Beginner’s Guide to Motor Trade Insurance

Well Dunn Insurance Blog , Motor Trade Insurance

Motor trade insurance is vital if you are into any business that involves vehicles and cars. If you are a car dealer or runs a garage, motor trade insurance is a must for you. More precisely, this particular insurance is a legal requirement when you are professionally involved with anything regarding cars.

Below is a list of conditions where motor trade insurance would be necessary:

  • Businesses that deal with vehicle repair
  • Businesses that deal with vehicle sales and that include individual traders as well
  • Firms  that cater to car breakdown & recovery
  • Garages extending servicing and MOTs
  • Firms into vehicle delivery
  • Specialist vehicle restorers and collectors
  • Businesses into vehicle repossession
  • Scrap yards
  • Car valet firms
  • Firms that fit or sell vehicle parts & accessories

Let’s see the different types of motor trade insurance:

In a broad sense, there are three types of motor trade insurance - Road Risk, Liability and Combined. We will explore each of these below in detail.

Road Risk

Road Risk insurance would be especially great for those who drive vehicles regularly as a profession, but does not own a one. It would be ideal for those into car servicing. Road Risk insurance again is divided into 3 types:

  • Third party only

This is the minimum standard requirement when you are applying for a road risk insurance policy. This particular scheme will offer coverage for loss, injury or damage caused to 3rd parties by your driving. When we say “3rd party”, we mean both vehicles & people inside them. However, this policy won’t cover your vehicle. On the other hand, it would cover your passengers.

  • Third party fire & theft

This policy would include everything covered by the previous one. Additionally it would provide coverage for damage, loss or injury caused by theft or fire accidents to vehicles under your custody.

  • Comprehensive insurance

Comprehensive insurance is the highest form of road risk insurance you can get. This policy covers both the two options mentioned above and more. By “more” it means coverage for any accidental damage caused to a car under your custody or control. So, if your customer’s car (that you’re driving) gets damaged in a clash, the insurance provider will pay the fees.

Liability insurance

Liability insurance provides coverage for any damage or injury incurred by your customer due to your negligence or unsafe conditions at your workplace. More precisely, it will cover for the fees if the injured part files a personal injury lawsuit on your name.

There are three types of liability insurance under motor trade insurance:

  • Public liability

Public liability insurance would cover for you if your customer meets with an accident at your premise. It is especially applicable if the accident or damage is due to your negligence in providing safe working environment.

  • Product liability

Product liability insurance would cover for you if an accident or injury or damage is caused to your customer or his vehicle given a faulty product fitted by you.

  • Employer’s liability

This liability insurance will provide coverage for you if any of your employees gets injured or dies while working for you.

Combined Motor Trade Insurance

A combined insurance policy would provide comprehensive insurance coverage for the motor trader. It means coverage for vehicles, money, premises, tools, contents and your liabilities. As the name says, you are getting a comprehensive policy for your entire business here.

Why to take to motor trade insurance?

There is a wide range of reasons why you should take to motor trade insurance.

For legal reasons

First and foremost, if you are into any trade that involves vehicles, you are legally required by law to get motor trade insurance.

Driver gets coverage to drive any vehicle

This is one of the most important benefits of motor trade insurance. In case of personal car insurance policy both the driver and car would be covered. However, the driver has the coverage if he is driving anything other than the car insured with him. This is why personal car insurance policy is not suitable for those into motor trade. If you are a fleet owner where you have drivers driving various cars - motor trade insurance would be the best. This particular insurance will assure that your driver is covered no matter whichever vehicle he is driving.

Coverage for business valuables

Motor trade insurance policy assures complete coverage for all your business valuables. From your business premise to cars under your custody to your drivers to your tools- everything would be protected under motor trade insurance. In fact, it will also take care of your employer’s liability and customer liability. Such a widespread coverage is not possible with personal car insurance. In simple words, motor trade insurance assures complete peace of mind for the business owner.

Uninterrupted business

Car accidents or vehicle thefts are not uncommon experiences for those into motor trading. Such mishaps can cause serious interruption to your business, leading to huge loss at times. But when your business, cars and drivers are protected under adequate motor trade insurance policy, you can let go off all such worries. An insured business always has its backing which enables it to continue with its business operations uninterruptedly – in times of accidents or disasters.

You can add spouse

What many don’t know is that motor trade insurance enables one to add his partner or spouse to the policy. It will help you to get decent savings on your domestic insurance. Just make sure to notify your insurance company about your wish to interest a family member.

Motor trade insurance caters to any size of business. There are various companies all across the UK that offer this insurance policy- but then not all would be equally compatible for you. Thus, you should always make sure to get a comparative survey on a few potential names before your final sign up. The one you choose should be a highly trusted name of repute, backed by long list of happy customers.

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