If you work in the motor trade, you need to know about motor trade insurance. It’s a big and complex subject and you need to know your way around it if you’re going to get the best motor trade insurance deal for your business. This guide is here to help.
Read on to get answers to frequently asked questions such as:
If you need to buy motor trade insurance for your business, check out the insurance comparison tool on our site. It will give you quotes for your business from a range of insurers. It’s the quick and easy way to get a great deal for your business.
Let’s start with the basics. Most people simply want to know what motor trade insurance is and how it works.
Motor trade insurance is needed by any business working in the motor trade. At its most basic level it gives your business and your employees the cover you need for your own vehicles or your customers’ vehicles (when the vehicles are in your care) to be road-legal.
Beyond that, each policy is tailored to your business’s requirements so you can get precisely the level of cover you need. For example, if your business is in motor sales you can get cover for the vehicles you sell. If your business involves what is known as the ‘care, custody and control’ of your customers’ vehicles (you are a mechanic, for example), motor trade insurance protects your business and your employees while the vehicle is with you. You can also get cover for the premises you work from and any stock you carry.
It is very easy to say that you need motor trade insurance if you work in the motor trade. Let’s start to break this down and look at it in a little bit more detail.
Essentially, you can divide the motor trade into two parts (note that these two parts sometimes overlap). The size of your business does not matter – you still need motor trade insurance if you work in the motor trade part time. Neither do you need to have premises to have motor trade insurance – you still need cover even if you run your business from home or go to customers’ homes or places of work to carry out the work you do.
The first type of business that needs motor trade insurance is ones that buy, sell or hire vehicles, such as car showrooms, car traders, auction houses, vehicle importers, classic car specialists, scrap and salvage merchants, vehicle repossession businesses and car hire companies.
At its most basic level, your motor trade insurance if you buy, sell or hire vehicles will need to cover the vehicles you are buying and selling and give you and your employees cover when you drive them. We will look in detail in the next section of this guide at the sorts of cover you should be thinking of if you buy, sell or hire vehicles.
The second type of business that needs motor trade insurance is ones that have their customers’ vehicles under what’s called their ‘care, custody and control’. This refers to situations when a customer leaves their vehicle with you or when your business works on your customers’ vehicles. At the point when a customer leaves their vehicle with you it is no longer protected by their insurance, so you need to have your own insurance to cover it instead. As well as protecting the customers’ vehicle, it also covers anyone working on the vehicle or driving it.
Examples of businesses who have customers’ vehicles under their care, custody and control and need motor trade insurance include repair centres, MOT centres, mechanics, mobile repairers such as exhaust, tyre and windscreen fitters, vehicle delivery companies and companies that park customers’ vehicles on their behalf.
When it comes to the types of motor trade insurance out there, understanding what this insurance covers and getting an idea of how it works, the best way to explain it is to divide it into two parts.
The first part is motor trade road risk insurance – the cover you need if you are going to take your vehicles or your customers’ vehicles on the road.
The second part is motor trade liability insurance – the cover you need to protect your vehicles, the vehicles in your care, your premises and your employees.
You can also choose to take out combined motor trade insurance – this combines road risk insurance and liability insurance and provides additional cover too.
Road risk insurance covers your vehicles and your customers’ vehicles when they are on the road under your care. It provides the cover you need in the event of an incident or accident.
If you do not take your customers’ vehicles on the road, you can consider taking out parts only cover. This is a very basic form of cover and you would not legally be covered if you take your customers’ vehicles out on the road.
Like ‘standard’ car insurance, there are three options when it comes to road risk motor trade insurance when you take vehicles onto the road as part of your business:
Let’s look at each of them in a bit more detail.
Third party only is the most basic level of cover that legally allows you to take your vehicles and your customers’ vehicles out on the road.
It is typically the cheapest level of cover you can get if you take your vehicles or your customers; vehicles out on the road.
It is the minimum level of cover you need if you:
With third party cover, your motor trade insurance covers any driver named on your policy to drive any vehicles in relation to your business. In the event of an accident or incident that is your driver’s fault, you are covered for damage to the other party’s vehicle and injury to the other party. It does not cover damage to the vehicle your driver was driving or for injury to your driver. Neither does it cover your vehicles or your customers’ vehicles if they are damaged, involved in a fire, lost or stolen.
Third party fire and theft cover is typically the mid-priced option when it comes to motor trade insurance.
This type of cover gives you third party protection. It also gives you cover if your vehicles or your customers’ vehicles are damaged, involved in a fire, lost or stolen.
Comprehensive is typically the most expensive type of motor trade insurance. It provides all the cover that third party fire and theft gives you. It also covers:
Motor trade liability insurance protects your business against liabilities it may face.
There are three options to consider when it comes to motor trade liability insurance:
Let’s look at each of them in a bit more detail so you can understand what they mean in relation to motor trade insurance.
