How Insurance Affects Your Ability to Win High-Value Contracts

Introduction

If you’ve ever gone after a “big” contract—public sector work, a blue-chip supplier agreement, a major construction package, or a multi-site service deal—you’ll know the paperwork can feel as demanding as the job itself. One of the fastest ways to get knocked out early is failing the insurance requirements.

Insurance isn’t just a box-ticking exercise. For high-value contracts, it’s often a deciding factor in whether you’re allowed to bid, how credible you look during evaluation, and how comfortable the buyer feels awarding you the work.

In this guide, we’ll break down exactly how insurance affects your ability to win high-value contracts, what buyers typically ask for, and how to position your cover so it supports growth rather than slowing it down.

Why insurance matters to buyers (and why it’s in the contract)

High-value contracts bring higher stakes:

• Bigger budgets and tighter delivery timelines

• Greater exposure to third-party injury or property damage

• Higher likelihood of professional errors being costly

• More complex supply chains and subcontractor risk

• Increased regulatory scrutiny

• Reputational risk for the buyer if something goes wrong

From the buyer’s perspective, insurance is a risk-transfer tool. They want confidence that:

• A claim won’t derail delivery

• Compensation is available if loss occurs

• Legal defence costs are covered

• The supplier is financially resilient

• The buyer won’t end up paying for the supplier’s mistake

That’s why insurance requirements are often written directly into tender documents, supplier onboarding packs, and contract schedules.

The 3 ways insurance influences contract outcomes

Insurance impacts high-value contract wins in three main ways:

1. Eligibility: Can you bid at all? Many tenders have minimum insurance limits.

2. Evaluation: Do you look like a low-risk, well-managed supplier?

3. Negotiation: Can you agree to the contract terms without taking on uninsurable liabilities?

If you’re weak in any of these areas, you may lose to a competitor with similar pricing and capability—but stronger risk controls.

Common insurance requirements in high-value contracts

Every sector varies, but these are the covers and clauses most commonly requested.

Public liability insurance

Public liability covers injury to third parties and damage to third-party property arising from your business activities.

Typical contract requirements:

• Minimum indemnity limits (often £2m, £5m, or £10m)

• Evidence via a certificate of insurance

• Confirmation of territorial limits (UK, EU, worldwide)

• Sometimes an “each and every claim” basis rather than “aggregate”

Why it matters: buyers want reassurance that if your work causes damage on-site or to a customer, funds are available to resolve it.

Employers’ liability insurance (UK legal requirement)

If you employ staff, employers’ liability is usually mandatory in the UK (with limited exceptions).

Typical contract requirements:

• Minimum £10m cover (often standard)

• Certificate displayed and provided

Why it matters: high-value buyers won’t accept suppliers who are non-compliant with basic legal obligations.

Professional indemnity insurance

Professional indemnity (PI) covers claims arising from professional negligence, errors, omissions, or breach of professional duty.

Common in:

• Consultants, engineers, designers, IT providers

• Marketing agencies, accountants, solicitors

• Medical technology and regulated manufacturing services

Typical contract requirements:

• Limits such as £1m, £2m, £5m, or higher

• “Any one claim” wording

• Retroactive date requirements (cover for past work)

• Run-off cover requirements (often 6–12 years for construction/design)

Why it matters: for high-value projects, a small design error can become a huge loss.

Product liability and product recall

If you manufacture, supply, or distribute products, buyers may require product liability. In certain industries (food, medical devices, automotive components), recall cover may be requested.

Typical contract requirements:

• Product liability included within public liability or separate

• Limits aligned with contract value and risk profile

• Evidence of quality control and traceability

Why it matters: buyers want protection if a product causes injury, damage, or needs to be withdrawn.

Contract works / CAR / EAR (construction and engineering)

Construction All Risks (CAR) or Erection All Risks (EAR) can be required where you’re responsible for works in progress.

Typical contract requirements:

• Cover for contract works value

• Plant and tools cover

• Hired-in plant cover

• Off-site storage and transit extensions

Why it matters: if the works are damaged mid-project, the buyer wants the project to continue without disputes about who pays.

Cyber insurance

Cyber insurance is increasingly required, especially where you:

• Handle personal data (GDPR)

• Access client systems

• Process payments

• Rely on cloud platforms for delivery

Typical contract requirements:

• Minimum cyber limits (e.g., £250k to £5m)

• Incident response services

• Business interruption cover

• Ransomware and social engineering extensions (where available)

Why it matters: buyers don’t want your breach to become their breach.

Directors’ and officers’ (D&O) liability

Less common for smaller suppliers, but it can appear in investor-backed or regulated environments.

Why it matters: it signals governance maturity and protects leadership decisions.

