Motor traders insurance, also known as traders insurance, ensures that companies and their employees are covered when working or driving in their clients’ vehicles or those owned by the company.
Usually, the most critical aspect of this sort of cover is its flexibility. If you’re operating a garage, for example, it may be used by any employee—even a new one—to drive any client’s vehicle.
In addition, the policy can protect the business against any unintended damage or other issues that stem from mechanics fixing a vehicle.
Even if your business doesn’t usually drive clients’ cars—if you operate a mobile tyre replacement business, for example—you might need some sort of trade cover.
What’s covered in motor traders insurance?
Motor traders insurance policies are usually customized to the specific requirements of a business, so it’s worth considering what kind of activities and risks you really want to be insured. This will help you avoid any surprises in case your claim is deemed uninsured and therefore rejected. It also ensures that you aren’t paying for insurance you actually don’t need.
Here are some common aspects that are usually covered by motor traders insurance.
If you take cars to the public road, you need to get road risk insurance. This might be true if your employees are delivering vehicles to buyers, or you operate a mechanics service and you have to take vehicles out to inspect faults. If your service doesn’t need vehicles to be taken on highways, you should consider parts-only policy, which is far more basic.
Just like standard motor insurance, you may go for road risk policy which is third party, third party fire & theft, or comprehensive.
Employer’s liability insurance protects your service from claims by your employees—you need this if you’ve got staff no matter if they’re driving or not.
Public liability insurance covers you as well as your staff against claims by members of the public or customers. If you run your business from a building that clients visit, then you must provide them with a safe environment. If a customer trips over and gets hurt, this policy provides cover should he/she decide to seek compensation.
Product liability insurance protects your business if you install a new component in a client’s vehicle, but the component then becomes defective.
Material damage cover covers any equipment or vehicles you own. For instance, if you operate a motor dealership, this means your unsold cars are insured. This insurance can automatically rise in value in the peak registration periods of March and September.
Combined motor traders insurance covers your business for things like road risk and equipment as well as your premises. It can be inexpensive to go for this kind of cover instead of several separate covers, but make sure it insures all of the vital parts of your service to an adequate level.
Extra drivers—for plenty of businesses, it’s vital that their motor traders insurance covers all their employees. But choosing an “any driver” cover could be more costly than restricting cover to only a few employees, or naming insured drivers in the policy.
Vehicle types—if you’re looking for insurance that covers your employees who drive vehicles like HGVs, vans, or cars, it could be far more expensive. Ensure that your policy covers only the vehicles you drive.
Who needs motor traders insurance?
In addition to the types of business mentioned earlier, you may need motor traders insurance if you run a car valeting company, a scrap yard, a repossession company, or a vehicle-restoring business. Generally, if your customers’ vehicles or your own vehicles are under the care, control, or custody of your employees, you’ll need this kind of policy in some form.
Keep in mind as well that it’s not only limited companies that require motor traders insurance. If you have your own business but are still responsible for other folks’ cars, it’s important that you have a proper policy in place.
In some cases, clients’ own policies might cover other drivers, although on a third party basis instead of comprehensive. Even though this has been quite a common theme in the motor insurance industry previously, it’s now highly unlikely to happen. Therefore, it’s vital that motor trade businesses arrange their own sort of cover.