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Motor trade insurance

Motor trade cover for full-time and part-time businesses

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What is motor trade insurance?

Motor trade insurance, or traders insurance, is used by a wide range of businesses. Usually, it benefits those involved in repairing or selling vehicles.

It covers your employees when they’re driving or working on your customers’ vehicles, as well as those owned by the business itself.

The most important factor when choosing motor trade insurance is flexibility. You likely want policies that cover every member of staff in your business. This means that even the most recent recruits can jump behind the wheel without worry.

Of course, policies vary between motor trade insurers. So, you should do your research to find out:

  • Exactly what each policy covers
  • The level of protection offered
  • Any exclusions that apply

Motor trade insurance isn't just for driving other people's cars - if you interact with customer vehicles in any way, you should consider motor trade insurance. A prime example could be a mobile tyre-replacement service.

Do I need motor trade insurance?

If your business is involved with vehicles, chances are you need motor trade insurance. This includes:

  • Car dealers
  • Mechanics
  • Body repair shops
  • Breakdown recovery firms
  • Valet parking services
  • Car restorers

Other firms could also benefit from motor trade insurance, including:

  • Car valeting businesses
  • Scrap yards
  • Those involved in repossessing vehicles

If the vehicles come under the ‘care, custody and control’ of your staff, you might need this type of cover in some form.

You may also need combined motor trade insurance. These policies are designed for traders with more complicated businesses. For example, they may be ideal if you’re holding several vehicles on the premises.

These policies could also include:

  • Stock stored
  • Portable tools
  • Machinery
  • Business interruption insurance

Whether you need this level of cover depends on the nature and size of your firm.

The requirement to have motor trade insurance applies to all businesses – whether you’re self-employed or run a fairly large, limited company. The same risks apply.

Either way, can your business afford to take that risk? It’s much better that you have the proper insurance cover in place to protect you and your customers.

How does motor trade insurance work?

Motor trade insurance is a little different to your standard car insurance policy, but the basics are the same. Depending on what level of cover you get, motor trade insurance covers the vehicles in your care from:

  • Loss
  • Damage
  • Theft

No businesses are exactly alike. Insurance companies understand this and that’s why they generally offer tailor-made policies to meet your firm’s specific requirements.

You need to consider the protection your business requires. Think about:

  • What kind of work your business carries out
  • How often you’re driving customers’ vehicles
  • If you’re repairing customers’ vehicles

Making sure your policy covers these risks is essential. It means you’re less likely to have any claims rejected and you aren't paying for cover that’s not needed.

It's also possible to get part-time cover which can help people selling cars in their spare time, repairing or servicing them on the side, or carrying out some work on vehicles at home, but have a primary occupation elsewhere.

Can anyone get motor trade insurance?

Most people over the age of 25 should get access to traders’ insurance for their business without issue, although some might accept you for certain business types from 23 years of age. Getting cover when you're younger than this might be difficult, but give us a call and see if we can help.

The younger you are, the more you should expect to pay for cover. It’s similar to younger drivers on standard car insurance policies. Their lack of experience on the road means they tend to be classed as higher risk.

Potential problems can occur if your driving record has:

  • Criminal convictions – largely depending on the nature of the offence
  • Motoring convictions
  • Driving bans

Get a motor trade insurance quote

What does motor trade insurance cover?

Motor trade insurance covers vehicles that are in your care as part of your business and cover varies depending on your business.

Accidental damage cover, for example, might be useful if you run a repair garage. It means you’re covered for accidental damage caused to a customer’s vehicle.

Road risk insurance protects those in the motor trade. This is a legal requirement and makes sure that the vehicles under your care are protected. This includes your own vehicles as well as those awaiting repair, for example.

Depending on the policy you choose, you might also see these cover options:

  • Employers’ liability cover, which is a legal requirement. Employers’ liability cover protects you from legal costs and compensation if an employee is injured on the job.
  • Product liability can cover you if someone takes legal action against you. This could be due to faulty parts, for example.
  • Public liability is a feature that covers you if someone injures themselves while on your premises and takes legal action against you.

