What Are the Different Levels of Motor Trade Insurance?
If you run a business in the motor trade industry – be it a repair garage, car dealership, or even a parts manufacturer – you’re likely to need a motor trade insurance policy. Otherwise, you could run the risk of significant financial loss if anything were to go wrong. So, that’s simple enough, right?
But given the wide variety of businesses that operate within the motor trade industry, actually finding appropriate cover may not be so straightforward. For example, the commercial insurance needs of a car dealership are likely to be very different from an automotive parts manufacturer. With that in mind, it pays to understand the different levels of motor trade insurance available in the UK.
That’s where Higos come in. As specialist motor trade insurance brokers with a wealth of inside knowledge and experience, we’ve put together this handy guide to help you find exactly the cover you need.
Road Risk Insurance
The first type of motor trade insurance we’re going to look at is road risk insurance. This is the most basic level of cover available and is compulsory for any businesses that involve buying, selling, or repairing vehicles. More specifically, it covers the vehicles you drive for trade purposes against theft, damage, and accidents while on the road.
Road risk insurance is typically categories into three levels:
- Third Party Only (TPO): The minimum legal requirement, covering damage to third-party property or injuries to other people caused by your vehicles.
- Third Party, Fire and Theft (TPFT): Includes the same coverage as TPO, with added protection against fire damage or theft of your vehicles.
- Comprehensive: Offers all the benefits of TPFT and also covers damages to your own vehicles, whether you’re at fault or not.
Liability Insurance
Liability insurance is another important component that protects your business from claims made by third parties or employees. There are two main types of liability insurance to look at within a motor trade policy:
- Public Liability Insurance: Protects your business from claims made by members of the public due to injury or damage caused by your business activities.
- Professional Indemnity Insurance: Slightly different to public liability, this protects your business from claims made by clients or customers due to errors, omissions, or negligence in the services provided.
- Employers’ Liability Insurance: A legal requirement if you employ any staff, covering claims by employees injured while at work.
While not exclusive to the motor trade, it’s strongly worth considering liability cover within your motor trade insurance, even if your business only operates on a part time basis. On top of being a legal requirement in many instances, this cover can be particularly valuable if your business frequently interacts with customers or the public, such as garages, MOT centres, or dealerships.
Combined Motor Trade Insurance
For those requiring a more comprehensive solution, combined motor trade insurance encapsulates the cover provided by both road risk and liability insurance, and includes a variety of other protections related to the business premises and operations.
Here’s what combined motor trade insurance can cover:
- Premises Cover: Protects buildings, contents, tools, and machinery against theft, fire, and accidental damage.
- Business Interruption: Covers lost income due to unforeseen interruptions, such as fire or flood.
- Goods in Transit: Protects against loss or damage of vehicles or parts being transported as part of your business operations.
This type of motor trade policy may not be suitable for all businesses, but can be ideal for larger, established companies that operate from a specific location and have significant assets, including vehicle stock.
Additional Coverage Options
As well as the different levels of motor trade insurance discussed above, it’s often beneficial to further tailor your policy with additional covers. For example, these can include:
- Legal Expenses Insurance: Covers legal costs from commercial disputes or employment tribunals.
- Engineering Inspection: Ensures that machinery or equipment is safe to use and compliant with regulations.
- Cyber Risk: Covers financial losses and damages resulting from cyber-attacks or data breaches.
Higos – The Motor Trade Insurance Brokers
At Higos, we understand more than most that no two businesses are ever the same. So, it stands to reason that their insurance coverage isn’t identical either. As specialist motor trade insurance brokers, we get to know the finer details of how each of our clients’ business operate, ensuring they’re receiving the exact cover they need without paying for the cover they don’t.
To learn more about our bespoke motor trade insurance, request a call back today. As a Chartered insurance broker, we work with a wide range of leading insurance providers around the UK. Contact us on 01458 270323 or view our motor trade insurance FAQs if you have any questions.