Businesses that buy and sell motor vehicles, repair garages, scrap car dealers, breakdown recovery companies and smaller businesses such as mobile mechanics, tyre-fitters and valet service all require trade insurance. You might argue that since you don’t own a company or you are a part-timer, you don’t need it; however, if your money-making activity involves driving other people’s cars, the law requires you to have trade insurance.
Motor Insurance Database
Businesses need to understand that having trade insurance without updating the Motor Insurance Database with the details of the cars that need to be covered might end up having any unlisted cars seized.
If you are employed by a motor trader and your duties include driving cars, make sure your name is included in the trade insurance policy of your employer.
If you are just starting out on your own, you might worry about trade insurance costing the earth; however, there are plenty of websites eager to quote you a price, with some offering a discount of up to 50 per cent to motor traders.
What do the insurers look for?
As in private car insurance, companies tend to ask the same kind of questions when you approach them for a motor trade insurance quote. If you have a good driving track record, plenty of no claims discount in your own name on your personal car, no criminal record, no recent traffic convictions and have never been declared bankrupt, you might be surprised by the quote.
Some trade insurance also covers your own vehicle if you use it in your trade; therefore, you could save money by cancelling your private car insurance once the trade insurance is in place.
At the minimum, brokers such as quotemetoday.co.uk/motor-trade-insurance can offer you a road risk only policy with third-party coverage. This is a good place to start; obviously, the more you cover, the higher the premium you pay.
After weighing the cost against your earnings, you might want to play it safe and extend your trade insurance to include fire and theft or comprehensive cover, including public liability (covering injuries to customers within your premises), product liability (covering spare parts, such as the tyres you fit) or a combined policy (covering business premises, interruptions, trade equipment and even employers’ liability if you have employees).