Road Risk Insurance

For your road risk cover to apply, the car that is being driven must be listed on the Motor Insurance Database (MID).

The MID provides a full record of all insured vehicles within the UK and helps the Driver and Vehicle Licensing Agency (DVLA) and the police to enforce motor insurance laws.

If the vehicle you are operating is involved in a car accident and is not listed on the MID, you risk invalidating your road risk cover, which can have serious implications. Your business may not receive the financial support that it expects from its insurer, and you may find it more difficult to secure cover in the future.

When you are in the temporary possession of a vehicle, it’s possible to use trade license plates. This saves businesses in the motor trade industry both time and money because it permits them to drive and look after cars without needing to register or tax those vehicles.

If your business uses trade plates, you should read the terms and conditions of your road risk insurance carefully to check it covers you for driving unregistered and untaxed cars with trade plates.

For traders involved with vehicle sales, demonstration cover is a useful extension for your motor trade policy. Demonstration use permits potential customers to drive vehicles that you have in stock before they make the final decision to purchase them.

Some road risk policies will allow you to bundle in demonstration use, which covers your vehicles when customers test drive cars and vans or test ride motorbikes. This is helpful for vehicles sales businesses, for example, if you run a car showroom, own a used car dealership or specialise in motorcycle sales.

If your business employees staff who may also need to drive customers’ vehicles, you can add them to your road risk policy as named drivers.

For the cheapest possible rates, each named driver should be over the age of 25 with a clean license, good driving history and experience behind the wheel. Insuring named drivers under 25 or with poor driving history can prove to be much more expensive. Your insurance firm will hike their prices if they consider drivers to be higher risk.

Alternatively, you can include road risk cover for any driver. This provides very extensive coverage so that all your staff are insured to drive customers’ vehicles, but this kind of blanket insurance will likely be charged at a much higher price.

Road risk policies generally won’t allow you to drive any car. Instead, road risk insurance only applies to vehicles in your care as a motor trade professional, covering you to drive vehicles:

• listed on your policy and owned by you or your business
• in your care, control or custody for business purposes

Whilst it doesn’t usually include personal vehicles that you own, you might be able to extend your road risk cover to include business vehicles such as mobile mechanic vans, even if you drive these for personal use.