Motor trade insurance can be a complex business – not least because no motor trade business or insurance policy is the same. Yet whether you’re running an MOT station, a valeting service or a repair garage, certain regulations and restrictions are in place for you when you purchase your motor trade insurance policy.
Motor Trade Insurance and the Law
The main rule of motor trade insurance is that if you’re driving your own vehicle or other people’s vehicles as part of your business activity, the law requires you to have it.
However, the law only requires you to have the most basic type of motor trade insurance – a third party only policy. This type of cover can also be known as a road risks policy and provides cover for when the motor trader is driving their own or their customer’s vehicle on a public highway.
It’s a well-known fact that insurers consider younger drivers a higher risk than older drivers and according to the road safety charity Brake, an 18 year old driver is three times more likely to have a road accident than a 48 year old. For that reason, many under 25s may struggle to find motor trade insurance.
However, certain insurance brokers understand that many under 25s are employed in the motor trade industry and require adequate insurance. Motor trade insurance from Unicom includes a special insurance policy called ’22 to 25’ that is tailored to the needs and risks of young drivers. Insurers do have the right to impose certain restrictions – such as limiting the engine capacity or prohibiting young drivers from driving high performance vehicles – but young drivers need not be excluded from a career in the motor trade because they cannot get adequate insurance.
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Named Drivers and Vehicles
A motor trade insurance policy allows any named driver to drive the vehicles that you own or in your possession for the trade; however, if the driver is not registered on the policy, any claim made will be invalid.
That means if you employ a new driver, you must notify your insurance company and get them registered on your policy. It is the employer’s responsibility to make sure all drivers are adequately insured against risks but if they are not named on the policy, they won’t have any protection.
Some policies are more flexible than others, allowing relatives and friends to drive the vehicles, but the best way to check you have sufficient cover is to contact your insurance broker.