Also known as Traders’ Insurance, businesses operating within the motor trade need comprehensive cover, as there are many risk factors associated in working with vehicles. The insurances fall into either Risk, Liability or Premises. Here are the most common features to look for in your policy to make sure you and your business stay covered.
Building and Contents
Cover the premises, equipment and stock in the event of damage by fire, flood or adverse weather
Protection against all manner of risks common to driving on the road
Public, employers’ and product liabilities covered
Cover for employees using business or customer vehicles while on duty
Business Interruption Cover
Guaranteed revenue in the event business becomes inoperable due to any circumstances
Stock and Damage Cover
Protection against damage to vehicles kept on site
Motor Trade Risk Insurance
This is the minimal level of insurance legally required from a motor trader. However, it is up to them to decide whether to buy third party, third party fire & theft, or fully comprehensive coverage – as all 3 types meet the legal standard required.
As with normal insurance policies, third party will only cover damage to the vehicle of the third party involved in the accident, not the vehicle being driver by the trader, regardless of whether it is their own vehicle or a customer’s. Only fully comprehensive coverage provides this level of protection.
All motor traders who drive vehicles they do not own ought to have fully comprehensive insurance, whether they operate from a fixed business premises or from home.
Motor Trade Liability Insurance
If you are working in the motor trade, it is important to protect yourself and your business against any legal liability claims made against you by customers or members of the public. These include:
Public liability – protection against claims by members of the public
Employers’ liability – required by law if your business employees one or more people
Product liability – protection in the event your product causes injury or illness to a customer
A claim can be made for a variety of reasons, including poor quality workmanship or an accident involving a customer or a member of the public. They may be seeking compensation, or possible applicable medical expenses.
Motor Trade Premises Insurance
Motor trader premises insurance covers any equipment, buildings and their contents used by the trader and their business in the course of their work.
There is combined cover available that includes all of the above levels of coverage, which is fully comprehensive. Depending on your specific policy, your combined cover may also include some other features, such as:
Sales and service indemnity
Building and contents
This is specifically designed for large motor traders with a garage or a showroom on the premises.
Factors affecting policy premium
Number of vehicles covered – someone who trades from home will normally be limited to the number of vehicles covered by their policy. Whereas someone who trades from a dedicated business premises may seek out a policy that covers unlimited vehicles as the number of vehicles in their care tends to fluctuate.
Vehicle coverage for secondary occupations – if you work in the motor trade but have a separate secondary occupation, you can opt to have an additional vehicle included on your policy.
Demonstration coverage – normally this is limited to third party policies, covering the vehicle when being driven for demonstration purposes only.
Special vehicle cover – standard vehicles up to a certain weight are covered, but vehicles which fall outside of the limit will need additional cover. This includes: classic cars, performance vehicles, and commercial vehicles.
Types of Motor Traders
Your policy and its features will vary depending on which area of the industry you work in.
Service, repair and MOT garages
Crash and body repair
Commercial vehicle repairers
Mechanics / traders working from home
Vehicle breakdown and recovery
Vehicle delivery and collection agents
Tyre fitting / sales
MOT prep and testing
Comparing Policy Features
Make a list of which policy features are relevant for you before comparing policies from different insurance companies. This way you can decide which delivers the best value for money for your specific needs.
Some good points of comparison:
the cost of third party vs. fully comprehensive insurance
what is excluded from your policy
the contents of their standard policy and what needs purchasing separately.
No claims discount
Each of the variables mentioned in the previous paragraph
Save Money on your Policy
There are also several steps you can take to help reduce the price of your premium:
If you are a smaller business, try to avoid buying coverage for special vehicles unless it is absolutely necessary
Check to see if your personal, private no claims bonus can be transferred over to your motor trade policy
Minimise the number of named drivers on the policy, this will keep your premium down
Added/extra security measures, such as on-board dash cams.
Keep mileage as low as possible. This is easier for a local, small business.
Adding a private car to your policy might actually be more expensive than getting separate private car insurance.
Frequently Asked Questions About Motor Trade Insurance
If you work in an industry which requires you work with vehicles you do not own, then most likely you do need it. Car salesmen, mechanics and even valets should all protect themselves against any damages to the cars they work with; especially if you are working with them on a day to day basis.
You will have to inform your insurer of this. Motor trade insurance is for those that are actively trading, you will need to submit evidence of this and so if you are to stop trading, you will have to cancel the policy, and then take out another one when you resume trading.
If one of your vehicles that is covered by your motor trade insurance policy is written off, or stolen, then as a result of your motor trade insurance cover, you will be paid the trade value of the vehicle and no more.
Yes, however you must remember that a motor trade insurance policy is essentially a business policy and so the people added should be employed by your business, either as a business partner or an employee.
With a high performance vehicle the level of danger and risk is raised. Therefore a lot of insurers have restrictions on policies with regards to high performance vehicles. In some cases they will not cover them at all. This is something you must discuss with your motor trade insurance provider before you commit to buying a high performance vehicle.
Most motor trade insurance providers will allow you to alter your policy before renewal, however, it would be a good idea to check before you make your purchase just in case you do decide, at some point in the future, to modify your policy in any particular way.
If you have properly disclosed them at the policy inception then you should be covered. You will need to check with your motor trade insurance provider however that your vehicle does not fall into a restricted or unacceptable vehicle area. You will need to declare any vehicles in your possession for a certain amount of time to the Motor Insurance Database.
You need to keep the Motor Insurance Database up to date with any vehicles you own, or are likely to be in your custody for a certain length of time. If you wish to insure the new vehicle on the same policy you will need to inform your motor trade insurance broker.
Naturally, the answer to this question depends on a number of factors, most of which are concerned about the nature of your business. For example, if you are a second hand car dealer with a small private premise your insurance premiums will probably be lower than that of a car dealer who specialises in selling luxury vehicles. However, your insurance will also be based upon you as a person, so if you have claimed numerous times on your private car in the past few years you may pose more of a risk.
After searching for hours on the internet I finally came across QuoteSearcher who's partners provided me with excellent quotes far better than I had received from anyone else.
Neil Heron - Virginia Water, Surrey
I was delighted with the quotes I received from QuoteSearcher. I ended up making a saving of £300 on my insurance!
Nick Baker - Chorley, Lancashire
Motor Trade Road Risk Insurance
Find Quotes to Cover Road Risks associated with Motor Trade.