Road risk insurance is available to motor traders to cover both personal vehicles and vehicles in their possession for purposes of trade activity. The cover is only available to those individuals who are self-employed or who operate their own motor trade business either full or part time – for example car dealers, mechanics and anyone owning repair and maintenance businesses. In this blog we look at a number of key policy features and benefits, together with various restrictions.
Most insurers provide various levels of cover, such as comprehensive, third party only or third party, fire and theft. In this way the insurance is identical to standalone personal motor insurance. Typically, the policies cover accidents, legal liability for any injury to passengers or third parties, loss or damage from theft or fire, and accidental or malicious damage. Levels of benefits are of course specific to each individual insurer, and anyone taking out this type of insurance is advised to check the specific benefits, limitations, and terms and conditions closely.
As with other policies, there are ways to lower your road risk insurance premiums. Naturally, your specific occupation, age, driving history, and location will all play a part, but by changing your indemnity level you can make significant savings. Make sure you get the value of your vehicles correct – whether you’re insuring a single car or a fleet of vans, it’s essential not to overestimate their worth. If at all possible, don’t add young drivers (under 25) to the policy, and restrict named drivers to those in your employ – adding family members can unnecessarily raise your premium. Also ensure that the main driver named on the insurance is actually the business owner – trying to get a smaller premium by naming an employee as main driver is not permissible and will almost certainly result in a claim being rejected.
Choosing your level of excess is also important – if you’re comfortable with settling any minor claims yourself, then set the level at £500 or above; this will result in a much lower premium (though of course make sure you are able to cover any potential claims).
To minimise your own risk, it’s sensible to keep the vehicles as safe as possible – keeping new and used vehicles on an unsecured, poorly-lit forecourt for example is asking for trouble, as is keeping a host of keys on public display in a showroom window! Be sensible, and take all necessary measures to ensure your vehicles are protected from theft and any unnecessary damage.
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Also be aware that all vehicles being added to a motor trade policy and subject to acceptance by the insurance company. Prestige, sports or high value vehicles may increase your premium or excess in order for them to be covered by the motor trade policy.
In the event of adding an unacceptable vehicle it will need to be alternatively insured.
A final key point is to note that having the insurance in place does NOT entitle you to drive any vehicle you choose, only those specifically in your possession or ownership for your trade or business – family vehicles are not covered, nor are other vehicles belonging to your employees. But your spouse or common law partner may be able to cover their vehicles if named on the motor trade policy.