If you are working as an importer and exporter of vehicles, you will need the correct motor trade insurance in place to cover you for road risks, storage and the selling on or delivery of your investment.
Depending on your needs, it is essential to find the right motor trade insurance broker. Commercial import and export insurance cover should be available whether you are a new venture or established, and if working on a full-time or part-time basis.
Tradex can also offer premium importer and exporter insurance policies whether you operate from a business premises, own multiple companies or operate from home on a self-employed basis. with policies on importers and exporters of vehicles to or from the UK.
As well as covering you for all your road risks needs, you may require a combined policy that will cover you for your premises including contents equipment and stock together with public and employers’ liability insurance.
What is Vehicle Import and Export Insurance?
This type of motor trade insurance protects importers and exporters from certain risks when shipping vehicles abroad. It is sometimes also called freight, cargo, or import-export insurance.
Policies protect your business from financial loss if something goes wrong – for instance if the vehicles you export or import are damaged or stolen.
Commercial importer and exporter insurance can also cover legal fees and compensation if a claim is made against you. Without cover, you would be expected to meet all of these costs yourself.
Getting Started With Insurance
Here is an overview of the type of policy offered by Tradex. Depending on the size of your business, the level of commercial importer and exporter insurance you need will obviously vary.
· Road risks for motor trade which should include recovery and movement of your own and customers vehicles with the policy open to the addition of other drivers.
· Extensions for secondary activities such as the buying and selling of vehicles.
· Specific cover for high value stock and specified cover for expensive vehicles.
· Specialised equipment, machinery and plant cover including the possibility of high sums for larger enterprises.
· Building cover for the possibility of flood or weather damage.
· Money on premises and theft cover.
· Business interruption insurance in case you, or your business, is unable to operate for a time
· Bonus Booster available. This offers those with no bonus a six month policy to accrue a year’s no claims discount and subsequently use this with us on a full term policy.
· Protected bonus.
· Additional business cover use for other occupations.
International Insurance Cover
Whilst motor trade insurance will cover you to move cars around a yard or drive a customer’s car for short distances, importing a vehicle could involve driving them across international borders and possibly many hundreds of kilometres.
Unlike motor trade insurance for vehicles and businesses just based in the United Kingdom, commercial importer and exporter insurance needs to cover a very specific range of risks.
These risks do not just include bringing vehicles into the country or exporting overseas, they can also include vehicle parts or even equipment.
Whilst Tradex offers full cover for businesses that import and export vehicles where a road risks policy is necessary, there other more specific additional cover for transiting vehicles to and from another country including a complete ‘throughput’ policy.
Any EU insurance cover required for importing of vehicles would need to begin and finish in the UK, for example, taking a car transporter from the UK to Spain to collect a vehicle and then driving the transporter back to the UK.
All second hand imported vehicles less than 10 years old from the date of manufacture will be subject to a full Singe Vehicle Approval (SVA) test. Your insurance only becomes valid once the vehice has passed the SVA test.
Getting Started With Insurance
This is an essential part of motor trade insurance for all vehicle businesses including imports and exports. It will enable you and your employees to transport the vehicles in your possession legally and cover you for collisions. This applies to vehicles when being driven in the UK.
You will need third party only (TPO) cover at the very least but this will not cover the damages caused to the car you are driving. A fully comprehensive road risks policy will cover both any third-party vehicles as well as the one you are driving.
Combined Motor Trade Insurance
If you operate from a building, a combined policy will enable you to protect your premises, stock and tools. Certain aspects of a combined policy may also help if you do operate from home, such as tools and equipment together with liability insurance
A combined insurance policy is more convenient to administer as well as saving you financially as everything is under one policy. A combined policy can cover road risks as well as:
Public liability: Often overlooked by new businesses, avoiding adding public liability insurance to your cover can leave you open to claims. If a member of public were injured or killed as a result of negligence on your part, you could easily find yourself facing a hefty claim against you, together with expensive legal fees. Public liability cover protects you against any costs that result from someone making a claim against you or your business. Limits start from £2m up to £5 million, and more if required.
