Trade Insurance

Motor Trade Insurance 101: What Is It and Why You Need It

Do you know the difference between motor trade insurance and private car insurance? If you don’t know the answer to that question, then this article is perfect for you.

This article will explain and simplify everything you need to know about motor trade insurance. If you’re already familiar with it and there are still some aspects that you need insights into, this article is also perfect for you.

We know that insurance is a topic that not most people are eager to read on as it can easily get technical. You won’t need to worry though as this article will clearly explain everything in the most simple and direct way possible. After reading this, you’d be able to easily converse with your insurance agent and connect on a whole different level because you’d truly know what you’re talking about.

Motor trade insurance: what is it?

Motor trade insurance is a kind of insurance policy that protects people in the motor trade industry. If you run a business in the motor trade industry, you need a motor trade insurance policy. It doesn’t matter if you own a shop or simply replace tyres, you will need one. Mechanics, motor traders, tyre fitters, valets, MOT centers, and body shops — all need to be covered with motor trade insurance.

Why do you need motor trade insurance?

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You need motor trade insurance because you need to be protected from liability when doing tasks in the regular exercise of your business. A motor trade insurance ensures that you won’t be liable at all if you’d encounter an accident and you’re driving or fixing a customer’s vehicle. It is that special. It can even cover you from liabilities even if you don’t drive other people’s cars.

Motor trade insurance policy will cover you from liability from the following risks:

Road Risk

There is so much risk involved in the motor trade business. A road risk insurance will ensure that you won’t spend a thing should you encounter a mishap or accident while at work and you’re:

  • driving a customer’s vehicle
  • providing repair services
  • selling a car for profit
  • buying a car for profit
  • a valet
  • a mobile tuner
  • a vehicle fitter
  • an MOT operator
  • a garage operator

The law requires that you at least have third-party road risk insurance as it protects people that could suffer from accidents due to your work or service. But where does that leave you? Who protects you? This is why you need road risk insurance. It will cover you and your expenses should you or any of your employees suffer from any injury or damage, and even death while doing tasks in connection to your business. You can also avail of insurance policies that can protect you from third-party fire and theft.


Plans for cover from liability is especially available for the following:

  • motor traders with employees
  • motor traders that engage with guests and customers on their premises
  • car repair shop owners that have guests or customers on their premises
  • car suppliers
  • car service providers

A motor trade insurance with protection from liability provides:

Public liability – you will be safe from liability if any guest or customer will experience an accident or mishap while at your premises.

Sales, product, and service indemnity cover – you will be safe from liability if a customer will suffer from faulty parts or poor service workmanship

Employer’s Liability – you will be safe from liability if any of your employees will encounter a mishap. This policy is required by law.

Combined Risks

This coverage is comprehensive. It protects motor traders from all risks — road risks, premises, liabilities, service, contents, and tools. It even covers motor traders even if they work at home.

Do you need separate motor trade insurance when you already have regular car insurance?

Motor trade insurance brokers will tell you that you do and they’re correct. Regular car insurance can only protect you when you drive your car or someone else’s car. It does not cover you if you drive numerous cars that you own and are owned by your customers. A motor trade insurance policy will remove the need for you to have separate insurance for each and every car that you drive. It will cover all the vehicles you drive in line with your trade. It will also cover your services and the customers on your premises.

Is it okay to not have motor trade insurance?

Not at all. It is a form of self-sabotage if you’d enter the motor trade business and you don’t have a motor trade insurance policy in place to protect you. It is also illegal. The law requires motor trade industry players to be duly insured to protect their customers and employees. Failing to go above and beyond the minimum requirement will expose you to risks that could end up costing so much. To fully protect yourself from any form of liability, you should simply opt to secure a solid motor trade insurance policy. It will ensure that you’d easily bounce back and return to regular business should any mishap, accident, or faulty service arise. You owe it to yourself to secure the future of your business. To do this, you simply have to put a solid motor trade insurance policy in place.

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