You can also get policies that combine road risk and liability cover. This is why it’s worth exploring your options and seeing exactly what you’re getting for the price.

Each motor trade insurance policy is tailored specifically for your business, but a motor trade policy might typically cover:

  • Damage to any vehicles or equipment on your premises
  • Vehicles that you drive or work on as part of your business - this is known as a road risk policy
  • Members of staff driving vehicles as part of the business
  • Claims made against you and your workers by members of the public.

How much is motor trade insurance?

There are several factors that impact how much you pay for motor trade insurance, including:

  • The number of vehicles covered under the policy
  • Your employees' driving experience and history
  • The nature of your business and how you interact with other vehicles

How can I get cheaper motor trade insurance?

You might be able to save money on your motor trade insurance if you:

  • Keep your driving licence clean
  • Ensure all employees that are driving vehicles have a healthy driving record
  • Have more driving experience
  • Invest in extra security for your business
  • Reduce the number of vehicles that are covered under the policy

Your insurer might also discuss how cover could be modified to reduce your overall costs, such as limiting what’s covered. If you're looking for cheap motor trade insurance it’s worth doing your own research.

The types of vehicles you and your staff will be driving is also relevant. Cover for larger vehicles might be more expensive so make sure the policy only covers what you need.

What level of motor trade insurance cover do I need?

As with standard car insurance, there are 3 levels of cover you can choose from when getting a motor trade insurance policy.

  • Third party is the minimum level of cover. It covers damage to third parties while you’re using a customer’s or a company car. It doesn’t cover damage to the car you’re driving.
  • Third party, fire and theft covers third-party damage, but also protects you from repair and replacement costs if the car is stolen or suffers fire damage.
  • Comprehensive provides the same level of cover as third party, fire and theft and adds protection for the car you’re driving as well. This applies to cars that belong to your company as well as cars belonging to customers.

What else can motor trade insurance cover?

It’s recommended that you check the policy details to see what’s covered before you commit to buying.

You can extend motor trade policies in various ways to meet your needs. Policies can include:

  • Uninsured loss recovery
  • Motor prosecution defence
  • Essential personnel protection
  • Fines and damage cover
  • Material damage over
  • Business premises cover
  • Demonstration cover
  • Specialist vehicle cover
  • European cover
  • Goods in transit
  • Parts only cover

Uninsured loss recovery covers extra costs following an accident that’s not your fault. The other party’s insurance should cover the main claim. But it might not cover things you have to pay yourself, like hiring a replacement car or taking public transport.

Motor prosecution defence covers the costs of hiring someone to defend you against a motoring-related prosecution. Depending on the policy, you might not be covered for prosecutions for, drink or drug driving and parking offences.

Essential personnel protection pays out if a key member of the business dies or is permanently disabled.

Fines and damage cover could be useful for non-completion of contracts. Some extensions even cover public relations expenses in relation to claims.

Material damage cover protects any vehicles or equipment you own. For example, if you run a motor dealership it means your unsold vehicles are insured.

Business premises cover protects the building itself, as well as tools and machinery inside. If you have a break-in and thieves steal or damage valuable equipment, you could be covered.

Demonstration cover protects any cars that are used by customers for test driving. Depending on the policy, you might have the option of adding accompanied or unaccompanied demonstration cover.

Specialist vehicle cover lets you work on heavy goods vehicles or high-performance cars. Standard motor trade insurance policies usually cover standard vehicles or those under a certain weight or value.

European cover protects you for any vehicles that are driving in Europe.

Goods in transit covers any goods in your vehicles that you transport as part of your business.

Parts only cover could be suited to those who don’t actually drive their customers' cars. Here you get what you pay for - only the parts you use are covered.

What doesn’t motor trade insurance cover?

Most policies only cover vehicles that are used for work purposes.

That means any fleet vehicles that are used by employees for personal use might not be covered. If you think this might be an issue, check with your motor trade insurer before committing to a policy.

Get a motor trade insurance quote

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