Employers’ liability: If you have employees, this is a legal requirement. Your insurance policy must cover you for at least £5 million and be issued from an authorised insurer. This safeguards businesses against legal and compensation expenses from employee claims. It is a key type of insurance, protecting the health and safety of your employees – if one were to become injured in the context of the work they do for you, they could make a claim. If you need employers’ liability but do not have it, you could be fined £2,500 every day you are not properly insured. You can also be fined for £1,000 if you do not display your EL certificate or refuse to make it available to inspectors when they ask.
Marine cover for stock in transit: If you are going to be transporting your vehicles by sea, Tradex offers specific marine cover to help protect against lost shipments, damaged cargo, destruction or theft of goods while they are being imported or exported. Always check the terms of your policy for any exclusions.
Business premises cover: Covers property and permanent fixtures and fittings your business owns, for example, an office or storage building. It should insure your building for all types of damage including flood, fire, vandalism and forcible entry. Some policies also offer the option of accidental damage.
Office equipment: Covering your office contents including work on computers, hard drives, printers and office furniture.
Equipment and tools: Covering any large, fixed equipment, tools and other machinery against damage or theft.
Stock: All types of trade stock can be covered.
Storage cover: Goods and vehicles will be protected at a UK premises when imported or before being exported out of the country.
Money: Insures against loss of money within your business premises and also in personal custody or in transit.
Business interruption: Covering your business in the event you are no longer able to trade for a variety of reasons including fire, flood or explosion, loss of trading licence. A good policy will include loss of income or profits during the time of business closure.
Ways to Save Money on Importer and Exporter Insurance
The cost of your policy will depend on several things, such as the types of cover you choose the amount of coverage you need and who you choose to hire.
While it is important to make sure you are covered for the genuine risks your business faces, there are a variety of ways you can help to keep your premiums down when taking out a commercial importer and exporter insurance policy.
Paying upfront: If you can afford it, paying for your policy on an annual basis can help to lower your premiums significantly. It can mean quite a considerable sum depending on the size of your motor trade business, but it will also mean it is one less regular payment to worry about.
Hiring experienced staff: Hiring more experienced and reliable staff and drivers will help you to save money on your motor trade insurance. You will have to list all employees on your policy and an insurance broker will take into account how many more mature employees you have on board. Experienced drivers reduce the likelihood of making claims and therefore you pay less.
Improve your driving: If you do hire less experienced or younger drivers, putting them on an advanced driving course can help to reduce your premiums. Advanced driving courses reduce the likelihood of accidents and therefore, cheaper insurance.
No Claims: Accruing your no claims bonus will help to reduce your premium, protecting them can also reduce any future price rises. If you have younger drivers without any no claims, Tradex offers its Bonus Boost policy to help accrue them within a shorter time span.
Premises security: The more you can prove that your premises is fully secure, the less the premium. Fitting CCTV can deter would be thieves and also provide a record of any incidents for the police and your insurance broker. Fitting high metal fences and lockable gates together with installing security lights will keep people out, helping to keep premiums low.
Fire alarm and sprinkler systems: Knowing you have systems in place should there be an outbreak of fire will be favourable when considering health and safety risk assessments.
Structural surveys: If you own your building, having a surveyor inspect and confirm the property is in good order is a real selling point to insurers.
Increasing your voluntary excess: Increasing the amount you were to pay should an incident happen will help to keep your costs down.
Part-time cover: A good insurance broker will recognise that you only work in the motor trade on a part-time basis and offer a more flexible policy to cover you only for the amount of time you need. This will be considerably cheaper than paying for full-time cover.
Reading the Small Print
There is no doubt that exporting and importing cars does carry some risks specific to the trade. A good importer and exporter insurance policy can help to protect you from many of them, but some insurance brokers will put limits in place.
Levels of compensation need to be adequate for the size and scope of your business, so it is essential to go with a trusted motor trade insurance underwriter with many years of experience of importing and exporting companies.
When going through your policy, it is important to check the small print and question any terms you may not understand as this could be vital in the event of a claim.
Starting an Import/Export Business
Import and export businesses handle the sale, distribution and delivery of goods from one country to another. If you are interested in starting a business in the vehicle industry, you could focus just on importing or just on exporting.
