7 September 2021

How does motor trade insurance work?

By Ben Rose Sales Director

All business processes are as unique as the products they sell. Motor trade insurance is a type of policy that’s designed specially for the auto trade industry to offer traders coverage for the risks that are unique to their business.

The term ‘motor trade’ refers to the business of selling, servicing, recycling or working on mоtоr vehicles of all kinds, including:

  • Trucks
  • Cars
  • Motorcycles
  • Exotic or luxury cars

That’s not all. Under some definitions, a motor trade policy can even cover earth-moving and heavy equipment.

All the cover you need in just one policy

As a rule, businesses need several different types of insurance, for example, buildings insurance, contents insurance, employees, machinery and equipment, and cover for any vehicles they run, etc. Sometimes business owners think they need to approach lots of different insurance providers for each individual cover – but this isn’t the case.

Motor trade insurance covers you for everything you need under one consolidated plan, giving you the right protection without heaps of paperwork. You can choose and customise the plan to suit your business needs and budget, so you can make sure the most probable risk factors are covered first and then select any extra covers you may want for extra peace of mind. This also means you can choose only the cover you need, so you don’t end up paying for pointless extras – saving you money.

As a trader, you can choose from an extensive list of optional covers to pick and choose what you want on your policy. A good broker (like us) will help you with this.

Types of motor trader insurance policies

Basic trade coverage for cоmраniеѕ

You’ve got a range of options when it comes to insuring cars that need trade company insurance. Road Risk is the standard motor trade policy, which you can take out as third party only, third party, fire and theft, or comprehensive. The first kind will cover injuries, damage to property and death from a vehicle related to your business. The second will cover the same, as well as any damage to your vehicles from fire or theft and the last is the broadest type of protection and covers all of the above, plus accidents, whether or not it’s your fault.

Liability policies

There are different sorts of liability policies, which you can choose depending on how you run your business. If the general public is allowed onto your business premises then you will need Public Liability cover in case they have an accident or hurt themselves on-site and hold you responsible. You can also get Employers’ Liability, which protects you against claims from your staff, plus liability cover for your tools and equipment, faulty workmanship, and sales and service protection.

Combined coverage policy

The most comprehensive policy is a Trader Combined insurance plan. This covers anything you might have to do with the motor trade industry, including any losses at your place of business or at your home. It’s the ideal policy if you want to make sure there are no gaps in your coverage.

How do you choose your motor trade policy?

Depending on your type of business, the kind of policy you need will vary. Your best bet is to get in touch with a specialist motor trade insurance company so they can talk you through all the covers available to you and how they apply to your type of trade. This should give you all the information you need to make a decision. At DNA, our team are always happy to advise you on the kinds of cover you need, and there’s no pressure to buy anything you don’t want to.

How do you find the right provider?

You may find that some motor trade insurers have certain requirements that you must meet before they will even issue a policy, for example policyholders may need to be over the age of 21 and have held their driving license for at least a year. This could be tricky if you’re starting out as a young mechanic or trader, so it’s worth ringing around different specialists to find out the type of cover they offer. Some providers (like us) will be able to help trickier customers, such as drivers under the age of 21 or those with a conviction in your past. It just means your premium might be slightly higher.

If you compare quotes, remember that sometimes the cheapest quotes aren’t necessarily the best for your business. You should always make sure you’re getting the cover that’s right for your company’s needs from a provider with a proven reputation and excellent service. When looking for providers, make sure you read reviews to see what kind of service they offer.

Once you’ve chosen your provider, you need to give them all the details of your business so they can make sure you’re insured properly. Like all insurance policies, it’s vital that you give correct and accurate information at all times as anything that you get wrong or withhold may invalidate your policy, meaning you can’t claim.

Likewise, if anything changes with you and your business during the duration of your cover, you should always tell your insurer as soon as you can to make sure your policy remains valid. This will give you the peace of mind that your business is protected so you can focus on running it.