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.

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.

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.