Policies are tailored to each individual no matter how big or small the business is, so Road Risk insurance can be suitable for people from sole trader mechanics through to large motor dealerships.
What types of cover are available?
There are three main types of Road Risk insurance cover; Comprehensive, Third-Party (TP) and Third-Party, Fire & Theft (TPFT)
Third-Party Insurance
Similar to its private counterpart, Third Party Rod Risk Insurance is the minimum level of cover required by law in the UK. Third Party insurance typically covers damage to others as a result of an accident that’s your fault. However, damage to the vehicle you are driving is not covered by third party car insurance. Nor does it cover theft, or damage caused by fire to your vehicle.
Third-Party, Fire & Theft
Third Party, Fire and Theft offers the same level of cover as Third Party Road Risk Insurance, but as the name suggests also covers damage to your vehicle caused by fire and theft. In the event of a fault accident any third-party injuries, damages and claims will be covered under the Third Party, Fire and Theft Road Risk insurance policy.
Comprehensive
Comprehensive Road Risk Insurance offers a greater level of protection than Third-Party insurance. This type of policy generally covers motorists for accidental damage caused by you or others. It can also cover expenses arising from legal action brought against you following a road accident. Damage by fire or theft, vandalism, windscreen repair or replacement cover, and car stereo theft are also usually covered.
Motor Trade Road Risk vs Combined
Further to choosing between Comprehensive or a form of Third-Party insurance, there is also the option of choosing a Road Risk policy, or a combined policy. A combined policy offers a greater level of protection and offers a higher level of cover.
Road Risk Insurance
Road Risk insurance covers damaged caused to the vehicle(s) only and does not cover any form of business premises. (There are three forms of road risk cover, including; comprehensive, Third-Party and Third-Party, Fire & Theft, see more.) Road Risk Insurance may be more suitable for motor traders trading from a home premises rather than a business premises. This can be great for traders just starting out, or those only trading part-time.
Combined
A Combined cover insurance policy will cover everything a Road Risk insurance policy does, but will also cover the premises you operate from. This means the apparatus required to run your motor trade business can also be covered under a Combined policy, as well as providing Liability insurance.
Who needs Motor Trade insurance?
If you work with vehicles, such as; selling, repairing, modifying, transporting or cleaning vehicles, then you will need Motor Trade insurance. It doesn’t matter whether you operate full-time, or part-time, you will still need to take out a Motor Trade insurance policy.
Examples of business that will need a form of Motor Trade insurance are as follows:
- Vehicle Sales
- Vehicle Mechanics (incl. mobile mechanics)
- Tyre Fitters
- Bodyshop’s
- Valet Services
- Vehicle Recovery
Is Motor Trade insurance a legal requirement?
Vehicle insurance, both private and commercial, is a legal requirement in the UK.
Therefore, whatever aspect of the motor trade you work in, you will need Motor Trade insurance.
The minimum level of cover you need to drive on a UK road is Third Party Only insurance, which covers the cost of damaging another driver’s vehicle in the event of an accident.
Warning message
Why can’t I use my own personal insurance?
Private vehicle insurance is typically designed for social, domestic & pleasure purposes only, as well as commuting to and from one permanent place of work. This is not intended for, and does not include, use as a motor trader. This means that if you are driving a customer’s car, you will be driving it uninsured and you could be charged with, if caught, having no insurance.
In the event you are involved in an accident, your insurer may void your insurance which would then be treated by the police as having no insurance in place.
Even if you only operate as a motor trader on a part-time basis, such as selling cars, you will need insurance, however there is a specialist Motor Trade insurance policy available, this is called Part-Time Motor Trade insurance.
