Motor trade insurance is a legal requirement when you are in a motor trade businesses. You would have to sign up with a motor trade insurance policy if your business involves having clients’ vehicles under your custody, care or control. These would apply for businesses engaged in auto sales, including both new and pre-owned vehicles. Besides, the very insurance policy would apply to businesses working in vehicle repair, servicing and restoration sector.
In fact, many do not have a clear idea on what trades are exactly covered by a motor trade insurance policy. Here is a list on all of them-
- Business involved in vehicle selling and these even include individual traders running the operations from home
- Vehicle repair centres
- Garages extending MOTs & servicing
- Breakdown & recovery firms
- Scrap yards
- Businesses that are into vehicle delivery
- Collectors & restorers of specialist vehicles
- Firms that are into fitting or/and selling vehicle parts & accessories, such as tyres
- Car valet businesses
- Businesses that are into vehicle repossession
Size doesn’t matter
If your business falls into any one of those categories mentioned above, you should sign up with a motor trade insurance policy. Don’t worry about the business size as such an insurance policy covers both newly founded motor trade start-ups and large established businesses.
Both part time & full time
Whether you are a part time car dealer or a full time one, a motor trade insurance policy is a must when you are into this industry.
Types of covers available with a motor trade insurance policy
Motor trade insurance is a broad term and constitutes of a wide range of covers. Let’s have a look at the various types of covers you can apply for.
This is the most basic motor trade insurance cover which you have to take up when you are into any of the motor trade business. It is the legal minimum requirement to be followed by the motor trade businesses in regards to this particular insurance policy. The 3rd party cover would take care of damage or loss or injury caused by your business to 3rd party vehicles and people. Your own car won’t be covered here but you will get coverage for your passengers. This is the cheapest of all motor trade insurance policies.
3rd party fire & theft
As the name says, this motor trade insurance policy would extend cover for damages caused by fire accidents or theft to any of the vehicles under the control or custody of a motor trader. If you are able to afford little more than the basic insurance cover, this policy is a must-have for you.
Comprehensive motor trade insurance
A comprehensive motor trade insurance policy not only protect the vehicles which are under the custody or control of the motor trader but also his own vehicle, if there is any form of tragic accidental damage. Say, in case, you unfortunately get into an accident while on test drive with your clients car before purchasing it - your insurance provider would cover for the damages caused to the car you crashed on-road and also your client’s car that you were driving.
Employer’s liability insurance
If you are running your motor trading business with an employee or a group of staff, you must get an employer’s liability motor trade insurance. This policy would take care of the compensation in case any of your staff dies or gets himself injured in your business premise or while working with any of your business cars. Added to the basic 3rd party insurance, every motor trader should get the employer’s liability insurance, even if he is not going for the other insurance policies.
Product liability motor trade insurance
This motor trade insurance policy would be valuable for those motor traders who are into car servicing and repair businesses. Besides, those who supply car parts & accessories would also benefit from Product liability motor trade insurance. Such an insurance policy would take care of the compensation in case your client charges you when you have mistakenly fitted a defective part in his car.
Public liability motor trade insurance
What if one of your customers hit himself at your garage premise and sues you? Such accidents are not exactly uncommon and you have public liability motor trade insurance to help you here. In simple words, this insurance policy would save you if anybody visiting your business premise slips, falls and gets injured there.
Combined motor trade insurance
You have it in the name only. A combined motor trade insurance policy would cover all the stuff covered by the other policies mentioned above and some extra. These include cover for damages suffered by your machinery, plants, premises, fittings, fixtures, tools and vehicles sitting at your business premise. Moreover, personal possessions belonging to your customers or employees kept within your premise would be covered by combined motor trade insurance as well.
Qualifying for the insurance policy
When it comes to getting qualified for motor trading insurance policy, you would have to submit documentary proof certifying that your business is operating in motor trade sector. This insurance would apply to businesses engaged in all the major types of vehicles like cars, motorbikes and vans.
There is no dearth of motor trading insurance companies as of now but then not all such names would be suitable for you. There are certain factors that you need to take care of while taking to an insurance provider. First of all, the industry reputation and experience of the company would matter a great deal here. You must check how well your chosen provider is acknowledged in the industry and also what the previous customers have to say about the firm. Besides, it’s better to go for an experienced firm always. It’s because more experienced the provider is, better would be his knowledge about the types of motor trading insurance policies to be needed by a motor trader, based on his typical business needs and budget.