Motor trade
Everything you need to know about motor trade insurance
What motor trade insurance is, who needs it, the main types of cover such as road risk and combined, and the things that affect what a trader pays.
Motor trade insurance has become easier to arrange over the years, but it is still not always easy to understand. Policies vary a great deal, and with different levels of cover and options such as public liability, it can be easy to misunderstand what you are buying. Knowing what you can be protected against helps you choose cover that keeps your business going if something goes wrong.
This guide sets out the basics in plain terms.
What is motor trade insurance?
Motor trade insurance is designed for people who earn a living repairing, selling, buying or otherwise working with vehicles. That includes mechanics, car sales traders and valeters, among many others. In short, it is insurance for anyone who works with vehicles, whatever the size of the business.
People in the motor trade often have access to several vehicles, their own or their customers', and need to drive them to and from their premises or to test them. Motor trade insurance can cover the risks of driving those vehicles as well as the work carried out on them.
Cover is available for full-time traders and, with some insurers, for people who trade part-time. Policies vary in their features and levels of cover, so it pays to choose one that fits how your business actually works.
What can motor trade insurance cover?
Policies are usually tailored to the business. Some cover is a legal requirement, and the rest depends on the risks you want protection against. Generally, the more you include, the higher the premium. The main parts are:
- Road risk: if you take vehicles on the road, for example delivering cars to buyers or testing them for faults, you need road risk cover. This is available as third party only, third party fire and theft, or comprehensive.
- Combined: combines road risk with cover for your premises, tools, equipment and stock. It can be simpler than several separate policies, but check that it covers every part of your business.
- Public liability: covers claims made against you by customers or members of the public for injury or damage.
- Employers' liability: most businesses with employees are required by law to have it. GOV.UK explains the rules on employers' liability insurance.
- Drivers: make sure the policy covers everyone who will drive, whether in your vehicles or your customers'. Naming the drivers is usually cheaper than an any driver policy.
Do I need motor trade insurance?
If you work in the motor trade, for example as a car sales trader, mechanic or valeter, you are likely to need it. Traders policies are also used by garage owners, MOT testers, vehicle recovery operators and body shops. Whether you work from home, a unit or on the road, there are policies designed for that way of working.
Some businesses need motor trade cover without realising it. Depending on the policy, cover can extend to trades such as auto electricians, paint sprayers and sign makers. If you are unsure whether your work counts, you can contact us.
What are the benefits of motor trade insurance?
As well as covering the vehicles you own or work on against fire, theft and accidental damage, a well-tailored policy can protect the wider business, helping you keep trading if something goes wrong.
A combined policy can also mean less admin, with one policy and one renewal date instead of several. And with the right driver cover in place, people driving for your business are insured within the terms of the policy, whether they are using a trade vehicle or returning a customer's car.
How much does motor trade insurance cost?
There is no single price. Many factors affect it, from your trade to the level of cover you need. A mechanic may need quite different cover from a breakdown recovery operator.
How your business runs matters too. A mechanic working from home with no staff will usually pay less than a car sales business with several employees and premises. Location plays a part, and busy urban areas often cost more to insure than towns or villages.
Age and experience also count. Younger traders usually pay more because insurers see less experience as a higher risk, and some insurers set minimum ages. It is still worth looking, as specialist cover is often available.
How do I get motor trade insurance?
With Kompare, you fill in a short form about you and your business, and a specialist motor trade broker from our panel contacts you to talk through quotes. The policy is arranged with that broker. Find out more on our motor trade insurance page and see how we work.