Motor trade insurance is a complex area to explore without previous insurance experience. This broad term relates to many smaller coverages, each of which protects your business whilst your drivers fulfil their daily work.

As a result, choosing a package that is missing areas that are specific to your business will leave you exposed to risk. Alternatively, opting for packages that include covers irrelevant to your operations will leave you with unnecessary costs. This guide is a start to help you with the essentials of motor trade insurance so you can start your search in the right direction when looking to protect your business financially.

Are Businesses Required to Get Motor Trade Insurance by UK Law?

General vehicle insurance is required by UK law, and this is relevant to the motor element of your business. Still, whilst it is technically optional to acquire insurance for your work as a trader, it is highly recommended as it resolves other insurance obligations.

However, without trade insurance, you are not only exposing your business to significant financial risks from potential claims, but you are also limiting your workplace activities. For example, you’ll only be able to drive a customer vehicle on a third-party basis, which often leads to increased costs. Additionally, there are a number of liabilities that are often included in trade insurance that are required when managing a workplace with employees, such as employers’ liability insurance. This is why we highly recommend investing in a tailored motor trade insurance package that will effectively provide you with these required coverages.

What is Generally Included in Motor Trade Insurance?

Motor trade insurance is a type of insurance that both individuals and businesses in the motor trade will need; while the included elements will vary, there are general covers that you'll find in all packages. Here are some examples of policy covers present in our packages:

Material Damage: This is a standard cover that pays out compensation in the event either your equipment, money or even the vehicle itself is damaged or stolen during a previously insured event.

Road Risks: This covers you when driving customer vehicles or vehicles registered to your business. This is especially useful if your work involves travelling long distances on busy motorways where accidents often happen. The cover can even be broadened to include social, domestic, and events not related to work.

Traders Combined Cover: Whilst not uniquely relevant to motor traders, this cover is excellent for tradesmen in many areas. It acts similarly to other commercial combined insurance and overall motor traders packages, where several essential and complimentary liabilities, such as public liability and employers' liability, are bundled together to reduce management complexity.

Which Businesses Need Motor Trade Insurance?

Essentially, any business that deals with vehicles on a daily basis. Specifically, this insurance is considered an essential policy for anyone who buys and sells, repairs, modifies, services or valet parks vehicles. Here are examples of workplaces and job roles that are relevant to this insurance:

• When servicing and repairs on vehicles take place. Additionally, the work within MOT centres and off-site breakdown recovery agents is also relevant due to their interactions with the businesses or customers' vehicles.
• Vehicle sales, either part-time or full-time, inside car dealerships or after purchase with vehicle collection and delivery agents.
• Any modification work such as tyre fitting, performance modifiers and even restoration works.

The range of activities presented here shows why businesses need tailored insurance packages to create the most efficient coverage possible. For example, a business entirely focused on car washing, detailing, and paint spraying in-house will be able to avoid the required off-site coverages that a breakdown service would need.  

How Much Does Motor Trade Insurance Cost?

Every insurance policy will vary in cost depending on your specific circumstances, and our team will work diligently to source the most financially streamlined with the best coverage. The following are the main factors that will affect the eventual cost of your package:

• What does your business do? The previously discussed idea of choosing covers relevant to your work will certainly influence the costs, with certain covers having either a neutral or negative impact. For example, MOT loss of licence cover and general road driving cover will lead to increased costs as they have a higher risk than others.
• Legal history. Any previous incidents, such as legal convictions, will increase your premiums significantly, especially if those convictions were related to driving.
• Your driver's age. If you employ young people in your business, that will have an impact on your premiums. Younger drivers always face increased premiums regardless of whether they are working for a motor-based trade or not.
• Have you chosen single or combined insurance? Single policies, such as the previously discussed road risk insurance, will have cheaper costs than a combined package. However, the cost of a claim on a solo policy will be significant, whereas a combined choice will help protect your business more comprehensively.

Motor Trade Insurance Brokers

As motor trader insurance brokers, our expert team will ensure that your motor trade insurance offers ease, optimal protection, and flexibility to your business. The final tailored solution will inclusively address a wide range of risks and cover all your employees and yourself as you conduct your daily business. Contact us directly to take advantage of our experienced insurance brokers in Bolton and protect your motor trade today.