Motor trade

The importance of motor trade insurance in the UK

Why motor trade insurance matters for UK dealers, mechanics and garages: vehicle cover, road risks, liability, tools and stock, and business interruption.

Motor trade insurance is a key requirement for people and businesses working with vehicles in the UK. Whether you are a motor trader, mechanic or car dealer, or run a garage or repair shop, the right motor trade policy protects your business, the vehicles you handle and your customers. This article explains why it matters.

Protection for vehicles

One of the main reasons for having motor trade insurance is to protect the vehicles in your care. Whether you buy, sell, repair or service vehicles, a motor trade policy can cover your stock and customers' vehicles against theft, damage, fire and accidents, depending on the cover you choose.

Road risks cover

Road risks cover is particularly relevant if you sell, repair or service vehicles. It covers you, and named drivers, when driving customers' vehicles or trade vehicles on public roads for business purposes, such as test drives, collections and deliveries. Any vehicle driven on a public road must be insured, so this cover is central for most traders.

Public liability insurance

Working in the motor trade means dealing with customers, suppliers and the public. Public liability insurance covers claims from third parties for injury or damage to property that happens because of your business. For example, a customer might slip on your premises, or a vehicle might be damaged while it is with you.

Employers' liability insurance

If you employ staff, employers' liability insurance is a legal requirement for most businesses. It covers claims from employees who are injured or become ill because of their work. According to GOV.UK, you must be covered for at least £5 million, and you can be fined £2,500 for every day you are not properly insured.

Tools, equipment and stock cover

Motor trade policies can also cover your tools, diagnostic equipment and stock of parts against theft, loss or damage. Replacing specialist equipment can be expensive, so this helps your business keep running after an incident.

Business interruption cover

Some combined policies include, or offer as an extra, business interruption cover. If an insured event such as a fire or flood stops you trading for a while, this can help make up for lost income while you recover.

Staying within the law

Any vehicle you drive on a public road needs insurance, and employers' liability is compulsory for most employers. Motor trade insurance is how most traders meet these requirements while also protecting their premises, stock and customers.

Conclusion

Motor trade insurance protects the vehicles in your care, covers you on the road and against liability claims, and can protect your tools, stock and income. Choosing cover that matches what your business actually does is the key.

Kompare works with specialist motor trade brokers. You fill in a short form and a specialist, FCA-authorised broker from our panel contacts you about quotes. Find out more about motor trade insurance.