency and directors' history as material facts under the Insurance Act 2015 at every placement and renewal.
- Engage a specialist broker. Use a broker with adverse-risk and Lloyd's market access who can place a newco standard insurers decline.
- Build the directors' story. Provide the track record, the candid reason the predecessor failed, and what has changed.
- Evidence the viable business. Supply the pre-pack/sale documents, orders, contracts and forecasts that show the newco is sound.
- Mind the retroactive date. For professional or claims-made covers, arrange run-off for the predecessor and negotiate the earliest defensible retroactive date.
- Plan the premium structure. Expect a credit-driven loading and possible loss of monthly terms; line up instalments or a finance bridge.
- Review as you build a record. Terms improve as the newco trades cleanly — revisit cover and pricing at each renewal.
Phoenix-company insurance glossary
- Phoenix company
- A new company that acquires the business or assets of an insolvent predecessor and continues trading — legal when the rules are followed.
- Newco / Oldco
- Common shorthand for the new (successor) company and the old (insolvent predecessor) company.
- Pre-pack administration
- An arrangement where a company's business and assets are sold immediately on entering administration, often to a connected newco.
- Insolvent liquidation
- The winding up of a company that cannot pay its debts — the trigger for the section 216 name restriction.
- Section 216 (Insolvency Act 1986)
- The provision banning directors of an insolvently-liquidated company from re-using its name (a prohibited name) for five years.
- Section 217
- Makes a director who breaches section 216 personally liable for the relevant debts of the newco.
- Prohibited name
- A name by which the liquidated company was known in the 12 months before liquidation — or one so similar as to suggest association.
- Shadow director
- A person in accordance with whose instructions the directors act — caught by section 216 as if a formal director.
- Connected company
- A company linked to a director or to the newco — its history is relevant to underwriting and disclosure.
- Material fact
- Information that would influence a prudent insurer's decision — a connected insolvency is one, and must be disclosed.
- Duty of fair presentation
- The Insurance Act 2015 obligation to disclose every material circumstance when buying or renewing cover.
- Retroactive date
- The date from which a claims-made policy covers work — a newco's resets to inception, leaving earlier work uncovered.
- Run-off cover
- Insurance that responds to claims from a business's past work after it has ceased — relevant to the predecessor's liabilities.
- Director disqualification
- A ban on acting as a director under the Company Directors Disqualification Act 1986, separate from but relevant to phoenix conduct.
- Premium loading
- An increase to the base premium reflecting elevated risk — common for a newco with no record and a connected insolvency.
- Specialist market
- Insurers and Lloyd's syndicates with appetite for adverse and hard-to-place risks, including phoenix companies.
Frequently asked questions
Can a phoenix company get business insurance?
Does a newco really start with a clean insurance slate?
Do I have to tell insurers my previous company failed?
What is the section 216 prohibited-name rule?
Why isn't my predecessor's past work covered by my new PI policy?
Will my newco's premium be higher because of the predecessor?
Is a phoenix company legal?
Does the previous company's claims history transfer to the newco?
How is this different from insurance for a business in a CVA?
Can the directors be held personally liable?
How do I get the best insurance terms for my newco?
Do you place cover for phoenix companies and newcos?
Related specialist guides
- Insurance After Insolvency or Liquidation
- CVA Insurance
- Business Insurance After a CVL
- Business Insurance During & After Administration
- Insurer in Liquidation
- Insurance for Businesses Refused Cover
- Business Insurance Refused Elsewhere
- Business Insurance With a Claims History
- Business Insurance With CCJs or Poor Credit
- Specialist Broker for Adverse-Risk Insurance
- High-Risk Public Liability Insurance
- Directors & Officers Insurance
- Professional Indemnity Run-Off Cover
- Business Insurance After a Fire Claim
- Business Insurance After a Flood Claim
- Professional Indemnity Insurance
- Commercial Insurance
- Adverse-Risk Insights Hub
This guide is general information, not advice for your specific circumstances, and does not constitute legal, insolvency or financial advice. Section 216 and the re-use of company names are technical and time-sensitive — always take qualified insolvency and legal advice before acting. Insurance availability and terms for a newco vary by insurer and circumstances. Miller & Partner Limited is an Appointed Representative of Gauntlet Risk Management Ltd, which is authorised and regulated by the Financial Conduct Authority.
Instagram
LinkedIn