Motor trade insurance is essential cover for those who operate an automotive business, including dealers and mechanics. It provides protection for company drivers to operate customer vehicles, for example, driving around the business premises, road testing, and driving vehicles being bought and sold.
It covers UK-based businesses and is available for both large and small businesses, whether operating full or part time. It only provides protection for vehicles that are being operated in connection with the automotive industry.
As with personal vehicle cover, there are different types of policies, varying in their premiums and the level of cover and features they offer. Each business has its own budget and needs, so choosing the right policy and getting more than one quote is important.
There are two basic minimum legal requirements when it comes to industry cover. Owners must take out Third Party Only (TPO) cover as a minimum to drive company and customer vehicles on a public road. Owners must also have Employers’ Liability (EL) if anyone else is employed by the company, even if they are only employed on a casual or part time basis.
These are the minimum requirements, but in reality most businesses will opt for a higher level of cover. When it comes to Road Risk, Third Party Fire and Theft cover provides a higher level of cover, also protecting against damage incurred as a result of fire or theft to vehicles. Comprehensive cover is the highest level of cover, also protecting the business against accidental damage.
The other three types of liability cover are Product, Sales and Services Indemnity, protection against defective workmanship, and Public Liability. Combined policies include both Road Risk and Liability cover, and can be tailored to suit the individual business’s requirements. Additional features include higher level of vehicle use for all named drivers, flexible payment options and secondary occupation cover for those using a car or van for another business.
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Certain requirements must be met before someone can qualify for motor trade insurance. An applicant must have held a full UK or European driving licence for at least twelve months. In addition, providers may have their own minimum criteria. Many operate higher age limits, for example with minimum age limits of 22, and some also have upper age limits. They may also exclude certain geographical regions, so it is important to check the policy criteria.