Do I Need Motor Trade Insurance?
The law says you do! If you were a motor trader you would be breaking the law by not bothering to take out Motor Trade Insurance. The type of Motor Trade Insurance you should consider very much depends upon what area of the motor trade business you operate within.
With a personal car insurance policy the driver and the vehicle being insured are detailed in the policy. A motor trade policy only mentions the driver to be insured (not the vehicle) so you are permitted to drive any vehicle as long as it is for motor trade purposes. Whether you are driving a vehicle that belongs to you, or a customer's vehicle that is under your control and custody, you would be covered.
Levels of Cover
You now need to make a decision as to what level of Road Risk insurance you want. As with personal car insurance there are three choices- third party, third party fire and theft and comprehensive with the first being the cheapest and the last the most expensive to arrange.
Third Party – legally this is the minimum requirement to drive a vehicle on the public highway. This covers damage, loss or injury to third parties i.e. other vehicles and people but does not cover your own vehicle or yourself although your passengers would be covered.
Third Party Fire and Theft – in addition to what is covered under third party this level of cover pays out for damage, theft, fire or loss to vehicles under the motor trader's control or custody.
Comprehensive – in addition to the above two levels of cover, you are covered for accidental damage to any vehicles that you either have control and custody of or own. If you were driving one of your customer's cars and it was involved in an accident and damaged the insurance company would pay for the repairs (less the excess).
A Third Party policy is also a requirement if the motor trader a) runs an MOT centre or garage, b) repairs, services or restores vehicles, c) is a vehicle fitter, valet or mobile tuner.
Public Liability – if you operate your business from premises that customers visit you are obliged to provide a safe environment. If one of them trips over an object and injures themselves this insurance provides cover should they seek compensation as would be the case if the hand-brake was incorrectly adjusted during a service causing the customer to have an accident as this could be covered within the Servicing and Defective Workmanship section of the Public Liability Insurance.
Product Liability – if you fitted a faulty part such as a brake pad that resulted in an accident and your customer subsequently sued you, your insurer could sue the manufacturer of the brake pad.
Employer's Liability – if you employ someone this is a legal requirement and covers you should your employee die or be injured whilst at work.
Combined Insurance covers the motor trader for damage to buildings, plant, fixtures and fittings, machinery, tools, vehicles left at the premises, theft of money, customers and employees personal possessions and business interruption plus the above liabilities.
Hopefully the above information will assist you in making your decision as to the most appropriate level of cover.