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What is a motor trade insurance policy?
Motor trade insurance - or traders’ insurance - is a policy type that covers businesses should they need to drive or work on their clients, or company owned vehicles.
Often, the main reason for this type of policy is due to the flexibility, for example, if you’re running a valet service and a new member of staff joins then you can have them drive a customer's vehicle knowing they’re covered.
Types of motor trade insurance policies
As with standard car insurance, motor trade policies come in three levels of cover – third party, third party, fire & theft, and comprehensive cover. For motor trade insurance, there are typically the following types of policies available.
Road Risk
This policy can cover you to drive any vehicle in your possession, for either personal use or for motor trade purposes. You are also covered for vehicles belonging to your clients, where driving is required to carry out the necessary work.
Motor Trade Combined
By opting for a combined policy, this can also cover your buildings, contents, tools, equipment and money too.
Third party
Third party covers you financially should you cause injury or damage to a third party vehicle. This is the minimal amount of cover required for any vehicle insurance.
Third party, fire and theft
This cover protects you financially from any damage or injury towards a third party vehicle, however, it may also cover you if your vehicle is exposed to fire or theft.
Comprehensive cover
Also known as fully-comp, this level of cover is the best option to have for any vehicle owner as it protects you should an accident cause injury or damage to yourself or a third party. It also covers your vehicle in the event of fire, or theft.
What is covered?
There are a number of add-ons available to new policy holders, the following are examples of factors to look out for when applying for motor trade insurance. It is important to note that not all these will be included in a standard policy so make sure you double check before committing to a policy.
Employers’ liability insurance
This is a must for any business, working with vehicles or not, and covers you and your staff for any claims you might need to make.
Public liability insurance
This covers you and your staff against any claims made by a member of the public, or your customers.
Product liability insurance
If you were to fit a new part to a customer's vehicle and it turns out to be defective, this covers you in the event that you need to claim against the seller.
Material damage cover
This is important to have in place in order to protect your vehicles that are stagnant, or unsold. The cost might increase during peak registration periods in March and September.
Combined motor trade insurance
This could cover your businesses buildings and contents as well as road risk cover. Whilst it is sometimes easier to get all this cover under one policy, it is worth checking if it works out cheaper.
Extra drivers
It is important to operate an all drivers policy if you require all your employees to have access to the vehicles, however, this can add up. By opting for an extra drivers add-on, you can save money and only add named drivers where appropriate.
Vehicle types
If your business requires your staff to drive all manner of vehicles, from cars, and vans to HGVs, it’s likely to be very expensive. So it is important to make sure you have the correct level of cover for each business.
Do I need motor trade insurance?
Vehicle insurance is a legal requirement for anyone using a vehicle. If you are operating a business that uses any sort of fleet of certified vehicles, or you work on, or drive customers cars then you will need third party insurance as a minimum. You should consider using motor trade insurance to save money in the long run.
Types of business suitable for motor trade insurance
In most instances, if you run a business that sees you or your customers’ vehicles come under the ‘care, custody and control’ of your staff, you’ll need this type of cover in some form. Including the business types mentioned above, you will need motor trade insurance for a vehicle-restoring business or a repossession company, too.
The necessity for motor trade insurance does not apply exclusively to limited companies: if you are self-employed but have responsibility for other people's vehicles, you must have the appropriate policy in place.
How to save money on your motor trade insurance policy
Only get the cover you need
If you run a valeting service then it is likely you won’t need cover for HGVs, so make sure you’re not overpaying for unnecessary add-ons.
Provide the correct details
It is important to be transparent with the insurance provider otherwise if you haven’t declared something about your business this could face your claim being rejected.
Add your partner to your policy
Some insurance providers will allow a spouse to be added to a motor trade insurance policy which could save you money over having two separate policies.
Compare quotes with Quidco
When you compare with Quidco, you’ll not only see a range of policies and quotes, you can receive cashback on your quote, too!
Compare cheap motor trade insurance and cashback
By comparing different policies and insurance companies, Quidco Compare can provide cheap motor trade insurance quotes. Simply work out the type of cover you need for your business, then use the comparison tool to get instant quotes and find the ideal motor trade insurance.
Motor Trade Insurance FAQs
What does a motor trade policy cover?
Motor trade insurance covers businesses that operate on and drive their clients' vehicles as well as cars owned by the company. Even if you are not required to drive your customers' vehicles, you will require some type of motor trade insurance to protect you against unintentional damage or other dangers associated with your job.
Can I drive any car on a motor trade policy?
Motor trade policies are designed for business use purposes, therefore, you cannot drive just any car, it would have to be part of the policy.
Can I drive my own car on a traders policy?
Yes, you can drive your own vehicle under a motor trade policy, but you are only eligible for a policy if you sell vehicles for profit. To save money, you could consider putting a partner or spouse under the policy to save paying for two separate policies.
Can anyone get traders insurance?
Trade insurance policies typically only offer cover to traders between the ages of 25 and 74. However there are some exceptions, and with a few select insurers who offer policies to those who are over the age of 23.
Can a part time car body repairs specialist have a trade insurance policy?
Yes, it is advisable that you get motor trade cover even if you operate part time hours.
How do you qualify for motor trade insurance?
To be qualified for a motor trader policy, you must provide documentation that you work in the motor trade. So, if you own a business that deals with cars, vans, or motorcycles and involves repairing or even selling vehicles, you would be eligible for a motor trader coverage.
Does trade insurance cover uninsured cars?
If you own a garage and several of the cars are stagnant and uninsured, a motor trade insurance policy would be able to provide cover for these.
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