Motor Trade Insurance Explained

motor trade insurance explained

Holly Jones, Marketing Executive at 1st Choice Insurance, a leading independent commercial insurance broker based in the West Midlands, talks you through Motor Trade Insurance and explains its benefits.

You’re setting up a Motor Trade business and it’s time to start looking at Insurance. Let’s face it, your eyes have probably already glazed over in boredom before you even get started on trawling through the internet looking for everything you need to know. No need though, as I’ve broken it down into bite-sized chunks of information for you.

What is Motor Trade Insurance?

It’s a type of insurance policy specifically designed to protect people in the automotive industry from loss or damage relating to their business. A motor trade policy combines several protections under a single umbrella including factors such as public liability, employers’ liability, property insurance and road risks. These policies are precisely put together with auto traders in mind and offer a range of coverage options to protect your business assets and customer base.

A combined motor traders’ policy or road risks only policy are two common options available from insurance companies. Many insurance providers also offer dedicated coverage options for part-time traders, traders working from home, mobile traders, and specific automotive businesses. When you’re comparing cheap motor trade insurance, it’s crucial to analyse individual policies with regards to both their coverage and premium levels.

How does a Motor Traders Policy work?

Searching for individual insurance products can be time-consuming and nobody has time for that, motor trade policies are designed to function in a neat and efficient package. Combined motor trader’s insurance is often advised instead of taking out individual plans, as tailored contracts are more comprehensive, more affordable, and generally less risky.

Whether you’re a small mobile fitter or technician, or run several large commercial garages, a range of robust and cheap motor trade insurance products are available to you. There are two main types of motor trade insurance policy that are most common, Road Risks and Motor Trade Combined Insurance.

  • Road Risks insurance is for full or part-time motor traders who need cover for the common road risks which can occur when driving their own vehicles, or their customer’s vehicles for motor trade purposes. Like manoeuvres around a vehicle sales yard, or customer car collection service.
  • Motor Trade Combined insurance covers you with road risks, but it also gives you additional levels of protection to. This could range from garage contents insurance, to stock of vehicles, to public liability.

What does it cover?

You will have to choose which level of road risk cover suits your requirements. Just like with your personal car insurance, there are the same three levels of cover to choose from: third party, third party fire and theft and comprehensive.

  • Third party – Legally, this is the minimum level of protection you must have to drive on public roads. This will cover you whilst driving vehicles, whether they are your customers or your own, for damage, loss or injury that could be caused to third parties. This is the most basic and usually cheapest level of cover.
  • Third party fire and theft – This provides all the coverage of Third Party, but also protects you against any damage to vehicles covered by your policy due to theft or fire.
  • Comprehensive – In addition to the cover detailed above; a comprehensive road risks policy will also protect you against any accidental damage caused to any of your own vehicles, but also to any customers’ vehicles that are under your care. Plus, if you had an accident while driving a customer’s vehicle for the purpose of your business, the insurer would also cover the cost of the repairs.

Who needs Motor Traders Insurance?

Motor trade insurance is available in several shapes and sizes to meet the needs of any automotive business. Some examples of auto traders who benefit from this type of insurance include tyre and exhaust fitters, MOT stations, service and repair garages, mobile service operators, used car dealerships, valeters, transit companies, window tinting businesses and many others. Motor trade insurance is recommended for anyone who is responsible for customers’ vehicles during their day-to-day operation, in fact, you are legally required to have at least a basic level of motor trade insurance. If you don’t, then you are breaking the law.

I hope you have found this article useful, if you’re interested in free expert advice on your Motor Trade Insurance, please don’t hesitate to give a member of our award-winning team a call on 01743 770 500. We’re here to help all UK motor trade businesses great or small.

Written for our friends at ‘The Garage’, click below to see more.