Motor Trade Insurance and Private Insurance - What's the Difference?

Motor trade insurance is designed to suit a specific purpose, but there’s often confusion around exactly what it is, who needs it and who doesn’t, why motor traders can’t use private insurance, as well as what a motor trade policy can cover.

In this blog, we’re going to clarify a few of these murky areas, and hopefully clear things up for you.

Understanding Motor Trade Insurance

Motor trade insurance is tailored specifically to those working in the motor trade. That can include any business that works with vehicles in any capacity, whether that’s motor sales, repair, recovery, transportation or any other niche.

In the most basic sense, coverage with a motor trade insurer will allow you to legally drive vehicles on public roads in a work capacity, even if you don’t own them. It’ll protect you in the case that any vehicle you’re driving causes damage to someone else’s property.

Trade motor insurance is a legal requirement for people working in the motor trade, but it also provides you with peace of mind that your hard-won business assets are covered should the worst happen.

Motor Trade Insurance Vs. Private Insurance

Motor trade insurance and private insurance are similar in some ways but are designed for completely different things. They each cover different sets of activities and circumstances and are not interchangeable.

Motor Trade Insurance:

  • Covers you to legally drive a work vehicle
  • Can include public liability insurance
  • Some policies include employer's liability insurance
  • Can protect your vehicle stock
  • Some policies include cover for your building premises
  • Can include trade plate insurance

Private Insurance:

  • Covers you to drive your own vehicle on public roads
  • Can include extras such as legal cover, medical cover, and breakdown services
  • You can choose business cover, but this only covers work appointments, not using a work vehicle such as a van for commercial use

Why Can't Motor Traders Use Private Insurance?

For those in the trade, motor insurance is an absolute necessity, and having the right kind of insurance is just as important. A private insurance policy will cover you to drive your own vehicle on public roads, but in most cases that’s about it. For those working in the vehicle sales, this isn’t enough to protect you – not only will you not be legally protected, but your valuable business assets won’t be covered.

Some of the confusion around private insurance and motor trade insurance is caused by the ability to select a business option when buying private insurance. This will cover you for work appointments, such as visiting a client, but it won’t give you legal coverage to drive a work vehicle such as a van for commercial purposes, and certainly won’t include cover for your business premises, stock or tools.

What Does Trade Motor Insurance Cover?

As a baseline, motor trade insurance will allow you to legally drive your work vehicle on the road for business purposes.  

Aside from this, one of the other key benefits of motor trade insurance is that it can be scaled to any level you need, to include protection for all aspects of your business, and provide you with complete peace of mind.

You can add a huge range of extras to your policy, including:

  • Sales and service indemnity
  • Loss of your MOT licence
  • Cover the costs of engineering inspections
  • Directors' and officers' insurance (to cover any claims made against you)
  • Tool and equipment cover
  • Protection for stock kept at your premises
  • Employer's liability insurance
  • Garage insurance
  • Trade plate cover

With the addition of extra features, you can work with your insurer to build a policy that covers all the aspects of your business, protecting your hard-won progress from unexpected events like theft, vandalism, accidents and extreme weather.

Contact Prime Cover Today to Build Your Motor Trade Insurance Policy

At Prime Cover, we work almost exclusively in the motor trade, and we have more than 40 years of combined experience in building and fulfilling motor trade insurance policies to suit all kinds of businesses and niches all at a competitive price.  

With a motor trade insurance policy from Prime Cover, you can rest easy, knowing your business is protected, and should you ever need to claim, our 24/7 claims line will be there for you.  

Talk to us today to get a free quote based on your needs. You can use our quick form to get a quote in less than 5 minutes, or get in touch with us to discuss any questions you might have.

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