Understanding Motor Trade Insurance
Understand what a Motor Trade insurance policy is and who needs one.
Whether it’s your first time getting a Motor Trade insurance policy or your 50th, properly understanding Motor Trade insurance can mean you get the best out of your policy.
What’s The Difference Between Car Insurance and Motor Trade Insurance?
A regular Car insurance policy would only cover you for driving your car, or someone else’s, for private or business use, depending upon the policy and level of cover. In contrast, a Motor Trade insurance policy is designed for traders who work with or own multiple cars, including customer’s cars. Due to the high volume and frequency of vehicle changes in a motor traders’ possession, it would be a lot of hassle to update the insurance company for each car being covered if they only had a car insurance policy!
What Levels Of Cover Are Available For Motor Trade Insurance?
There are two types of Motor Trade insurance available: Road Risk Only and Motor Trade Combined cover. A Road Risk policy is aimed at traders who operate from home and small traders with minimal assets. This can include traders such as mobile mechanics and car salesman who operate from their driveway or run a mobile business.
Three basic levels of cover are available:
Third Party Only (TPO) – Similar to the Car insurance equivalent, this is the most basic level of cover, and only covers the third party if you are involved in a crash that is deemed to be your fault. A Road Risk Third Party Only insurance policy would be the most basic (and the legal minimum) amount of cover available to motor traders.
Third Party, Fire and Theft (TPFT) – This covers the same as TPO above, but also includes fire damage to/theft of your vehicle or a customer’s car – unless you have been involved in a crash that’s your fault.
Comprehensive – This includes all of the benefits of a Third Party, Fire and Theft policy, but you will also be covered for any damage to your car whether it’s your fault or not.
There are some motor traders who may only need a Road Risk insurance policy but want some additional cover in the form of Liability insurance, such as traders who employ an extra person to help with their business – they will need Employers’ Liability cover. Mobile mechanics who operate from home may also find having Product Liability cover useful, to cover them in case any of the parts they fit are faulty and cause damage to a customer’s vehicle as a result.
For motor traders who operate from a specific premises and have customers visiting their place of business, they may want Public Liability cover in addition to their Motor Trade insurance policy. Most motor traders that have a specific business premises will need to take out a Combined Motor Trade insurance policy, as this will cover much more than a Road Risk Only policy, including tools & equipment, stock of vehicles, business interruption, the building itself and more.
To sum up, the more complex your motor trade business is, the more complex your Motor Trade insurance policy will need to be, so that you are properly insured for any scenario, whether that’s damage to a vehicle whilst on the road, or theft of machinery after a break in at your business premises.
Who Needs Motor Trade Insurance?
The ‘motor trade’ is a broad term that can cover a number of professions and businesses – but anyone who works with vehicles as their business may need a Motor Trade policy, whether it’s a Road Risk Motor Trade insurance policy or a Combined Trade Car policy. This can include traders such as:
- Vehicle sales
- Mechanics, including mobile mechanics
- Body shops
- Tyre fitters
- Vehicle recovery services
- Car jockeys
Even if you only operate as a motor trader on a part-time basis, you might still need to take out a Part-Time Motor Trade insurance policy.
How To Get Motor Trade Insurance?
Before choosing a Motor Trade insurance broker, you first need to decide what type of policy would best suit your business. Do you need Road Risk Only or Combined cover, and what Liability products might you need? However, if you aren’t sure then speak to a specialist broker straight away rather than risking it and ending up with a policy that doesn’t cover you for everything you need.
Get A Motor Trade Insurance Quote
If you would like to discuss a Motor Trade insurance quote with a member of the Think Insurance Motor Trade team then you can all us on 0800 221 8077 and one of our Motor Trade insurance experts will be happy to answer any questions. Want to get the ball rolling on a Trade Car insurance policy right away? Then click ‘Get a Quote’ below, leave your details, and we’ll call you back shortly.
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