Motor Trade Insurance
Anybody who works with vehicles, or sells or deals vehicles, will need motor trade insurance. Motor trade insurance policies tend to cover the driver, not the vehicle, giving the driver greater flexibility and freedom when doing test drives, demonstrations, and moving vehicles on the road and within trading premises.
The first thing an insurer is likely to ask is what type of vehicles you are working with – for example, are they private cars, commercial vehicles, or HGVs? And next, what is the nature of your business, are you involved in selling / dealing vehicles, or in their maintenance, service and repair? It is very important to have a clear picture of your business to give to potential insurers, to make sure you get quotes covering all necessary aspects of your business.
There are various types of policies that a motor trader can opt for. Some cover road risks only; i.e. risks when actually driving the vehicles, and others offer broader coverage.
If you are in the business of vehicle sales, you will need cover that allows you to test drive and demonstrate a number of different vehicles, as well as collect and deliver them, take them to the workshop for repairs if necessary, etc. usually, this is called a ‘road risks’ policy.
There are different levels of cover, from Third Party only – which is the minimum legal requirement and doesn’t cover you in case of fire or theft – to Comprehensive, which has a much broader level of cover for your and other people’s vehicles. Insurers will require quite detailed information about the vehicles registered to you or in your care as part of your business, so check with them how this information is submitted and maintained – you want an easy to use and accessible system.
You should also check whether a policy covers+ Social, Domestic and Pleasure use too (referred to as SD&P by those in the know). If it does, that means you can use your vehicles for driving to and from work, for example, as well as in the course of operating your business. Including SD&P may raise your premium, so think carefully about how you will use your business vehicles.
If you are operating in a showroom, forecourt or garage you must consider premises insurance, which protects your property in case of damage, or theft of, or damage to, the contents of that property, such as machinery, tools, money and personal items.
Finally, there is liability insurance, which goes beyond simply covering damage to or loss of vehicles and property, but also protects you against liability to customers and staff in case or injury or legal grievance.
The law says that if you employ any staff at all, you must have Employer’s Liability Insurance to protect you from compensation claims, should your staff be injured at work. Public Liability Insurance is not required by law, but is strongly recommended as it protects you in case someone is injured on your premises and decides to sue you. And Product Liability Insurance will protect you if a vehicle or part you provide later turns out to be faulty, and causes damage or injury.
Some specialist insurers may offer packages that combine road risks, premises and liability insurance, which are specifically designed for motor traders. It is definitely worthwhile finding out who the best specialist insurers are, and talking through your individual needs with them.