Benjamin Franklin’s most famous quote is that “in this world nothing is certain but death and taxes”.
Insurance is the same as everything else and yes, you do pay tax on it in the UK. The tax is known as insurance premium tax. There is a double whammy of bad news about IPT.
Firstly, that you have to actually the tax and secondly that unlike VAT you cannot claim it back. You do not apply IPT to the products you sell (like VAT) so this is a no go. Insurance brokers have to apply the tax and collect it. This then goes to the insurers who pay this money to Mr A Darling to do with it what he wants.
Whenever you get a business insurance quote or renewal confirmed, the IPT amount should be clearly stated. You will pay 0% ipt on, for example, marine cargo insurance outside of the UK and on engineering inspection cover (because this is subject to VAT).
It is just a cost we have to live with and pay.