If you’re looking to start up in the motor trade, you will need motor trade insurance. What this includes will vary depending on your business, but as experts in the field, Tradex has a range of options to suit every profession. We look at the insurance cover you will need as well as those optional extras.
Who Needs Motor Trade Insurance?
The law requires that you have a motor trade insurance policy if you are looking to buy or sell vehicles, drive customers’ vehicles or are responsible for them in your work capacity.
The list is lengthy but includes both part-time and full-time work including mechanics, body repair shops, MOT stations, car-valeting companies, car showroom specialists, second-hand car dealers, breakdown and recovery operators and even classic car restoration and repossession companies.
What is Motor Trade Insurance?
Motor trade insurance is designed to cover your business and its employees when driving your company vehicles or those of customers, as well as offering protection for those working on them. As motor trade businesses can vary considerably in their scope, so the motor trade insurance is tailored to meet all eventualities.
The idea of a motor trade policy is to offer flexibility around the size of the company, from a self-employed breakdown recovery expert to a full car showroom. As well as moving or delivering a customer’s vehicle, there are other elements that include protection in case of faulty workmanship leading to customer injury or damage to a vehicle.
What Will Motor Trade Insurance Cover?
Before contacting a motor trade insurance broker, take a good look at the business you are establishing and the main risks that you want to be covered. It’s as easy to try and cut costs by having too little insurance as it is to spend out for too much, choosing add-ons you really don’t need at the early stages of your business.
Some areas you need to consider are whether you are working part-time from home or have a business premises, how many vehicles and drivers you need to insure, the level of security your business has and whether you are able to transfer your no claims bonus to your motor trade policy.
Here is a quick guide to the main types of motor trade insurance that is generally on offer to give you sufficient cover when getting started.
- Road risk: This will cover you if you are driving vehicles on the public highway as part of your business. This includes both your own vehicles as well as those of your customers and incorporates taking a vehicle out for a fault check as part of a service, moving it from one location to another or delivering to a buyer. If you aren’t driving vehicles on the road, you might want to think about parts-only insurance. As with normal motor insurance, road risk motor trade insurance policy has three levels of cover including third party only, third party fire & theft and fully comprehensive. If you are buying and selling vehicles, you need to make sure your insurance policy covers you to drive vehicles on motor trade plates.
- Liability insurance: People often overlook liability insurance to save money in the early stage of a business. This can be a costly mistake if someone decides to make a claim against you for damages to themselves or their property. The most important liability policies include public liability, product liability and employers’ liability – of these, only the latter is a legal necessity.
- Combined Motor Trade Insurance: This is an ideal way to get all the cover you need tailored to your business. As well as road risk, with combined motor trade insurance you can include equipment and your premises, protecting your stock and your tools. This often works out less expensive than choosing individual cover.
For all motor trade businesses, getting the right cover for your specific business will mean talking to a specialist broker such as Tradex. Other insurance you may need includes demonstration cover to allow customers to test drive your vehicles, carriage of vehicles to protect sold vehicles when collecting or delivering them, material damage cover, extra drivers (any driver or named driver) and insuring staff to drive different vehicle types including vans and HGVs.