Whether your motor trade insurance policy is up for renewal or you are just starting out within the industry, making sure you are covered with the right level and type of insurance for your business will keep you are protected. We compare road risk insurance and combined insurance, what are the differences and how to determine what your business might need.
What Cover Should I Invest In?
When choosing between road risk motor trade insurance or combined motor trade insurance, you need to take a good look at the size of your business, where it’s located and whether you have employees.
A road risk only insurance policy is designed for traders that have just started out in business, operate from their own home and have not yet employed a team. A road risk policy will be cheaper, which is important when you are just starting out, but it will only cover the road risk element.
As with regular car insurance, road risk insurance has three basic levels of cover:
- Road Risk Third Party Only – the most basic level of insurance and the minimum legal level of motor trade insurance. It will only cover your liability if you are involved in an accident that is proven to be your fault. Your own vehicle or injury that you may have sustained isn’t included.
- Road Risk Third Party, Fire & Theft – In addition to Third Party, it provides cover against theft of a vehicle in a motor traders’ possession, and damage caused by fire.
- Road Risk Comprehensive – this includes the same level of cover as above, plus any damage caused to a car owned or in the custody of the motor trader. It also provides cover if a customer’s car is damaged whilst you are collecting, driving to the garage, repairing or test driving the vehicle.
A road risk policy can cover you to drive any vehicle, but it only protects named drivers. This is fine if you work on your own but if you have an employee, they also need to be listed on the policy otherwise they will not be covered if something happens when they are driving the vehicle.
Remember that if you do have an employee, you’ll need employer’s liability insurance, which can be added to your road risk insurance policy.
Many traders begin with a road risk policy to save money at the beginning of setting up a business and move onto a combined motor trade insurance policy as their business grows. An experienced broker would be able to advise when would be the right time to make the upgrade.
Do I Need a Motor Trade Combined Policy?
A combined motor trade insurance policy is designed for larger businesses with premises, including car dealerships, garage repair workshops, valeters and MOT stations. As well as covering you to drive and repair customers’ vehicles, there are a number of additional benefits depending on the type of motor trade business you run.
Having a combined policy allows you to put all of the insurance you need into one package, which may be significantly cheaper than buying different cover types individually. It also makes it simpler to add more cover as and when you need it, and your business expands.
If you have employees, you will also need to add employers’ liability insurance and should consider public liability to protect you against any injuries that may be sustained by your customers on your premises.
A combined motor trade insurance policy may include the following:
- The building where you operate your motor trade business
- Vehicle stock or general stock at your business premises
- Equipment and tools needed to operate as a motor trader
- Contents kept on the premises including fixtures and fittings
- Cash kept on the premises
- Personal belongings of employees or customers
- Any damage to vehicles on the premises
- Road risk
- Employers’ liability insurance, public liability, service and sales indemnity or public liability
- Business interruption
To find out whether road risk insurance or combined motor trade insurance is the best option for your business, or if you should be upgrading your old policy, contact you broker to talk through all the options.