If you have recently started your own motor trade business, it is likely that your private vehicle insurance will no longer be valid for your needs. We look at the various ways in which you can make the switch from private to commercial vehicle or motor trade insurance, and how each policy can cover your business.

What Business Cover Does My Private Policy Provide?

Private car insurance covers you as the registered keeper and owner of your vehicle to drive for social, domestic and pleasure. In general, most private policies will also include travel to and from your place of work.

If you intend to use your vehicle for delivery driving, or work as a mobile mechanic, valeter or breakdown recovery operator, you may need to transfer from a private policy to commercial vehicle insurance or a motor trade policy.

From Private to Commercial Vehicle Insurance

If your trade involves you being the sole driver of your own car or van, you may need to consider a commercial vehicle insurance policy or road risk insurance, depending upon your business and if you will be driving other people’s vehicles for any reason.

To reduce your premium when using your vehicle for work, depending on your insurer, you can often transfer your private no claims to a commercial vehicle insurance policy. A word of caution here though – if you decide to stop working in your trade, you may not be able to transfer your no claims back to your private insurance policy.

Another option that is offered by some insurers is home fleet insurance cover. This multi-vehicle policy allows you to put a combination of vehicles on one policy including family vehicles, commercial vehicles and even classic cars or motorbikes. With one premium and one renewal date, this is often one of the more flexible policies when starting out in business.

What Does Motor Trade Insurance Offer?

If you are going to be involved in selling, repairing, or buying motor vehicles rather than simply using your vehicle for your trade, you may need a motor trade insurance policy that includes road risk cover. Whilst it has similar elements to private insurance in terms of third-party and fully comprehensive, it also includes the necessary cover you will need for your motor trade business.

A third-party road risks insurance policy is the minimum legal requirement for a motor trade business and protects against damage to other people’s vehicles or injuries sustained by third parties.

A road risks policy may include the following:

• Ability to drive other people’s vehicles: This can include moving vehicles around your business property, taking them for test drives as part of repairs, or dropping off at a customer’s home.

• Driving different vehicle types: Having a motor trade insurance policy may cover you to drive many vehicle types and these will be specified on your policy, whether it’s cars, vans or HGVs. There will normally be restrictions on high performance or luxury cars.

• Multiple drivers on one policy: As your business expands, you may be able to add named employees to your policy so they will be insured to carry out the necessary work. Younger employees or those with limited driving experience, as well as drivers with motoring convictions, could have restrictions within the policy. There may also be an additional option of ‘any driver’ but this can be more expensive.

• Additional cover: With any motor trade insurance policy, you can include additional cover. This could be as part of combined motor trade insurance that includes cover for road risk together with equipment and your premises. Adding various types of liability insurance may also help to protect yourself against claims from clients or the public for faulty work or accidents. If you have employees, then it is a legal responsibility to protect them through employers’ liability insurance.

Before changing your insurance, consult with an experienced motor trade insurance broker to find out exactly what you need for your new business to keep costs down and give you the right cover for your specific trade.