Do I meet the insurance and turnover requirements?
Enter the contract, the buyer's stated requirements and your own cover and turnover. You get Pass, Short by or Not stated for each line, the size of any gap and plain-English options to close it. It runs in your browser. Nothing is uploaded and there is no signup.
1. The contract
Annual value: £200,000
2. What the buyer asks for
Leave a box empty if the tender does not state it.
3. What you hold today
Cover limits per claim as shown on your schedule. Leave empty if you have none.
Result, line by line
- Pass
Public liability
Required: £5m. You hold: £5m.
- Pass
Employers liability
Required: £5m. You hold: £10m.
- Short by £1m
Professional indemnity
Required: £1m. You hold: none entered.
- Short by £150,000
Annual turnover
Required: £400,000 (2x annual contract value of £200,000). You hold: £250,000.
Your options for each gap
Professional indemnity: short by £1m
- Increase the limit on your policy at renewal, or mid-term for a fee.
- Ask your broker for a contract-specific top-up, often taken out only if you win.
- Rely on a parent company or consortium partner whose cover meets the level, if the tender allows it.
- Ask the buyer a clarification question if the level looks disproportionate.
Annual turnover: short by £150,000
- Rely on a parent company or consortium partner whose turnover meets the level, if the tender allows it.
- Offer other evidence of financial standing, such as forecasts, contracted work or a guarantee.
- Ask the buyer whether the level is proportionate (see below).
Rules of thumb only
- Employers liability: the legal minimum is £5m under the Employers' Liability (Compulsory Insurance) Regulations 1998, made under the 1969 Act. Many buyers ask for exactly £5m or £10m.
- Turnover: multiples of 1x to 2x annual contract value are common.
- Buyers set their own requirements. Under the Procurement Act 2023 they are expected to keep conditions proportionate to the contract.
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How buyers set these requirements.
Insurance and turnover are usually pass or fail. Miss one and your quality answers may never be read. The figures are chosen by each buyer, so the tender document always beats any benchmark. The rules of thumb in the tool are there to help you spot a figure that looks out of line, not to tell you what a buyer must ask for.
Buyers are expected to keep conditions proportionate to the contract under the Procurement Act 2023, and Cabinet Office guidance covers this. If a requirement looks heavy for the value, the tool drafts a clarification question you can adapt. Check your answer against the rest of the pack with the tender pack shredder, and see the SQ readiness checker for the wider selection stage. For small firms, our guide to government tenders for small business is a good next read.
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Insurance and turnover questions, answered.
How much insurance do I need to bid for a public sector contract?
There is no single figure. Each buyer sets its own minimum levels for public liability, employers liability and, where relevant, professional indemnity, and states them in the tender documents. Common figures are £5m or £10m for employers liability and public liability, and £1m to £5m for professional indemnity, but treat these as rules of thumb only. Always work from the wording in your tender.
Is employers liability insurance a legal requirement?
Generally yes, if you employ people. The Employers' Liability (Compulsory Insurance) Act 1969 and its regulations require most employers to hold cover of at least £5m. There are exceptions, for example some sole traders with no employees, so check the official guidance on GOV.UK or ask your broker. Buyers may ask for more than the legal minimum.
What turnover do I need to win a tender?
Buyers set their own test. A minimum annual turnover expressed as a multiple of the annual contract value is common, often between 1x and 2x, but some ask for a fixed figure and some ask for nothing. Higher multiples exist. If yours looks high compared with the contract, it is reasonable to ask the buyer to explain it.
Can I bid if my insurance is below the required level?
Often, yes. Many tenders accept a commitment to increase cover if you are awarded the contract, but read the wording carefully because some require the cover to be in place at submission. Your broker can advise on a contract-specific top-up or a higher limit at renewal. Do not state that you hold cover you do not have.
Can a parent company or consortium partner meet the requirement for me?
Sometimes. Buyers can allow you to rely on the financial standing of another organisation, such as a parent company, a consortium member or a guarantor, and may ask for a guarantee or a signed commitment. Whether this is accepted depends on the tender, so confirm it in writing with the buyer before you rely on it.
What if the requirement looks disproportionate?
Under the Procurement Act 2023 and related Cabinet Office guidance, buyers are expected to keep conditions of participation proportionate to the contract. If a turnover level or insurance limit seems out of line with the contract value and risk, submit a polite clarification question before the deadline asking how it was set and whether alternative evidence would be accepted. There is no guarantee the buyer will change it. This tool is for guidance only and is not legal or insurance advice.
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