Motor Trade Insurance

Motor trade insurance is the policy you take out should you own a business involving vehicles, ranging from cars to trucks, providing cover for businesses that deal with customer’s vehicles as well as their own. When a motor trade business deals with customer vehicles, that vehicle essentially falls into ‘care, custody and control’, which is where this specialist insurance policy comes in.

The phrase ‘care, custody and control’ typically refers to vehicles that have been left in the possession of your business and are no longer covered by the owner’s own vehicle insurance.

Motor trade insurance covers a wide variety of business types, from vehicle sales and servicing to car valets, breakdown services, motor mechanics, car traders and more. Given that businesses are varied, it’s essential have every policy specifically tailored to each individual or firm.

Coverage can also extend to scrap, salvage and vehicle dismantlers, as well as full and part-time motor traders with road risk or stock of vehicles at trade premises. We specialise in the following areas:

The cover provided by each motor trade insurance policy varies depending on the risks you face. Despite the diverse range of businesses in the motor trade, it will typically include all or some of the following:

• Road Risks Policy – this allows you to drive yours as well as others’ vehicles for the purpose of carrying out your motor trade activity.
• Parts-Only Cover – Whilst the third-party option tends to be the most basic option, if your business doesn’t require vehicles to be driven on public roads, a parts-only cover could be enough – subject to the nature of your business.
• Combined Motor Trade Insurance – This type of policy provides cover for road risks, equipment and your actual premises. This option will be cheaper than having several separate policies.
• Employer’s Liability – as soon as someone is employed, this is a legal requirement. It can be added to your standard motor trade insurance policy if need be.
• Public Liability – This is another type of cover that can be included as part of a single motor trade insurance policy. This protects you and your employees against any claim made by a member of the public.
• Product Liability – If you fit parts to a vehicle that turn out to be defective, this covers you against any claims which may arise.
• Material Damage – This provides cover for damage done to any stock vehicles or equipment you own, such as unsold vehicles you might own as a car salesman.
• Extra Drivers – If your employees drive customers’ cars then you’ll need to decide between an ‘any driver’ policy or adding several named employees as extra drivers. In many cases, the latter will be cheaper.
• Vehicle Types – You must make sure your insurance covers you and your staff to drive the necessary vehicle types, whether it’s cars, vans or HGVs.

If you run a business in the motor trade, you are legally required to have a basic level of motor trade insurance. This applies to mechanics, car dealers, vehicle valets and other similar businesses whether a full-time or part-time business. The minimum level of cover required is third-party only, but liability cover is also recommended.

As well as putting the necessary insurance in place, anyone operating a business in the motor trade also has a legal responsibility to supply information to the Motor Insurance Database (MID).

The number of extras that can be included on a motor trade insurance policy is vast; so think carefully about the types of cover you may need. This will normally depend on your business type. And as some extras require additional fees, you need to make sure you do not already have the relevant cover from another source.

As with personal car insurance, there are three levels of cover to choose from: third party, third party fire and theft and comprehensive.

• Third party – Legally, this is the minimum level of cover you must have to drive on public roads. This will cover you whilst driving vehicles, whether they are your customers or your own, for damage, loss or injury that you cause to third parties. This is the least expensive level of cover but also the most basic.
• Third Party Fire and Theft – As the name suggests, this provides all the cover of Third Party but also protects you against damage from theft or fire related incidents.
• Comprehensive Road Risks Policy – As well as the cover included above, a comprehensive road risks policy will also cover you for any accidental damage caused to your vehicles and those under your care, custody or control.