I can't give you specific, exact advice, only some thoughts to go from.
First off, "software company" -- what are you exactly? If you're consultants, then a "Professional Indemnity Insurance" sounds advisable. If you're a product company (shrink-wrapped software, or Software as a Service), then I don't think it will be of much use, you would need a product-oriented insurance? But read the terms of the Policy carefully. That Wikipedia link is an advert, but it does highlight how Policy coverage can vary between insurers.
Second, a great deal will depend on which jurisdiction you're operating in, and its traditions/culture for liability lawsuits. I don't know about the UK in this regard. In Denmark these lawsuits are rare -- and if I have a company in Denmark, it sells a service to a US company, and they want to sue me in Denmark ... go ahead, that will be quite expensive and almost certainly gain them nothing. So if your home country is not friendly to liability lawsuits, then you can get a fair amount of protection by structuring your Terms of Service properly, especially around which country law it's governed by.
Note that this will not protect you against getting sued in another country -- but it may enable you to get that case dismissed.
Disclaimer: You should go see a real lawyer about this.