Export opens up a global market for the motor trade industry, involving international sales at a considerable scale, and the automotive industry accounts for around 14% of the UK's exported goods.
Before expanding your business through exporting, it's critical to assess the risks your business could face and ensure you have appropriate insurance cover to protect against them.
If your business involves export, that means you sell a product or service to a buyer abroad. Risks from exporting could involve loss or damage to goods, such as a lost shipment or damaged cargo. Other risks include unintentionally transporting faulty goods, non-payment from your customers, and other unforeseen events.
Designed to protect exporters from the risks that come with shipping cars abroad, car export cover is a type of motor trade insurance. Sometimes called freight insurance, cargo insurance, or import-export insurance, exporting policies will protect your business if something goes wrong.
This includes potential financial losses from vehicles that are damaged or stolen, legal fees if a claim is made against you, and compensation charges.
If you don't have export insurance in place but something goes wrong, these costs will still need to be paid and you'd be expected to cover them yourself.
Rather than one single type of insurance that is the same for each business customer, export cover combines several types of insurance.
Not all exporters will require identical insurance, and you can tailor your export policy by adding layers of coverage to perfectly match your specific business needs.
Car export policies can include insurance coverage such as:
Going hand in hand with car export insurance, export credit insurance may also be useful for you if you export products to foreign buyers.
Export credit insurance reduces the risks of doing business internationally by providing financial coverage if the buyer is unable to pay, and for commercial risks such as bankruptcy of the buyer, or political risks such as war that could result in non-payment. It also covers issues with currency or export regulations.
It's important to tailor your car export insurance to reflect what your business needs. Whilst much of the insurance cover is essential from a business perspective, most is optional from a legal perspective.
That is, with two mandatory exceptions:
Finally, you'll need to consider the sum insured. This is sometimes referred to as the indemnity level, and it refers to the maximum amount of money you could claim on your insurance policy.
Standard indemnity levels are often set by insurance providers. For example, public liability is usually £10 million. You can request for levels to be increased if you feel this is important for your business, but this may be reflected in higher premiums.
Car exports carry a considerable amount of risks. These are high-ticket items, and although insurance policies can protect you financially if something goes wrong, it's important to know what limits or exclusions may be in place.
Check you understand your terms and conditions before you take out exporting insurance, so you can be sure your business will not face any unwelcome surprises. For example:
The UK is the world's 10th largest goods exporter, but without the automobile sector, it would likely fall to 14th place. Uncertainties and changes due to the likes of Brexit can have billions of pounds worth of impact on export.
More than half of the UK-built vehicle exports go to customers within the European Union, making the EU the UK's biggest trading partner. Changes to regulations, higher tariffs and disrupted supply chains are all risk factors. This makes the importance of taking out car export insurance even more important for UK businesses.
The price you are quoted for your export insurance will depend on a variety of factors.
Your export business must take out sufficient insurance coverage, but you can be sensible about how much cover your business needs so that you are not overcharged.
The amount you pay will depend on the types of coverage you selected for your insurance bundle, as well as other circumstances.
You can encourage lower costs for your vehicle export insurance by:
The best way to reduce the price you pay for insurance is to compare quotes from a wide range of providers.
Use Utility Saving Expert's free online comparison tool to find the cheapest prices, the most extensive coverage and the best value for money.
Search through competitive quotes, review company information and customer ratings for each insurance firm, and take out a new policy with a reliable provider to protect and cover your car export business.