How much do you know about motor trade insurance? Do you truly understand what it is and what it stands for? Do you even know if you need one?
If you’re in the motor trade business and you can’t quite answer the previous questions confidently, then you would need to read this article. Securing motor trade insurance is essential in your industry because it will ensure that you enjoy a seamless and hassle-free business day-in and day-out. To know more about it and fully understand what it’s truly all about, this post will discuss the following:
- the definition of a motor trade insurance
- the different kinds of motor trade insurance coverage
- the difference between regular car insurance and a motor trade insurance
- clear illustration of how a motor trade insurance can protect you
- the negative effects of not having motor trade insurance in place
Motor trade insurance is highly important and you need to know essential information about it. This post will help do just that.
But really though, what do people mean when they talk of motor trade insurance?
When people talk of motor trade insurance, they are using an umbrella term that refers to kinds of insurance policies that secure people who work in the motor trade industry from liability. Such people in the motor trade industry include the following:
- vehicle recovery agents
- tyre fitters
- MOT centres
- crash repair
- body shops
- part-time motor traders
- full-time motor traders
- mobile mechanics
All such players face varied risks when working in the industry. Hence, each industry player needs particular policies that can cater to their unique needs. A motor trade insurance can also duly cover businesses that:
- work on customer’s vehicle
- have employees that drive customers’ vehicles
- have employees that drive vehicles that the company owns
It can also cover the following individuals:
- business owners
- members of teams
- all employees who work on a business in the motor trade industry
The Different Types of Cover Available for You
The law mandates all individuals in the motor trade industry to have a motor trade insurance policy that covers at least a minimum level of risk. There are different kinds of motor trade insurance policies for different industry players but each basically offers three different kinds of coverage:
- Liability Motor Trade Insurance
You will need this kind of policy if you:
- own a business in the motor trade insurance
- employ people
- have people on the premises of your shop or store
- have people on the premises of your shop or store during repair
- supply cars
- service cars
You will have to choose from the three different kinds of liability motor trade insurance:
- Public liability – will cover liability in case people get injured or get suck while in the premises of your shop or store
- Product, sales, and service indemnity cover – will cover liability in case of defective workmanship or in case of faulty parts
- Employer’s liability – mandatory for all motor trader who employs at least one or more staff
- Road Risk Insurance
You will need this kind of policy if you are a motor trader and you:
- buy cars for profit
- sells cars for profit
- drive your own vehicle on public roads
- drive your customers’ vehicles on public roads
- provide repair services
- restore cars
- repair cars
- operate a garage
- operate a MOT station
The law requires you to have third-party-only insurance to cover any damage caused by a vehicle connected to your business.
- Combined Motor Trade Insurance
This policy will cover you from all possible liabilities. Motor traders who work at home can also avail of this policy.
Is there a difference between regular car insurance and motor trade insurance?
Yes, regular car insurance can only cover liabilities that may arise when you drive your own car or another person’s car while motor trade insurance can cover liabilities for business owners who own multiple cars and who handle cars owned by customers.
How does motor trade insurance protect you, really?
If you’re a tyre fitter, a motor trade insurance can protect you from all liabilities if anything would happen to your work or the parts that you fit.
If you’re a mechanic, motor trade insurance can protect you from all liabilities if something would happen to a customer’s car while you’re repairing it or test driving it.
If you sell cars, motor trade insurance will protect you from all liabilities in case any damage would occur as you drive or handle multiple vehicles.
What will happen if you choose to not have a motor trade insurance policy?
You will be committing something illegal. You will face a case in court and you can get imprisoned and pay fines and court costs. Your business will also be in trouble as it will be forbidden to continue operating. It will simply be disastrous for everyone involved.
Hence, it’s important that you work with motor trade insurance providers as soon as possible if you’re in the motor trade industry and you still have yet to secure a motor trade insurance policy.