How does motor trade insurance work?
Insurance has never been the easiest subject to understand as there are numerous terms and policies to get your head around. This issue is also compounded by the fact that it can be difficult to know who needs to have these policies and when they can be used. These are the reasons why some people struggle with motor trade insurance, wondering why they should get it instead of getting the usual car insurance.
If you are thinking of setting up as a motor trader or you want to start operating as a mobile tyre fitter or valeter, you need to understand the finer points of insurance in this industry. In this article, we will help you understand motor trade insurance a little bit better. We will look at what this insurance is and the different variations, how it works, and who needs it.
What is motor trade insurance?
Motor trade insurance is not a single type of insurance as it covers several types of insurance policies needed by those whose work involves dealing with more than one car, in much the same way as general business insurance is an umbrella term for different types of insurance. The kind of people who need motor trade insurance can include vehicle recovery agents, tyre fitters, mechanics, showrooms, body shops, and MOT centres.
Each of these businesses and others that handle more than one vehicle at a time faces different risks. This means that they all need to find motor trade insurance that fits their specific type of needs and type of business.
Motor trade insurance will cover all the vehicles a company owns as well as those of their customers. It can be tied to the business owner or extended to the rest of the team and anyone else who handles cars on behalf of the business depending on the policy and insurance company. It is designed to protect customers, business owners, and their employees, as well as any vehicles in the care of the business.
Why do you need motor trade insurance?
Motor trade insurance is a legal requirement if you drive customers’ vehicles, and you can get into a lot of trouble for operating a business considered a motor trade one without proper insurance. Second, it gives you the cover you need to operate your business. If something does happen to a customer’s car while it is in your care, you will be held liable, and you could face financial losses and damage to your business’s reputation.
Getting the right insurance
To avoid all these risks, it is better to get motor trade insurance. But how do you go about doing this? You can start by finding insurance companies that provide this type of cover and do your due diligence to see what they are offering.
Sometimes this is a viable solution if you are pressed for time. To simplify the process, it would be advantageous to compare motor trade insurance offered by different brokers and insurance companies. There are reputable platforms that make it easy to compare motor trade insurance. This is the best way to see what numerous insurance companies are offering and see which one offers a tailored solution that would be great for your business.
Types of motor trade insurance
Since this is an umbrella term, there are distinct policies within it.
The first is road risk cover which provides cover if you drive your customers’ cars. It can also cover the vehicles you are transporting. Road risk insurance is essential if you need to drive customer cars or repair or restore cars. All motor traders need to have this insurance in place before they set up a business. This includes everyone from mobile mechanics to car dealers and car valeting businesses.
The second is liability insurance which covers the business if something happens during the provision of its services. Combined cover offers a range of options that are bundled together into one policy. Liability motor insurance usually includes public liability cover, employer’s liability cover for when a business has employees, and product, sales, and indemnity cover.
There is also a product called combined motor insurance, which covers everything. It is a more extensive policy and could be suitable for you whether you operate from a workshop or run a mobile business.
If you are not sure what type of motor trade insurance you need for your business, is it best to discuss your options with an expert. Not having the right insurance cover can be expensive and potentially illegal.
Because it is a legal requirement and could save you a lot of headaches in the future, every business should have motor trade insurance. There are different types of cover available, and you have to find the right broker or insurance company offering exactly what you are looking for.