What is Motor Trade Insurance?

Motor trade insurance, also known as traders’ insurance or trade insurance, is a form of insurance created specifically to cater to individuals and businesses operating within the motor trade industry.

Exploring Motor Trade Insurance - Simple Guide

Motor trade insurance differs from standard car insurance in many ways as it is necessary for it to cover a broader range of eventualities, including test drives, vehicle transportation, vehicle stock, public and employer’s liability, and tools. It is also designed to be flexible to cover multiple drivers and multiple vehicles.

At Prime Cover, we have over 40 years of combined experience in the industry and a reputation for sensible, easy-to-understand insurance packages to meet our customers’ needs. Get a quote for no-nonsense insurance advice without the jargon.

When was Motor Trade Insurance Introduced?

The Motor Car Act of 1903 required all motor vehicles to be registered and began the process of regulating vehicles on Britain’s roads. It was the amendments that came about in the Road Traffic Act of 1930 that imposed the legal requirement for third-party insurance for all drivers, ensuring coverage against injuries from accidents and an avenue for compensation.

As the motor industry rapidly grew throughout the 20th century, the need for specific insurance to cover the diverse operations of the trade became apparent and insurance packages were created to cover the business side of the industry, including motor trade public liability insurance to protect companies from claims made by the public for damage to their persons or property, product liability and any resulting legal fees or compensation costs

Do I Need Motor Trade Insurance?

If you are operating a business within the motor trade, regardless of whether you have multiple locations or are a sole trader, you will require motor trade insurance to ensure your assets are covered, and you have protection in place for any persons who are involved in your business on a short-term or long-term basis.

Some of the most common claims against motor trade insurance policies include accidents, theft, vandalism, fire, public injury, defective work, goods in transit and many more. This is why it is imperative to cover yourself and your business, as you never know what is around the corner.

Motor trade insurance is ideal for the following business operations:

  • Car Dealers - This includes businesses that buy and sell new or used cars, motorcycles, lorries, or vans.
  • Garages or Service Stations - Businesses that offer repairs, maintenance, servicing, or MOT testing.
  • Body Shops - Places that specialise in body repairs, paint jobs, or modifications.
  • Tyre and Exhaust Fitters - Businesses that offer specialised services such as tyre replacement or exhaust installation, including mobile services.
  • Trade Plate Holders - Individuals or businesses that often move unregistered vehicles between locations.

And many more, including car importers/exporters, restorers, breakers or salvage dealers, windscreen and glass repairers, car jockeys and audio installers, and customisation shops.

How Much Is Motor Trade Insurance?

Motor trade insurance costs vary significantly based on multiple factors and down to the type of coverage your company may take out. When deciding which insurance is right for you or your company, you need to consider the nature of your business and the value of the stock you handle, the size of the business, the location, and the security measures you have in place to provide additional protection.

Two of the most popular policies are motor trade road risk insurance and motor trade combined. Motor trade road risk insurance is similar to the personal car insurance you are familiar with and is typically offered as Third Party Only, Third Party, Fire and Theft, and Comprehensive cover.

Combined motor trade insurance will include the options of road risk insurance whilst including additional cover for premises, stock, equipment, and tools, business interruption, sales and servicing indemnity, cover for engineering inspections, directors’ and officers’ insurance, loss of MOT license, and more. Combined insurance coverage can include the following:

  • Accidents - Claims arising from collisions or accidents involving vehicles owned by the business or currently in its care.
  • Theft - Claims for vehicles stolen whilst under the care of the business, vehicles stolen owned by the business or tools and equipment stolen from the workshop or showroom.
  • Vandalism - Claims for damage caused by malicious acts.
  • Fire - Damage to premises or stock due to fire.
  • Public Injury - Claims made by members of the public for injuries sustained on the company premises or due to business operations.
  • Defective Work - Claims made against any subpar or faulty repair work.
  • Goods in Transit - Claims for damage or loss of vehicles or parts whilst in transit.
  • Business Interruption - Claims for lost income or increased costs due to an event such as fire, flood or pandemic like COVID-19, which disrupts the business operations.

How To Get Motor Trade Insurance

At Prime Cover, we have extensive experience in the motor trade insurance industry and pride ourselves on ensuring our customers have the coverage right for them. We make everything transparent, so you know exactly what you are paying for and what to do should anything unfortunate occur.

Get in touch with our friendly team to discuss your business and unique insurance needs, and we will help you discover the ideal insurance product for you.

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