Small businesses, ltd companies & charities
It’s not possible to give a definitive answer for the protection FSCS can provide for small businesses, limited companies and charities, but if you’re a small business owner or director of a charity, check if you can claim or contact us if you’d prefer. It’s completely free to claim with us.
We can only get involved if the firm your company/charity did business with has failed and can’t pay back your money itself. It must also have been authorised by the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA) at the time the business was carried out.
If you want to find out if you’d be eligible for FSCS protection while the firm you’re doing business with is still trading (and hasn’t failed), the firm itself should be able to help. If it can’t, you could seek independent legal or financial advice.
Your small business, limited company or charity will need to meet certain eligibility criteria to claim compensation with FSCS. We assess eligibility on a case-by-case basis and it varies for different types of claim. Legal status will affect eligibility, e.g., if you’re an individual or incorporated entity (such as a corporation or limited partnership). Charitable status is never relevant to eligibility.
A small business, limited company or charity may be the direct client of a failed firm but in some cases, e.g., if the company was acting as a bare trustee or agent/nominee company, we may be able to ‘look through’ the company to treat someone else as the claimant. We would then assess them, rather than the company, for eligibility.
For investment claims, we use the FCA’s Compensation Sourcebook, in particular COMP 4, to assess if your firm is eligible to claim compensation with us.
Your firm must qualify as a ‘small company’ under section 382 of the Companies Act 2006 to be eligible. There are three criteria in the test - annual turnover, balance sheet and number of employees - and your firm must meet two of the three criteria to qualify as ‘small’.
We generally protect firms’ deposits and we don’t carry out a size test. We assess eligibility under the PRA’s Depositor Protection Rules, in particular rule 2.2.
We assess eligibility for insurance claims under the PRA’s Policyholder Protection Rules, in particular rules 7 and 8.
Generally, firms with an annual turnover of more than £1m aren’t eligible for general insurance claims. The same goes for most types of authorised financial services firms.
For general contracts of insurance that are compulsory, usually all firms are eligible, regardless of size or authorisation status.
All firms are generally eligible for long-term insurance contract claims, regardless of size or authorisation status. Realistically, this may not occur very often in practice, as companies don’t have pensions or annuities.