What Does Motor Trade Insurance Cover?

If your business involves motor vehicles, whether buying and selling or servicing and maintaining them, then you are going to need specialist insurance cover.

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But when it comes to motor trade insurance, it’s important to understand the level of cover that you are buying. The following should help you unravel the different types of cover.

Driving Cover

Trade insurance needs to cover you not just for driving vehicles owned by your business but also those of customers while they are in your care. Other than that, it’s broadly similar to conventional motor insurance in that there are three levels of cover available.

Third party cover is the cheapest available. It is the legal minimum required by law to drive on the road in the UK. However, it only covers loss or damage to third parties – that is vehicles belonging to other people or injuries to other people – but it doesn’t cover damage to your own vehicle or to you.

Third party, fire and theft cover is the next level up. This offers the same level of driving cover as above, but also damage by fire or loss due to theft of vehicles in your care.

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The most common cover from suppliers like is comprehensive insurance. This is the most expensive, but crucially it covers damage to your vehicle – or that owned by your customer – in the event of an accident as well as to third parties.

Liability Cover

As a business you will also need liability insurance. If you employ other people, you will need employee liability so that they are covered for any injuries or accidents at work. You will also need product liability to cover you for any damaged caused by, say, fitting a faulty part to a car. Finally, if customers visit your business premises, you will need public liability insurance to provide cover should they be injured and sue you for damages.

You will, of course, need insurance for your premises and any machinery or tools against theft and fire. It is possible to get combined policies that will cover you for these things and for any vehicles stored on the premises, as well as providing the liability cover discussed above.

Insurance for the motor trade isn’t as simple as it first seems, but hopefully you now understand the basics.

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