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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 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 itself.

The most important factor is flexibility. You likely want policies that cover every member of staff. This means that even the most recent recruits can jump behind the wheel without worry.

Of course, policies vary enormously between insurance providers. So, you should do your research to find out exactly what each policy 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 motor trade insurance. 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 need motor trade insurance. This includes:

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

Then there are other firms. For example, car valeting businesses, scrap yards, and even 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.

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?

No two 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 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 these risks is essential. It means you’re less likely to have any claims rejected and 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 and cover will vary 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. 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 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 cover could be modified to reduce your overall costs, such as limiting what’s 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 might be more expensive so ensure 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 purchasing.

Motor trade policies can be extended 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 can pay out if a key member of the business dies or is permanently disabled.

Fines and damage cover can be used 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 being used by employees for personal use might not be covered. If you think this might be an issue, check with the provider before committing to a policy.

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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