How to Choose the Right Motor Trade Insurance for Your Business
Motor trade insurance is crucial for businesses involved in the buying, selling, or repairing of vehicles. Whether you're operating a repair garage, a parts manufacturer, or running a dealership, having the right insurance is essential to protect your business, employees, and customers.
Understanding the different types of motor trade insurance policies ensures you choose the right level of cover for your specific needs.
Below are the two primary types of motor trade insurance and what they cover:
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Road Risks Insurance
Road Risks insurance is the basic cover for motor traders who only need protection for driving vehicles on public roads. It covers vehicles (both your own and customers’) while being driven or parked on the road but does not provide cover for vehicles stored at your business premises. This policy is available at different levels: Third Party Only (TPO), Third Party Fire and Theft (TPFT), or Comprehensive.
Who needs it?
- Small businesses or part-time traders without a physical business premises, such as mobile mechanics, car valets, or those involved in vehicle sales.
What it covers:
- Driving vehicles on public roads.
- Can cover vehicles on a comprehensive, TPFT, or TPO basis.
What it doesn’t cover:
- Vehicles located at premises occupied or used by the Insured.
- Business premises, tools, and equipment (covered under a combined policy).
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Combined Motor Trade Insurance
Combined Motor Trade insurance offers more comprehensive protection by covering road risks along with additional aspects such as your premises, tools, machinery, stock, and liability risks (such as public liability and employer’s liability). This policy is ideal for businesses with physical premises that require more extensive coverage.
Who needs it?
- Motor traders with premises, such as showrooms, workshops, or garages.
- Businesses needing cover for assets like tools, stock, and machinery, along with road risks.
What it covers:
- Road risks (driving vehicles).
- Premises and contents insurance (for tools, machinery, etc.).
- Stock coverage (vehicles in your possession).
- Public liability and employer’s liability insurance, which is required by law if you employ staff.
What it doesn’t cover:
- Certain high-performance or luxury vehicles (depending on policy exclusions).
Make sure you are covered correctly
By understanding these two primary types of motor trade insurance, you can better select the cover that fits your business. Whether you’re looking for simple road risk cover or a comprehensive combined policy that includes protection for your premises and employees, choosing the right level of insurance ensures that your business is safeguarded against financial losses.
Need expert advice? Contact us today, and our brokers will help assess your risks and recommend the most suitable policy for your business.