When embarking in the motor trade sector, it’s important to recognise what type of motor trade insurance is needed – as it is all dependent on which area you wish to operate in. The trade of buying and selling cars is usually the most common field, so if this is something you’re considering then you may need Road Risk Insurance.
What is Road Risk?
If you are a car dealer, then it is highly likely that you will be driving not only business-owned vehicles but those of customers; and should an accident occur then you will need relevant insurance coverage to protect both yourself as well as your customers’ interests.
Here are the three different options of Road Risk insurance available:
- Third Party. The absolute minimum level of coverage (as well as the cheapest) legally required for you to drive on UK roads. This type of coverage comprises injury, loss or damage to third parties i.e. vehicles and people. Whilst you would not receive cover for either yourself or your vehicle your passenger would be guaranteed coverage.
- Third Party Fire and Theft. In addition to the Third Party coverage, drivers will also receive coverage for damage or loss from either a theft or fire incident to any vehicles under the custody or control of the motor trader.
- Comprehensive. Combining the two previous features, the comprehensive option covers vehicles either within your custody or your own vehicles should accidental damage be inflicted. So if you were test driving a customer’s car before buying the vehicle and you were held accountable for an accident, then the insurance company would pay out the cost of repairs to both the other car as well as that owned by your customer.
Please note: A Third Party policy will also be needed if the motor trader either repairs/services vehicles, is a valet/mobile fitter or runs their own garage.
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- Employer’s Liability. You are required by law that upon employing a worker, you must have this coverage – which will pay out if there is an injury or death to one of your employees at work.
- Product Liability. Should a product fitted in your customer’s car be faulty and somehow cause damage (e.g. hitting another vehicle as a result of this fault).
- Public Liability. If a customer hurt themselves whilst at your business premises and sued you, then your public liability insurance should serve as adequate protection and offer coverage for you.
Combined Insurance
This coverage entails both the aforementioned three liabilities as well as any damage to fixtures and fittings, machinery, tools, business interruption, employees’ and customers’ personal belongings, theft of money and premises.