When thinking about starting a vehicle import and export business, there are many considerations you need to think about, just like any new business. Specific to import and export, you will want to have a very good understanding of international relations and the many hurdles you will need to overcome before selling or buying a product from an overseas supplier.
To improve the chances of operating a successful and profitable import/export business, it is important that you do market research on your chosen industry to be able to produce a well-written business plan.
You will need to understand what costs are involved with the importing and exporting of your vehicles and determine what kind of profit margins you can expect to make.
The Export and Import Licences
Export licences are government-issued documents authorising your vehicle export business to complete certain transactions.
The documents you will need to import vehicles will vary depending on the country that you are intending to import your vehicles from or export them to. Importantly, all the correct licenses and permits need to be planned in advance.
There is no doubt, the world of importing and exporting can be complex. The good news is that there are freight forwarding companies that can take some of that burden off your shoulders for a fee.
However, with the proper research, planning, and documentation, you will be able to launch a successful and prosperous import/export business of your own.
Importing to the UK
These are a few things you will need to consider when you start to import for your start-up:
· The correct commodity code for your goods.
· You will almost certainly need to pay VAT and fill in a VAT return if you are VAT registered.
· You will need to register with the Customs Declaration Service, which supports making import and export declarations when moving goods into and out of the UK. You can make declarations as soon as you have signed up to use the Customs Declaration Service.
Starting to Export
To make the most of exporting there are some important steps to follow which will help your business to grow:
· Make sure you have thoroughly researched the markets that you have planned to export to.
· Investigate the customs demands for exporting and your legal obligations.
· Review your finances to make sure you have sufficient money to cover your import and export obligations.
Here are a few tips to get you started in your new venture:
1. Picking a product to import or export
The first step in starting your import/export company is to decide on the type of vehicles you are intending to transport. This may depend on your particular expertise, whether that is cars or vans, new or second hand vehicles.
2. Identifying your market
Once you have decided on your vehicle type, you need someone to sell it to. The best products for an import/export business are those that are currently popular or likely to be in the future, maybe that is electric cars or classic designs.
3. Putting together a business plan
When thinking about your business plan, you will need to include how you intend to handle the rules and regulations of each country where you have decided to import or export. You will need to take into account everything from permits, licences, paperwork and motor trade insurance, and have an indication of how long this will all take to put together.
You will also need a business plan if you intend to apply for a bank or business loan. Starting as an importer and exporter business can require more capital than some other areas of the motor trade and a lender will want to know you have considered all aspects of the plan.
4. The right documents
After you have secured funding, your next step is to put the foundations in place. This means registering your business and applying for all the licences you will need to legally operate your importer and exporter business.
5. Motor trade insurance
Once your business has been registered, it is also time to investigate the right level of commercial importer and exporter insurance. Make sure you receive three or four quotes from reputable brokers to compare the levels of cover and competitive pricing.
6. Think about your marketing
If you intend to promote your business on an international stage, you will need to be visible. For this you will want a professional website to promote what you do, how you do it and your product offering. This can be linked to social media accounts such as Facebook and Twitter to give more even greater exposure.
7. Sourcing your suppliers
When starting out, it is beneficial to check any useful contacts, as well as finding your local Chamber of Commerce, trade consulates and local councils for advice and potential business leads. Building strong partnerships in importing and exporting will be crucial for getting your business established.
8. Pricing your products
You have already decided on the vehicles you want to import and export and you have identified your target market. Next is the important part, figuring out how much to charge for your vehicles. Make sure that your markup on the product (i.e., your commission), does not end up being higher than what a customer is willing to pay.
9. Securing the logistics
Often, the most complex aspect of importing and exporting is the logistics of how to take a product and sell it somewhere else. Many people hire a global freight forwarder who specialises in moving cargo.
A freight forwarder can arrange customs clearance of goods and maintain all the necessary documentation so you can focus on your business. They can also serve as a transport agent for moving cargo saving you a lot of time and worry.
Essentially, a freight forwarder can arrange arrange the shipping agreements, licenses, permits, tariffs and quotas of working within another country. This can help to remove a lot of the headache when starting an imports/exports business in an international trade market.