What Does Motor Trade Insurance Cover Me For?
The kind of Motor Trade Insurance that is required depends very much upon what area of that business you are operating within. Having established that we can then look at what you are covered for.
If you are involved in the buying and selling of cars for profit, i.e. a car dealer, you should consider Road Risk insurance.
As a car dealer you will no doubt be driving not only vehicles owned by your business but also those of customers so presumably you would wish to ensure that if you were to have an accident that there would be adequate insurance cover in place.
Let us look at the three levels of Road Risk insurance in a little more detail: -
Third Party – you should note that this level of cover is the minimum legally required to allow you to drive on roads in the UK. Cover consists of injury, loss or damage to third parties such as people and vehicles. Cover is not provided for your own vehicle or you but your passenger would have cover. This is the cheapest level of cover.
Third Party Fire Theft – on top of the cover provided by third party insurance you will also be covered for theft, damage, loss or fire to any vehicles that come under the motor trader's custody or control. This is the second most expensive level of cover.
Comprehensive – on top of the afore-mentioned levels of cover this level covers the vehicles that are either under your control or custody or your own vehicles in the event of accidental damage. For example, if you were to test drive a customer's car prior to purchasing it and you were responsible for an accident the insurance company would cover the cost of repairs to not only the other vehicle but also that owned by your customer (less the excess). This is the most expensive level of cover.
A Third Party policy is also required if the motor trader a) repairs, restores or services vehicles, b) runs a garage or MOT centre, c) is a valet, vehicle fitter or mobile tuner.
Employer's Liability – legally, if you employ anyone, you must have this type of cover which will pay out should your employee be unfortunate to be injured or die at work.
Product Liability – let us assume you fitted a new hand-brake cable to a vehicle for a customer and, whilst parked on a hill, the cable snapped, the vehicle rolled down the hill and hit another vehicle. Your customer decided to sue you so you would sue the brake cable manufacturer.
Public Liability – If customers call in person at your business premises and one of them hit their head on a piece of your machinery and sued you for damages your public liability insurance should cover you.
This type of insurance covers you not only for the previously mentioned three liabilities but also for damage to plant, machinery, tools, premises, fixtures and fittings, vehicles kept at your premises, the personal possessions of employees and customers, theft of money and business interruption.
Hopefully you now have a better understanding of what Motor Trade Insurance covers you for.