If you’re planning on starting a business in the motor trade there should be one thing at the top of your checklist…Motor trade insurance!
Any business that involves vehicles, whether it be valeting to car trading, MOT centre to body repair, needs insurance and Motor trade insurance is the umbrella term that covers the many types of coverage you’ll need to purchase. In fact, you are required by law to obtain a motor trade insurance policy if you intend to run a business in the motor trade sector. Your employees and you are protected by motor trade insurance to operate both company-owned vehicles and vehicles driven by clients (courtesy cars as an example). Also included are protections against the hazards specific to your industry, such as those arising from accidents or poor quality workmanship.
Motor trade insurance – Levels of cover explained:
Motor trade insurance covers several different policies. These range from road risk only insurance to liability motor trade insurance, here are all the levels of cover in each variety of policies, and anything else you’ll need to consider before deciding on a policy and provider…
Road risk only insurance
When operating a vehicle for business purposes on public roads and properties, you and your employees are protected by road risk insurance. The car need not be owned by you, but it must be registered in the MID (Motor Insurance Database).
Third-party liability insurance is the most affordable and fundamental policy type. Any vehicle used in the course of business is protected against liability for injuries or property damage.
Third party, fire and theft
In addition to protecting your car in the event of fire or theft, this coverage also covers any damage your business does to another person’s vehicle.
Comprehensive (full cover)
Fully comprehensive road risk insurance is the best bet because it covers everything from accidental damage to fire and theft. In the event of an accident, you can also use it to file a claim for damages.
Liability motor trade insurance
You require liability motor trade insurance if you repair, supply, or service vehicles on the premises and have employees and customers. Employee liability, public liability, product liability, and sales and services liability are all covered by their own policies.
Product liability insurance
If your company installs a defective part into a customer’s car, product liability insurance will cover the costs associated with the resulting complaint.
Sales and services indemnity insurance
Coverage for inadvertent sales of defective vehicles or damage to vehicles as a result of repairs performed by your business or its workers.
Combined motor trade insurance
You can opt to combine all or as many of the elements of the insurance areas above that you need under one policy, but be careful to ensure that it does cover everything and nothing falls through an overlooked gap in cover.
The relevance of motor trade insurance cover
How the cover detailed in this article for motor trade insurance is directly related to your own business…
Buying and selling cars for profit
Having multiple vehicles registered to your MID is possible if you have road risk insurance. As a result, you won’t have to choose between driving and selling vehicles. Make sure your policy covers you during product demonstrations and stock protection, and maybe even think about whether it covers you during vehicle transport theft or damage.
MOT Service and inspection
Verify that operating customer vehicles is covered by your motor trade insurance. This allows you to put them through their paces and drive them to and from the site of your consumers. Consider purchasing sales and service liability insurance to safeguard against the financial fallout of defectively modified or installed components or pricey tools and equipment.
Having a motor trade insurance policy that covers road risk protection and tools and equipment cover is a must whether you run a valeting business or want to start one. Having this coverage ensures that you and your pricey valeting equipment are protected in the event that you are required to drive a customer’s vehicle.
ALWAYS make sure your policy covers public liability if you’re running your business out of a commercial building, and if you have employees, you’ll also need employer’s liability insurance.
How to find affordable motor trade insurance…
The key to finding the most affordable motor trade insurance for your company is to browse around and pay great attention to the small print. Think about and pay attention to the following when chatting with an insurance broker:
- Make sure there are no superfluous add-ons, such as demonstration insurance and carriage insurance, which are useless if you don’t transport cars on the back of trucks or lorries, respectively.
- Reduce the number of vehicles you register on the MID as much as possible because the less vehicles you register, the lower your risk is.
- If your vehicles are kept off the road or in a garage, you’ll be viewed as a smaller risk, which will result in a lower premium.
- Avoid dealing with vintage, heavy-duty, high-performance, or modified automobiles as these are typically more expensive to repair or are more prone to breakdown, increasing the cost of insurance.
- A greater excess means that your insurance will cost less overall if you’re willing to pay more up front in the event of an accident.
- Pay your premium all at once, as is typical for most insurance contracts.
- Build up your no claims bonus; you get one for every year in a row that you don’t file a claim. The longer you have gone without a claim, the smaller your risk is.
- Only hire drivers who have a clean driving record; convictions signal to insurance companies that you pose a higher risk and are therefore more expensive to insure.