If you have premises that your customers visit, you should consider public liability insurance. This type of insurance covers you if one of your customers is injured in an accident or incident while they are on your premises.
It can also cover you if one of your customers has an accident or incident that was caused by defective workmanship by you or one of your employees on a vehicle belonging to one of your customers.
If you have one or more employees then employer’s liability is a legal requirement. It covers you and your business if one of your employees is injured or dies whilst at work.
Product liability gives you cover if a part you fit to a customer’s vehicle turns out to be defective and causes an accident or incident as a result. It allows your insurer to sue the manufacturer of the defective part.
Combined motor trade insurance combines road risk insurance and liability insurances. It also provides cover for things such as your premises, your tools and your business. It is the most comprehensive type of motor trade insurance you can get and provides cover for almost every aspect of your business under one policy.
As with all insurance policies there are lots of optional extras you can add to your motor trade insurance cover.
These include legal expenses cover if you decide to take a claim against you to court. You can also add breakdown cover to cover your vehicles and your customers’ vehicles.
It is also useful to know that you can get part-time motor trade insurance policies. These can be useful if you only work part time in the motor trade and only want cover when you do.
The first step to getting motor trade insurance is to check you are eligible for it, these are the criteria you must meet.
Once you know you are eligible, the next step is to get quotes for your motor trade insurance. It’s vital to shop around to make sure you are getting the right level of cover at the right price. You should do this every time you renew your motor trade insurance to make sure you are getting the best deal too.
The easiest way to get quotes for your business is to use the motor trade insurance comparison tool on our website. You simply choose the elements you want to include on your insurance and then you will get quotes for a range of insurers.
Because motor trade insurance policies are so varied, quoting figures is meaningless because the cover your business needs will be very different from the cover someone else’s business needs. However, it is useful to look at the factors that affect the price of motor trade insurance premiums so you can start to understand how this insurance is calculated.
If you sell or work on high performance vehicles or classic vehicles, you can expect to pay a premium on your insurance.
It is generally accepted that the younger you are, the more likely you are to be involved in an accident or incident. Insurers may therefore exclude drivers under 25 from your motor trade insurance policy or charge a higher premium to include them. The same applies to drivers with points on their licence. It is possible to get motor trade insurance if you or your drivers have motoring convictions or points on your licence, but you are likely to have to pay a higher premium for it.
Inner city businesses are likely to face a higher premium for their motor trade insurance than businesses in a rural location. This is because inner city businesses are seen as a bigger risk. In addition, remember the security of your premises. Buildings with better levels of security are likely to enjoy better insurance premiums.
One of the questions we are most often asked is how can you get cheap motor trade insurance. In this section of our guide we will look at the things you can do to reduce your premiums.
The most important thing to do is shop around for your insurance. You can contact each insurer individually, but this will take time you probably don’t have. The best thing to do is use the motor trade insurance comparison tool on our website. You enter details of your business and the cover you need. At the click of a button you’ll get quotes from a range of motor trade insurers who are willing to insure your business. It’s quick, simple and convenient.
Once you know you’re only paying for cover once, and you’re confident you’re going to get a great deal by using the motor trade insurance comparison tool, there are other things you can do to get cheaper insurance for your business.
One of the best ways to save money on your motor trade insurance cover is not to pay for cover that you have already got under other insurance policies you have taken out for your business.
For example, if you already have a separate employer’s liability insurance policy, you may not need to have this included in your motor trade insurance policy, although you should always check that you have got all the cover you need in your insurance policies.
As making sure you’re not paying for cover you don’t need, you should also avoid any added extras. For example, you may not want legal expenses cover, so make sure this isn’t included in the policy. If you only work on cars, don’t pay for cover to work on lorries or trucks. If you don’t work on classic cars, don’t pay for motor trade insurance that includes classic cars in the cover.
Just as in other insurance policies, motor trade insurance policies have excesses. This is the amount you will pay towards the cost of any claim. Generally speaking, the higher the excess you are willing to pay the cheaper your insurance is likely to be.
If your motor trade insurance is going to cover your premises, think about the security measures you have in place. The better the security the lower the risk that your premises will be broken into. This is reflected in the insurance premiums you are likely to have to pay.
When you can show you have got policies in place that encourage better and safer driving from your employees this is likely to give you lower motor trade insurance premiums. For example, you could consider employing drivers with more experience (drivers under 25 are always seen as high risk and this is reflected in the premiums you pay). Similarly, drivers with clean driving licences are seen as lower risk. You could make your drivers responsible for paying the excess on any accident or incident that is their fault to encourage them to be more responsible.
It is generally cheaper to pay for your motor trade insurance in a single lump sum at the start of the policy than it is to pay in monthly instalments.
Now you have got the lowdown on motor trade insurance, it’s time to get the policy that’s right for you. The motor trade comparison insurance tool lets you compare a range of insurance policies on the market that your business may be eligible for