Motor Trade Insurance

An overview of motor trade insurance in the United Kingdom.

What Is Motor Trade Insurance?

When we refer to motor trade insurance, we are generally referring to the specialist aspects of motor traders insurance policies designed specifically to meet the requirements of the motor trade industry - these being the road risks insurance to cater for the motor insurance requirements and the sales and service indemnity cover under the third-party liability sections. Other aspects of motor trade insurance, particularly the motor trade combined insurance contract are very similar to standard commercial combined insurance policies.

What Is Motor Trade Road Risks Insurance?

Road Risks policies are designed to meet the needs of motor traders to ensure that they have adequate motor insurance protection to undertake their business activities in the motor trade.

The standard motor trade road risks insurance policy provides cover for the policyholder, and other specified drivers, in respect of vehicles used by them in connection with their occupation. This allows the policyholder to test vehicles, demonstrate them and move them from one location to another.

In addition to this the standard policy cover provides motor insurance in respect of the policyholder's own vehicles for both business use and for social, domestic and pleasure use.

Whilst this is the standard policy cover it is possible to arrange extensions such as demonstration cover by members of the public and additional drivers. Such extensions will generally increase the premium required by the underwriter.

It is important to note, that motor trade road risks insurance policies do not offer a blanket motor insurance cover for any and all vehicles that the policyholder or any named driver may choose to use. It also does not cover vehicles privately owned by named drivers, including partners and spouses, unless they are named as the policyholder.

In common with other motor insurance contracts, the motor trade policy may be arranged on a third party only, third party fire and theft or comprehensive basis, and the premium payable will reflect the level of cover selected.

Most road risks only policies, arranged on a third party fire and theft or comprehensive basis, contain an indemnity limit that represents the maximum amount payable in respect of loss or damage to vehicles excluding third-party property damage. This indemnity limit should be set to a level that realistically reflects the maximum value of any loss in respect of this "own damage". It is important to note that in the event of a claim the indemnity limit under the policy is reduced by the value of the claim and in order for the cover to be reinstated to the full policy limit and additional premium will be payable. This is subject to the terms and conditions of the policy, where in some cases insurers may offer automatic reinstatement, either with or without the payment of an additional premium.

In common with other motor insurance contracts, road risks policies, are also subject to a policy excess and this may be variable depending upon the driver concerned and the vehicle being driven.

What Is Sales and Service Indemnity?

Sales and service indemnity, also referred to as defective workmanship cover is an optional extension to a public liability all motor trade liability insurance contract. Where the standard public liability policy protects the policyholder in respect of their legal liabilities for injury or damage arising out of their business, it does not cover claims in respect of products and services supplied. In general liability insurance this aspect of cover is referred to as product-liability - in order to cater for the specific needs of the motor trade the specific sales and service indemnity cover offers this protection.

What Is Combined Motor Trade Insurance?

In insurance terms, a motor trade combined insurance is a commercial combined contract tailored to meet the needs of the motor trade industry with the addition of a motor trade road risks cover and sales and service indemnity.

More specific information on combined motor trade insurance is available on the main motor trade combined insurance quotation form that you may access here.

Motor Trade Occupations.

We offer our motor trade insurance quote services to a complete range of motor trade occupations and associated businesses, these include new and used car dealers, mobile mechanics and motor mechanics, car valet services, body repairers and vehicle movement and import specialists. In addition to this we cater for a range of specialist motor trade activities in unusual and specialist markets such as automotive design and racing and rallying teams.