Motor/fleet insurance (where vehicles are part of delivery)

If your contract involves deliveries, site visits, or transport services, buyers may request evidence of appropriate motor cover.

Why it matters: vehicle incidents can create major third-party claims and operational delays.

Insurance limits: why “contract value” isn’t the only factor

A common mistake is assuming insurance limits should match the contract value. In reality, buyers consider:

• Worst-case loss scenarios (injury, fire, contamination, data breach)

• Number of sites and footfall

• Whether you’re working in high-risk environments

• Whether you’re designing/specifying (PI exposure)

• Whether you’re handling regulated products

A £200k contract can still create a multi-million-pound liability if something goes wrong.

That said, over-insuring can also be inefficient. The goal is to align cover with realistic exposures and contract expectations.

The tender stage: how insurance can knock you out early

Many tender processes include pass/fail checks. If you can’t provide the minimum insurance evidence, you may be excluded before your technical submission is even read.

Common tender pitfalls:

• Your public liability limit is below the minimum

• Your PI is “aggregate” but the buyer requires “any one claim”

• Your policy excludes the exact activity you’re tendering for

• Your retroactive date is too recent

• Your cyber policy doesn’t include the required extensions

• Your insurer won’t provide the requested endorsements

Practical tip: treat insurance review as part of bid planning, not an afterthought.

Contract clauses that can create uninsurable risk

Some contract terms look normal but can create liabilities that standard insurance won’t cover, or will only cover in limited circumstances.

Indemnities that go beyond negligence

Many policies respond to negligence-based claims. If a contract asks you to indemnify the buyer for losses “howsoever arising” (including their own negligence), that can be problematic.

Unlimited liability

Unlimited liability may be uninsurable and commercially dangerous. Buyers may accept caps aligned to insurance limits, especially for smaller suppliers.

Fitness for purpose

“Fitness for purpose” obligations can be broader than “reasonable skill and care.” PI insurance often aligns better with reasonable skill and care.

Liquidated damages and penalties

Insurance generally doesn’t cover contractual penalties. If liquidated damages are set too high, you could be exposed.

Waiver of subrogation and primary/non-contributory wording

Some buyers ask for waivers or for your policy to respond first. These may be possible, but not always—and can affect pricing.

Joint names and additional insured requirements

Construction and facilities contracts often request joint names or additional insured status.

Practical tip: if you’re asked to sign terms you don’t understand, get the contract reviewed. It’s often cheaper to negotiate wording than to “hope insurance covers it.”

How insurance improves your credibility (even when it’s not mandatory)

In competitive bids, buyers don’t just want the cheapest supplier—they want the safest option that will deliver.

Strong insurance can support your credibility by showing:

• You’ve assessed risks properly

• You meet industry norms

• You’ve invested in resilience

• You can handle claims without collapsing cashflow

This matters particularly when you’re a smaller company bidding against larger firms. Insurance becomes part of your “trust stack.”

What buyers look for in your insurance documentation

Buyers typically want clear, current evidence. Expect requests for:

• Certificates of insurance (dated, with correct legal entity name)

• Schedule wording showing limits and key extensions

• Policy period dates

• Insurer name and sometimes financial rating

• Confirmation of activities covered

• Endorsements (e.g., additional insured, waiver of subrogation)

Common admin mistakes that cost contracts:

• Wrong company name (trading name vs legal entity)

• Expired certificate

• Limits shown but not the required basis (aggregate vs any one claim)

• Missing endorsements

• Documents that don’t match the contract scope

The “right cover” is also about the right wording

Two policies can have the same headline limit but behave very differently.

Key wording points to check:

• Indemnity limit basis: any one claim vs aggregate

• Territorial limits: UK only vs worldwide

• Jurisdiction: UK courts only vs worldwide

• Contractual liability: does it extend to liabilities assumed under contract?

• Subcontractor cover: are you responsible for their actions?

• Bona fide subcontractor clause: does it require them to carry their own insurance?

• Exclusions: heat work, asbestos, pollution, design, cyber, work at height, offshore, etc.

If you’re bidding for high-value work, it’s worth aligning your insurance wording with your actual delivery model.

Subcontractors: the hidden insurance risk in big contracts

High-value contracts often involve subcontractors. Buyers will expect you to manage their risk.

What can go wrong:

• Subcontractor has inadequate insurance

• Their policy excludes the work type

• Their cover lapses mid-project

• The contract makes you fully responsible for their actions

Best practice:

• Collect subcontractor certificates before work starts

• Set minimum limits aligned to your contract

• Include insurance obligations in subcontractor terms

• Review high-risk activities (hot works, lifting, confined spaces)

Insurance and cashflow: the “small print” that affects delivery

Even if you win the contract, insurance can still affect your ability to deliver.

