MOTOR TRADE INSURANCE

What is motor trade insurance and who needs it?

Motor trade insurance (also known as trade insurance or traders insurance), is an insurance policy that's taken out by someone who runs a business that involves vehicles.

Simply put, if your business's staff deal with your own vehicles or those belonging to customers, then you're a motor trader and should invest in the correct insurance. Motor traders insurance covers a range of vehicles including cars, trucks, vans, and motorcycles.

There are three main types of motor trade insurance policy.

Road risks policy insurance

If your business involves staff driving trade vehicles or customers' cars or other vehicle types on the road, then you'll need a road risk cover policy. If your staff will be dealing with cars in others ways, but not driving them, then you should consider an insurer that offers more basic cover (like parts-only insurance cover).

There are three options when it comes to this type of policy:

Third-party only insurance:
This is the cheapest and most basic type of insurance. Motor trade broker companies, repair services, and car traders can benefit from this type of policy. If an accident occurs and your driver is at fault, you'll be fully covered for any damage to the customer's vehicle.

Third-party fire and theft insurance:
Offers the same protection as basic third party insurance, and provides cover in the event the car or other vehicle types are damaged in a fire or stolen.

Fully comprehensive policy:
This type of cover is typically the most expensive option, while also being the safest. The insurer will payout in case of any damage to your car or that of your customer, no matter who is at fault.

Liability insurance

Liability insurance provides protection for any work carried out on a business-owned or commercial vehicle within your trade premises.

The three main categories are for:

Employers insurance:
Provides cover for you and your business if one of your employees have an accident at work that results in injury or death.

Traders products, sales, and service indemnity insurance:
This provides cover if any problems or faults are discovered after a vehicle has been sold or serviced.

Public:
Insurance that covers public liability will ensure that you're protected if something should happen to a customer or client when they're on your premises, if they're injured, for example. It also covers you in the event of defective workmanship completed by one of your employees injures a customer.

Combined motor trade cover

Combines road risks insurance with liability insurance in a single comprehensive policy. This type of policy can be tailored to provide you with complete control over the type of cover you choose. Combined motor trade cover policies are typically the most expensive —yet safest— option.

Which businesses does motor trade insurance cover?

Motor trade insurance covers a wide range of business types. From businesses operating in vehicle repair to vehicle sales to vehicle repossession—motor trade insurance is a must.

Typically, we can divide motor traders into two categories:

Buying, hiring, or selling vehicles

Auction houses, car and van hire companies, showrooms, vehicle dealers and traders, car brokers, valet services, car importers, vehicle repossession services, and more.

Care, custody and control

Garages, car jockeys, car part and tyre fitters, mechanics (and mobile mechanics), car detailers, valet services, MOT centres, and more.

If you're struggling to understand whether your business is classified as a motor trade business, ask yourself whether or not your or your clients' vehicles are put under the "care, custody, and control" of your employees. If the answer is yes, then you'll need a motor trade insurance policy.

As trader's insurance covers a diverse range of services, it's crucial that the policy you choose is tailored to your business requirements. The coverage provided by different policies all depends on the particular risks that your company faces.

Remember that motor insurance doesn't only apply to limited companies, they also apply to self-employed people who take responsibility for customer vehicles such as mobile mechanics.

Decided motor trade insurance is for you? If you want to ensure you have the cover you need in case of damage to a vehicle in your care, you'll be glad to know that getting a quote is simple with Utility Saving Expert. All you need to do is fill out an insurance quote form—we'll do the rest.

Utility Saving Expert compares the UK's leading motor trade insurance providers to provide you with a range of competitive policy prices to help you make an informed decision.

How to keep down the cost of your motor trade insurance policy

Like most types of insurance, the cost varies depending on a number of factors. Here are some things to consider that'll help ensure the cost of your policy is affordable.

Only pay for what you need

As you increase the number of drivers on your motor trade policy, your premium will also increase.

Regular car insurance allows you to have multiple drivers covered under the same policy, but only one person will be driving the car at a time. In comparison, motor trade policies cover multiple drivers on the road at the same time in different cars.

In addition to the number of drivers you cover, it's also important to consider which risks you need to cover. It's a good idea to talk to a motor trade specialist to ensure you're covered in all the right places—without attracting higher premiums.

Increase your car's security

Increasing the security measures on your vehicles and premises is a great way to lower motor trader insurance premiums.

Thieves know how to decipher which cars are easy targets. Consider installing CCTV or storing the vehicle in a garage or gated area. Motor traders might also consider installing floodlighting and burglar alarms on your business's premises to deter thieves from targeting your vehicles.

Providing evidence of these security measures tell the insurance provider that you're taking the necessary precautions, resulting in lower premiums on your trader's insurance.

Employ experienced drivers

Drivers under the age of 25 are statistically more likely to be involved in accidents than older drivers. For this reason, traders insurance for under 25s comes with higher premiums.

An effective way to reduce the cost of your motor trader insurance is to employ drivers with experience and a great track record. When choosing candidates do a thorough background check and ensure they don't have any previous convictions.

Limit the number of cars you use

The more vehicles you have coming and going through your business, the greater the risk might be to insurers, particularly where sales are concerned. We’re not suggesting you shouldn’t run a successful business, but equally any good business should be efficient, so make sure that whatever vehicles you are insuring is likely to make you money and – from an insurance point of view – keep your stock levels manageable. Just make sure you have enough cover for the vehicles you’re working with.