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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, and usually by those who are 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.

The most important factor will be flexibility. You will want policies that cover any member of staff so even the most recent recruits can jump behind the wheel.

Of course, policies vary enormously, so you should do your research to find out exactly what each one covers, the level of protection offered, and 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 whether you need a policy. A prime example could be a mobile tyre-replacement service.

Who needs motor trade insurance?

If your business is involved with vehicles, chances are you’ll need motor trade insurance.

Car dealers, mechanics, body repair shops, breakdown recovery firms, valet parking services and car restorers will need cover.

Then there are other firms. For example, car valeting businesses, scrap yards, and even those involved in repossessing vehicles must consider the risks they face.

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

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

While some customers’ own policies have been known to cover other drivers, albeit on a more limited third-party basis, this is less likely today.

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?

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

You will need to consider the protection required. 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 the risks is essential. Not only does it mean you won’t get a shock when a claim is rejected, but you also won’t be paying for cover that’s not needed.

What does motor trade insurance cover?

Motor trade insurance covers vehicles that are in your care as part of your business.

The scope of policies varies depending on your business. If you run a repair garage, you’ll likely need accidental damage cover to safeguard you from problems occurring when mechanics are working on a vehicle.

You may want protection from claims made due to the incorrect fitting of parts, which comes under defective workmanship.

You might also need cover for vehicles, either your or your customers, that are kept on your property overnight.

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.

What is a road risks policy?

Road risks insurance allows you to drive vehicles in your possession. This cover is required if you are working on them, driving them, or have even recently bought them.

For example, your staff may be delivering cars to buyers or taking vehicles out on drives to check for faults or for pre-booked MOT tests.

Of course, if your business doesn’t require vehicles to be driven on public roads, you could consider parts-only cover. This will likely be cheaper, in exchange for a more basic level of cover.

Road risk insurance comes in three types just like car insurance: comprehensive, third-party, or third-party, fire and theft.

What else can motor trade insurance cover?

Motor trade policies can be extended in various ways to meet your needs. 

Some cover uninsured loss recovery and motor prosecution defence costs of up to £100,000 per claim, while others cover property and money in transit.

Essential personnel protection pays out for death or permanent disablement of a key person whose absence will interrupt business activities.

Fines and damages cover can be used for non-completion of contracts. Some extensions can even cover public relations expenses in relation to claims.

A lot will depend on the size of the business. Large businesses turning over more than a million pounds are likely to have more complicated needs than a one-man-band.

The most common motor trade insurance policy additions which you might consider, include:

Employers’ liability insurance protects your business against claims from your staff. You should have employers liability insurance if you have employees regardless of whether or not they’re driving vehicles. If they injure themselves at work, your business could be held liable, with compensation costing many thousands of pounds.

Public liability insurance safeguards you and your workers against claims made by customers or members of the public. For example, if someone is accidentally injured in your workplace then they could be entitled to claim a substantial sum in compensation.

Product liability insurance offers your business protection if you fit a new part to a customer’s vehicle, but it subsequently turns out to be defective.

Material damage cover covers any vehicles or equipment you own. For example, if you run a motor dealership it means your unsold vehicles are insured. Such insurance may automatically increase in value during peak registration periods in March and September, although this will obviously depend on the terms of the policy.

Extra drivers as for many businesses, it’s important that their trade policy covers all their staff. But opting for an “any driver” policy is likely to be more expensive than either naming any insured drivers on the policy or limiting cover to just a handful of employees. Either way, it’s worth comparing the various costs to see which is preferable.

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
  • Have more driving experience
  • Invest in extra security for your business

Your insurer might also discuss how the scope of offer may be modified to reduce the overall premium, such as a limiting what is covered. As always with 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 may be more expensive so ensure the policy only covers what you need.

Need more help?

What is combined motor trade insurance?

These policies are designed for traders with more complicated businesses. For example, they may be ideal if you’re holding a number of vehicles on the premises.

Stock stored will also come under such a scheme, along with portable tools, machinery, and even business interruption insurance.

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

Can I get part-time motor trade insurance?

Yes, it’s possible to get this cover. These policies are aimed at people who are involved in the motor industry but have a primary occupation elsewhere.

This means individuals selling cars in their spare time, repairing or servicing them on the side, or carrying out some work on vehicles at home.

What age can you get traders insurance?

Most motor trade policies will require you to be over the age of 25, although some will accept you for certain business types from age 23. Getting cover below this age can 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 normal insurance policies. Their lack of experience on the road means they are classed as higher risk.

How do you qualify for traders insurance?

Most people over the age of 25 can get access to traders’ insurance for their business without too many issues.

Potential problems can occur with criminal convictions – largely depending on the nature of the offence – and whether they have excessive motoring convictions or bans.

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Motor Trade insurance is arranged and administered by Quote Me Today Ltd who are authorised and regulated by the Financial Conduct Authority No: 786619. Registered office, Office 2A, First Floor, 3 Jubilee Way, Whitstable Road, Faversham, Kent, ME13 8GD Registered in England and Wales, No: 04668665. Our service is free and compares a wide range of trusted household names. Confused.com is an intermediary and receives commission, which is a flat rate fee from QuoteMeToday.co.uk if you decide to buy through their website.