Anyone who is involved in the motor trade in any capacity should consider getting specialist motor trade insurance. This will cover you for many of the risks that all businesses face, along with the unique motor trade risks that many other businesses never have to think about.
What is Motor Trade Insurance?
Motor trade insurance is dedicated cover for professionals involved in the motor trade.
A motor trade insurance package can cover many standard business risks, such as:
- Public and employer’s liability cover
- Premises and contents cover
- Industry-specific risks. For example, road risk insurance can cover you and your staff to drive customers’ vehicles to and from your premises.
Read our full guide to what motor trade insurance is, and what it covers, here.
Who Needs Motor Trade Insurance?
Any business involved in the motor trade sector should consider getting specialist motor trade insurance, including:
- MOT testing centres.
- Car dealerships – whether you are selling new cars or used cars, and whether you run a small independent dealerships or a nationwide franchise.
- Car detailers and valets.
- Auto-electricians.
- Vehicle diagnostic specialists.
- Tyre and exhaust fitters.
Do I Need Motor Trade Insurance?
Yes, you need dedicated cover to protect your business against the unique risks associated with the motor trade.
You have a legal obligation to get some forms of cover:
- Employer’s Liability Insurance: If you employ any staff, you need employer’s liability cover. This will cover your staff for any accidents or injuries they sustain on the job.
- Road Risk Insurance: It is illegal to drive any vehicle on UK roads without at least third party vehicle insurance in place. If you need to move customers’ vehicles as part of your work – whether this is to move them around your premises, or to transport them to and from your premises – then you will need at least third party road risk cover.
- Buildings insurance: You may be required to get some form of premises or buildings cover as part of your leasing agreement.
Beyond this, there is no legal requirement to get any insurance. However, if you do not have appropriate cover in place, then even a small mistake could potentially bring your entire business down.
What Happens If I Do Not Have Motor Trade Insurance?
Think about the following situations:
- Pay out of pocket for legal fees and compensation: A customer is dissatisfied with your work, or a system or component you have worked on subsequently fails. This customer may make a claim against you with allegations of negligence or poor workmanship. Without professional liability cover in place, you would be personally liable to cover all subsequent legal fees and compensation payments.
- Cover loss or damage to tools: Thieves break into your garage in the night and steal or damage your tools and equipment. Contents insurance could cover you for this loss or damage. But without this cover, would you be able to afford repairs or replacements?
- Pay for damage caused by fire or flood: A fire or a flood breaks out at your garage. Would you be able to afford the necessary repairs? And would you be able to survive the loss of income while your garage is closed for the duration of the repairs?
Motor trade insurance could cover you for all of these scenarios, and more. With comprehensive insurance in place, you could rest assured that you will be covered for almost anything, leaving you free to focus on your business.
Specialist Motor Trade Insurance Services From James Hallam
James Hallam is an independent Lloyd’s broker with access to a hand-picked selection of A-rated insurance providers. We can help you understand the unique risks you face as a motor trade business, before helping you get the specialist cover you need at a competitive price.
Get in touch for a free quote today.