Excesses and deductibles

High excesses can create cashflow strain when incidents occur. Buyers don’t want project delays while you scramble for funds.

Claims handling and legal support

High-value disputes can become complex. Strong policies often include access to specialist claims handlers and legal defence support.

Business interruption and continuity

For contracts with strict service levels, business interruption cover (including cyber BI) can be the difference between surviving an incident and losing the client.

How to use insurance as a competitive advantage in your bid

Most suppliers treat insurance as a compliance task. You can use it as a credibility lever.

Here are practical ways to do that.

1) Reference your insurance readiness in your method statements

Without overloading the bid, include a short section that confirms:

• Your key covers and limits

• Your approach to subcontractor insurance management

• Your incident reporting and claims process

2) Align your risk management narrative with your cover

Insurance looks stronger when it matches a clear risk approach:

• Health & safety procedures

• Quality control and traceability

• Cyber security controls (MFA, backups, training)

• Documented processes and audits

3) Offer realistic liability caps

If you can’t accept unlimited liability, propose caps aligned to your insurance limits. Buyers often accept this when presented professionally.

4) Provide documentation fast

Speed matters. If you can supply certificates and endorsements quickly, you reduce friction and look operationally mature.

When to review or upgrade your insurance (before you bid)

If you’re planning to go after larger contracts, don’t wait until you’ve already found the tender.

Review your insurance when:

• You’re moving into a new sector (e.g., regulated manufacturing)

• You’re adding design/specification responsibilities

• You’re taking on offshore/marine work

• You’re handling more personal data or system access

• You’re hiring staff or expanding subcontractor use

• You’re bidding for public sector frameworks

Upgrading cover can take time—especially if endorsements or specialist underwriting is needed.

A simple checklist: are you “contract ready” from an insurance perspective?

Use this quick checklist before you pursue high-value opportunities.

• Public liability meets typical buyer minimums

• Employers’ liability is in place and compliant

• PI matches your scope (including retroactive date and run-off needs)

• Product liability/recall considered if you supply goods

• Cyber cover aligns with your data and system access

• Contract works/plant/tools cover in place if you’re in construction/engineering

• Territorial limits and jurisdiction match where you operate

• Policy wording doesn’t exclude your key activities

• Subcontractor insurance process is documented

• Certificates and schedules are current and correctly named

FAQs

What insurance do I need to bid for high-value contracts?

It depends on your industry and contract scope, but the most common requirements are public liability, employers’ liability (if you employ staff), and professional indemnity for advice/design/services. Many buyers also ask for cyber insurance, especially where data or system access is involved.

How much public liability insurance do high-value contracts require?

Common minimums are £2m, £5m, or £10m. Some sectors and sites may require higher limits. The key is to match the buyer’s tender requirements and the realistic worst-case risk.

What’s the difference between “any one claim” and “aggregate” limits?

“Any one claim” means the full limit is available for each separate claim. “Aggregate” means the limit is shared across all claims during the policy period. Buyers often prefer “any one claim,” especially for PI.

Can I win contracts without professional indemnity insurance?

If your work involves advice, design, specification, or professional services, many buyers will require PI. Without it, you may be excluded at pre-qualification stage.

Does cyber insurance really matter for non-IT businesses?

Yes. Many non-IT businesses still process personal data, take payments, use cloud systems, and rely on email. Cyber incidents can disrupt delivery and trigger contractual obligations.

Will insurance cover anything I agree to in a contract?

Not always. Insurance typically covers negligence-based liabilities and certain legal costs. It often won’t cover contractual penalties, unlimited liabilities, or obligations that go beyond standard legal duties.

What if the buyer asks for insurance limits I can’t afford?

Sometimes you can negotiate. Options include proposing a liability cap aligned to your current limits, adjusting scope, or discussing staged increases. The best approach is to address it early rather than submitting a bid that fails compliance.

Do I need to name the client as an “additional insured”?

Some contracts request this, especially in construction and facilities work. It may be possible via endorsement, but it depends on the insurer and policy wording.

How quickly can I get proof of insurance for a tender?

If your policies are already in place and correctly structured, certificates can often be provided quickly. Endorsements or changes may take longer, particularly for specialist risks.

Conclusion: insurance isn’t a cost—it's a growth enabler

High-value contracts are won on trust as much as price and capability. Insurance is one of the clearest, simplest signals that you’re a safe pair of hands.

If your cover is aligned to your activities, your documentation is ready, and your contract terms are insurable, you’ll remove one of the biggest barriers to winning larger work—and you’ll look more credible doing it.

If you’re planning to bid for bigger contracts this year, it’s worth reviewing your insurance now, so you can go into tenders confident you’ll pass compliance checks and negotiate from a position of strength.