Frequently Asked Questions

What Is Motor Trade Insurance?

A Motor Trade Insurance policy is also referred to as Road Risk Insurance. It is taken out by someone who runs a business involving anything to do with cars, motorbikes and vans such as buying and selling cars, repairing and servicing, valeting, running a garage or MOT centre etc. The size of your business does not matter or whether you work full or part time cover can be arranged.
Let us look at the types of policies available and what they cover.

Third Party Only

By law, at very least, a Third Party Only policy is required by a motor trader if the trader a) repairs, services or restores vehicles, b) is a vehicle fitter, mobile tuner, or valet c) runs an MOT centre or garage. d) sells and buys vehicles for profit e) drives his/her own vehicle or that of a customer on the public roadway, has any of those vehicles on the business premises or at the customer's or his/her home address.
Any driver who is named on the policy is permitted to drive any vehicles in relation to the motor trade and are covered for damage to the other party's vehicle.

Third Party Fire and Theft

Third Party Fire and Theft covers a trader for all those things mentioned above in Third Party plus also included is cover for the loss or damage to vehicles that are under the motor trader's control or for fire and theft. Any third party injury, damage or claims are also covered.

Comprehensive

On top of the things mentioned above in third party and third party, fire and theft comprehensive cover also includes accidental damage to any vehicles that the motor trader owns or has responsibility for.

Motor Trade Liability Insurance

This includes public liability, employer's liability and sales and service indemnity. With employer's liability the motor trader is indemnified in the event of any employees sustaining an injury. With public liability the motor trader is indemnified due to any injury caused to the public plus loss or damage of property. With sales & service Indemnity the motor trader is indemnified for injury or accidental damage to any property due to the buying or selling of new or used vehicles, the sale or supply of products connected with the motor trade and the alteration, maintenance, inspection, repair, testing, servicing or cleaning of vehicles.

Combined Motor Trade Insurance

Combines insurance covers premises, money, tools, vehicles, liabilities and contents. In addition the motor trader's whole business is protected and it also covers traders who operate their business from home and business premises.

Do I Need Motor Trade Insurance?

The law says you do! If you were a motor trader you would be breaking the law by not bothering to take out Motor Trade Insurance. The type of Motor Trade Insurance you should consider very much depends upon what area of the motor trade business you operate within.

Road Risk

Benefits

With a personal car insurance policy the driver and the vehicle being insured are detailed in the policy. A motor trade policy only mentions the driver to be insured (not the vehicle) so you are permitted to drive any vehicle as long as it is for motor trade purposes. Whether you are driving a vehicle that belongs to you, or a customer's vehicle that is under your control and custody, you would be covered.

Levels of Cover

You now need to make a decision as to what level of Road Risk insurance you want. As with personal car insurance there are three choices- third party, third party fire and theft and comprehensive with the first being the cheapest and the last the most expensive to arrange.
Third Party - legally this is the minimum requirement to drive a vehicle on the public highway. This covers damage, loss or injury to third parties i.e. other vehicles and people but does not cover your own vehicle or yourself although your passengers would be covered.

Third Party Fire and Theft - in addition to what is covered under third party this level of cover pays out for damage, theft, fire or loss to vehicles under the motor trader's control or custody.

Comprehensive - in addition to the above two levels of cover, you are covered for accidental damage to any vehicles that you either have control and custody of or own. If you were driving one of your customer's cars and it was involved in an accident and damaged the insurance company would pay for the repairs (less the excess).
A Third Party policy is also a requirement if the motor trader a) runs an MOT centre or garage, b) repairs, services or restores vehicles, c) is a vehicle fitter, valet or mobile tuner.

Liability Insurance

Public Liability - if you operate your business from premises that customers visit you are obliged to provide a safe environment. If one of them trips over an object and injures themselves this insurance provides cover should they seek compensation as would be the case if the hand-brake was incorrectly adjusted during a service causing the customer to have an accident as this could be covered within the Servicing and Defective Workmanship section of the Public Liability Insurance.

Product Liability - if you fitted a faulty part such as a brake pad that resulted in an accident and your customer subsequently sued you, your insurer could sue the manufacturer of the brake pad.

Employer's Liability - if you employ someone this is a legal requirement and covers you should your employee die or be injured whilst at work.

How Much Does Motor Trade Insurance Cost?

That is one of the first questions, quite naturally, motor traders ask about Motor Trade Insurance!
Unfortunately, it is not an answer that can be provided immediately and the reason for this is because a quotation for this type of cover is tailor-made for each customer. But, don't "hang up", as it will only take a few minutes of your valuable time for you to provide the required information for our partner to provide a quote for your consideration.
Let us give you an idea of the information that will be required so that you can have it to hand to complete the quotation form.
Obviously your personal details such as your name, address, contact details, date of birth, male or female and occupation.
Also, the number of years no claims bonus for both your private car insurance and existing motor trade insurance, how long have you been in the motor trade, do you work full or part time, is premises cover required, what types of liability insurance is required, is combined insurance required, when would you like the policy to start, in the last five years have you had any motoring accidents or motoring convictions, are there to be any other named drivers on the policy-if so the same information will be required for them.
With regard to Road Risk insurance you will need to decide the level of cover required i.e. third party, third party fire and theft or comprehensive and in that respect you may wish to compare the cost of each one. You will find that the cheapest of these three options is third party followed by third party fire and theft with the most expensive being comprehensive.
As a guide these are some of the circumstances that may result in lower premiums: -

• Older drivers aged between 25 and 65 to 70 having lived in the UK for at least two years with a clean UK driving license and no convictions in the past five years.
• Do not have more named drivers on the policy than is necessary as the more there are the higher the premium.
• If you can avoid high performance, veteran, classic or vintage cars the premium may be lower.