Motor trade insurance

Motor trade insurance is a specialised policy designed to protect businesses in the automotive industry, including car dealerships, repair garages, MOT centres, vehicle traders, and mobile mechanics. It provides coverage for a range of risks, ensuring your business is financially protected in various scenarios.

Key features:

• Cover for customer vehicles: Protects against damage, loss, or theft of vehicles under your care, custody, or control.

• Road risks insurance: Enables your employees to drive customer vehicles for work purposes, such as test drives or deliveries.

• Liability coverage: Guards against claims related to accidents, injuries, or property damage involving your business.

• Premises and equipment protection: Safeguards tools, machinery, and premises from theft, fire, or other incidents.

Whether you operate a small garage, a part-time vehicle sales business, or a large dealership, motor trade insurance is vital for safeguarding your livelihood, ensuring compliance with legal requirements, and maintaining customer trust.

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.