Motor trade insurance

Motor trade insurance is a specialised policy designed to protect businesses operating in the automotive industry, such as car dealerships, repair garages, and vehicle traders. This insurance covers the various risks faced by businesses in the motor trade, including damage or loss of customers' vehicles while they are under your care, custody, or control.

It also provides financial protection against liabilities arising from accidents, theft, or other incidents that could lead to costly claims. Whether you're a small garage or a large dealership, motor trade insurance is essential for safeguarding your business and ensuring smooth operations.

Businesses in the motor trade industry that need motor trade insurance include:

• Car dealerships

• Car repair garages 

• Mechanics 

• Valet services 

• Vehicle restorers

• MOT testing stations

Additionally, businesses dealing with the import or export of vehicles and those buying and selling vehicles for a profit should also consider motor trade insurance.

Motor trade insurance can also offer a range of extras, either included in more comprehensive policies or bought as add-ons. These include:

• Goods in transit cover

• Loss or damage to business equipment and machinery

• Loss or damage to a customer’s property stored in the car

• Employers' liability insurance if you face a claim from a member or staff

The cost of motor trade insurance can vary significantly depending on several key factors, including:

• Business size: Larger businesses often pay higher premiums due to the increased level of risk.

• Number of employees: More employees can lead to higher costs, particularly if they drive or work with vehicles.

• Type and number of vehicles: The types of vehicles you deal with (e.g., luxury cars, fleet vehicles) and how many vehicles are typically in use, traded, or worked on will affect your premium.

• Level of coverage: The more comprehensive your coverage, the higher the premium. Additional protection, such as public liability or tools insurance, can increase costs.

• Claims history: A clean record with no previous claims can lower your premium, while a history of claims may increase it.

• Age of policyholder: Younger policyholders, particularly those under 25, often pay more due to perceived higher risk.

To ensure you’re getting the best value for your business, it’s important to compare quotes from different insurance providers, as prices can vary greatly.

If a job requires you to drive vehicles that aren’t yours, it might be a good idea to add a road risks policy to your motor trade insurance. For example, you may need a larger van if you’re a landscape gardener and need to excavate and remove a large brick fish pond.

You can select the level of cover you need so you are covered for the type of risk you might encounter. These are:

• Third party

• Third party, fire and theft

• Comprehensive

Road risks cover is worth considering even if your motor insurance allows you to drive other vehicles. This is because the terms of your insurance will invariably stipulate that the purpose of the journey must be for social or leisure and not for work.