Are you a player in the fast-paced world of the motor trade industry in the UK? If so, you know that protecting your business is crucial. That's where motor trade insurance comes in. It's like a suit of armour for your business, shielding you from the risks and uncertainties that come with running a trade.


Whether you're a car dealer, mechanic, or operate a garage, having the right insurance is essential. But with so many options out there, how do you choose the right one? In this guide, we'll walk you through everything you need to know about motor trade insurance in the UK. From the types of coverage available to the factors you should consider, we've got you covered.


Key takeaways


  • There are two main types of motor trade insurance in the UK: road risk insurance and combined motor trade insurance.
  • Road risk insurance provides coverage for businesses involved in buying, selling, or repairing customers' vehicles, with three levels of coverage available: third-party only, third-party, fire and theft, and comprehensive.
  • Combined motor trade insurance is suitable for motor trade businesses operating from premises and offers comprehensive cover for vehicles, premises, stock, and liabilities.
  • When choosing insurance, it is important to consider cost factors, coverage options, and the extent of liability and property coverage offered.


Types of motor trade insurance

If you work in the motor trade industry in the UK, you'll need to familiarise yourself with the different types of motor trade insurance available to you.


Having the right insurance coverage is crucial to protect your business and ensure its smooth operation. There are various types of motor trade policies to choose from, depending on the specific needs of your business:


  • One type of motor trade cover is called road risk insurance. This type of coverage is essential for businesses involved in buying, selling, or repairing vehicles. It provides protection against accidents, thefts, and damages that may occur on the road.
  • Road risk insurance can be further divided into three levels of coverage: third party only, third party fire and theft, and comprehensive. Each level offers different levels of protection, with comprehensive being the most extensive.
  • Another coverage option for motor trade insurance is combined motor trade insurance. This type of policy is suitable for businesses that operate from premises and require traders combined cover for their vehicles, business premises, stock, and liabilities. It offers comprehensive protection for all aspects of your business in one motor trade policy.


Understanding the different types of motor trade insurance policies available will help you make an informed decision and ensure that your business is adequately protected.


It's important to assess your business needs and choose the coverage options that best suit your requirements.


What sort of businesses does motor trade insurance cover?


Motor trade insurance, also known as traders insurance, is a comprehensive policy designed to protect businesses that operate within the motor trade industry. In essence, it serves a broad spectrum of businesses.


So, what businesses do motor trade cover? The most common businesses that need this type of insurance are car dealerships, which sell cars both new and used.


Other businesses include vehicle repair shops, MOT centres, car valeting services, breakdown recovery firms, and auto electricians.


Even businesses that involve incidental motor trade activities, such as delivery services which require the transportation of goods using commercial vehicles, also fall under the umbrella of motor trade insurance.


It covers businesses that involve vehicle collection and delivery, vehicle repossession services, and those involved in the restoration of classic or vintage cars.


Essentially, if a business involves the handling or custody of customer vehicles, then it is likely to require motor trade insurance.


Factors to consider when choosing insurance


Consider important factors when choosing your motor trade business insurance cover. When it comes to selecting the right insurance for your motor trade business, there are a few key factors to keep in mind.


Here are some cost considerations and coverage options that you should carefully evaluate:


Motor trade insurance cost considerations

  • Premiums: Compare the premiums offered by different insurance providers. Consider not only the initial cost but also any potential increases in the future.
  • Excess: Evaluate the excess associated with the coverage options. A higher excess may result in lower premiums but could also mean greater out-of-pocket expenses in the event of a claim.


Coverage options

  • Liability coverage: Ensure that your insurance policy includes adequate liability coverage to protect your business from potential lawsuits.
  • Property coverage: Evaluate the extent of property coverage offered, including protection for buildings, equipment, and inventory.


Considering these factors will help you make an informed decision when selecting your motor trade insurance.


Remember to carefully review the terms and conditions of each policy and choose coverage that aligns with the specific needs of your business.


Benefits of motor trade insurance


One major benefit of motor trade insurance is that it provides comprehensive coverage for your business vehicles and helps protect against potential financial losses.


This type of insurance offers various coverage options to suit your specific needs, ensuring that you have the right level of protection for your vehicles.


Whether you own a car dealership, a repair shop, or a vehicle rental service, motor trade insurance can help safeguard your business against unforeseen circumstances.


By having motor trade insurance, you can save costs in the long run. Accidents or damages to your business vehicles can be expensive to repair or replace, and without insurance, you'd have to bear these costs on your own.


With motor trade insurance, you can minimise these financial burdens and ensure that your business remains financially stable.


Motor trade insurance often includes additional coverage for other aspects of your business, such as liability insurance for employees or public liability insurance for accidents that may occur on your premises.


This comprehensive coverage not only protects your vehicles but also safeguards your business from potential lawsuits and claims.


How to find an insurance provider


To find an insurance provider for your motor trade business, start by researching reputable companies in the industry. Here are some steps to help you find the right insurance provider:


Insurance provider comparison


Look for companies that offer motor trade insurance. These providers have a better understanding of the unique needs and risks associated with your industry.


Read customer reviews and testimonials to get an idea of the quality of service and claims handling provided by each insurance company.


Insuring multiple vehicles


If your motor trade business involves multiple vehicles, make sure the motor traders insurance provider you choose offers coverage for all the vehicles in your fleet. Some providers may have restrictions or limitations on the number of vehicles they can insure.


Finding an insurance provider for your motor trade business requires careful consideration. By researching reputable companies and comparing their offerings, you can ensure that you're getting the right coverage for your needs.


Remember to read the fine print of the insurance policies and ask questions to clarify any doubts. With the right insurance provider, you can protect your business and have peace of mind while operating in the motor trade industry.


Common mistakes to avoid when getting motor trade insurance


Avoiding common mistakes can help you secure the right motor trade insurance for your business. When it comes to motor trade insurance claims and premiums, there are a few key mistakes that you should avoid to ensure you get the appropriate coverage at a suitable price:


  • Not accurately assessing your insurance needs: It's important to consider the specific risks and liabilities of your motor trade business and choose an insurance policy that adequately covers them. Failing to do so could leave you vulnerable to financial loss in the event of a claim.
  • Failing to disclose relevant information to your insurance provider can have serious consequences: It's important to be honest and transparent about your business operations and any previous claims or convictions. Failure to do so could result in your motor trade policy being invalidated or your claims being denied.




So, when it comes to motor trade insurance in the UK, remember just like a well-oiled engine, a reliable motor trader insurance policy will keep your business running smoothly and protect you from unexpected bumps in the road.


Don't make the mistake of rushing into a decision, take the time to consider all the factors and choose a provider that understands your specific needs.


To get a quote for motor trade insurance or to receive a quote for any of our other insurance products, you can get a motor trade insurance quote through our website. If you would like to talk to one of our insurance team, you can give us a call at 01384429900 to receive more information.