2000ft is completely illegal. Maximum permitted ceiling for a UAV is 400ft and within visual range.
The best place to read up on this is the CAA website:
http://www.caa.co.uk/default.aspx?CATID=1995
Courses:
http://www.eurousc.com/ and
http://www.resource-uas.co.uk/RPASTraining/RPQstraining.aspx
These are the main rules you need to adhere to:
The maximum altitude is 400 feet (120 metres)
The maximum distance from the operator is 500 metres
The minimum visibility needs to be 5 km
UAV must be flown in line of sight of the operator
UAVs cannot be flown at night without special permission
Permission must be obtained from the owner of the take-off point
UAVs cannot be flown within 50 metres of structures, vehicles or people that are not under the control of the person in charge of the aircraft.
With regards to your liabilities insurance. I would be extremely surprised if Hiscox actually paid out if you damage someone or something while flying in contravention of CAA regulations. Even if their policy says they will, no one will insure you to do something that is illegal.