Motor Trade Insurance

Obviously if you’re running a motor trade business the law states you need motor trade insurance cover. However, the level of cover you need will depend upon the specific motor business you operate – specialist car trade insurance, motorcycle trade insurance and commercial vehicle insurance, taxi insurance and fleet insurance policies are available from Performance Direct.

Within these specialist motor trade insurance groups there are also different levels of cover.

With a personal car insurance policy the driver and the vehicle being insured is normally detailed in the policy. However, a motor trade policy or car traders policy only names the driver to be insured (not the vehicle) so you are permitted to drive any vehicle as long as it is for motor trade purposes.

So, whether you’re driving your own vehicle, or a customer's that’s in your care, you would be covered.

As with personal car insurance there are three choices of motor trade insurance policy – third party, third party fire and theft and comprehensive.

Third Party – legally this is the minimum insurance requirement to drive a vehicle on the public highway. This type of policy covers damage, loss or injury to third parties i.e. other vehicles and injuries to people but does not cover your own vehicle or you, although your passengers are covered.

Third Party Fire and Theft – in addition to that covered under third party motor trade insurance cover TPF&T pays for damage, theft, fire or loss to vehicles under the motor trader's control or custody.

Comprehensive – in addition to Third Party Fire and Theft, you’re covered for accidental damage to any vehicles that you own or which, as a motor trader, are in your. If, for example, you were driving one of your customer's cars and it was involved in an accident the insurance company would pay for the repairs (less the excess).

Third Party motor trade insurance / car traders insurance policies are also a legal requirement if the motor trader a) runs an MOT centre or garage, b) repairs, services or restores cars, bikes or any other motor vehicle, c) is a vehicle fitter, valet or tuner.

Public Liability – if you operate your business from premises visited by customers you are bound by law to provide a ‘safe environment’ for them. Whether as a result of injury incurred on your premises or due to bad workmanship, Motor trader public liability insurance will indemnity cover against claims of this nature. In addition, you need to be aware of Product Liability cover:

Product Liability – if you’ve fitted a faulty part that failed and led to an accident and your customer sues you, your insurer could, in turn, sue the manufacturer of the faulty part.

Employer's Liability – if you have employees, you must have employer’s liability cover, protecting them while in the workplace.

Like all forms of insurance, the costs of your motor traders insurance cover will depend on a number of factors.

The area from which you operate will obviously be important, as is the number of years no claims bonus you have (both on your private car insurance and, if applicable, your existing motor trade insurance).

Other relevant information for car traders insurance will include; How long have you been in the motor trade, do you work full or part time, do you require cover for your premises, what type of liability insurance do you need, is combined insurance required, or have you had any motoring accidents or motoring convictions? In addition, are there any other named drivers on the policy?

With regard to Road Risk insurance you will need to decide the level of cover required i.e. third party, third party fire and theft or comprehensive and compare the cost of each.

As a guide there are some circumstances that may result in lower premiums on your car traders insurance policies: Older drivers aged between 25 and 65 to 70 having lived in the UK for at least two years with a clean UK driving license and no convictions in the past five years.

Do not have more named drivers on the policy than is necessary as the more there are the higher the premium.

If you can avoid high performance, veteran, classic or vintage cars the motor trade insurance premiums may be lower.

Laid out below is a sample of typical car traders insurance policy wording explaining the different levels of motor trader insurance cover from the respect of the underwriter. This wording is used as an example only, please check you own motor traders insurance policy for the precise wording.

The Motor Vehicle Road Risks Section has the option of four types of cover, which are summarised below; your insurance agent will tell you which level of motor trade insurance cover you have been offered:

In addition to the cover provided by TPO & TPFT, you are also covered for any damage to the Insured Vehicle sustained in an accident or for any damage caused by vandalism. Cover under all indemnities.

In addition to the cover provided by TPO & TPFT, you are also covered for parts and sundries following any damage to the Insured Vehicle sustained in an accident or for any damage caused by vandalism. You will provide or pay for the labour in return for a premium discount. Full Comprehensive cover applies to customers vehicles.Cover under all indemnities (but cover under Indemnity 2 – Damage excludes the cost of labour or the hire of any equipment or plant in respect of any repair)

In addition to the cover provided by TPO, you are also covered for loss or damage to the Insured Vehicle caused by fire, explosion or theft. Cover under all indemnities (but cover under Indemnity 2 – Damage is restricted to loss or damage caused by fire, explosion or theft).

If you are involved in an accident, you are covered for damage you cause to other people’s vehicles or property or for injuries they sustain. Cover under all indemnities (except Indemnity 2 – Damage).