Haris Ashley
Motor trade insurance is a necessity for anyone who deals with vehicles, including dealers, repairers, and valets. The type of insurance you need will depend on your business type. For example, road risk insurance is a legal requirement for motor traders who drive vehicles they don't own, while product liability insurance is recommended for non-maintenance businesses like car sales. When applying for traders insurance, you'll need to provide proof of your motor trade status, and consider what type of cover you need, including buildings and contents cover, stock cover, and employer liability cover.
| Characteristics | Values |
|---|---|
| Type of Insurance | Motor trade insurance |
| Who is it for? | Motor traders who drive vehicles they don't own, including those in stock |
| Minimum cover by law | Third-party road risk cover |
| Minimum age for cover | Varies between providers, but most won't accept customers under 23 if in servicing or repairing; many set the bar at 25 |
| Trade plates | Badge indicating a vehicle is in use by motor trade, allowing traders to drive without registering for tax; requires roadworthy vehicles |
| Trade licence cost | 6 months (£90.75) or 12 months (£165) |
| Application form | First-time: Form VTL 301; Renewal: Form VTL 318 |
| Proof of insurance | Required |
| Business types | Dealers, makers and repairers of vehicles (including collection and delivery); Trailer makers; Valets and accessory fitters; Testers who work on other people's vehicles on roads |
| Optional cover | Product liability insurance for compensation costs due to injury or property damage from faulty products |
| Mandatory cover | Employer liability insurance to cover compensation claims from employees who fall ill, suffer injury, or damage property due to employment |
| Combined motor trade insurance | Tailored package with single premium and renewal date; covers buildings, vehicle stock, product liability, tools and equipment |
| Vehicle sales cover | Includes demonstration insurance for customers test driving vehicles |
| Carriage of vehicles cover | Required for vehicles towed or moved on a flatbed, or for recovering customer vehicles |
| Payment options | Automated Recurring Payment System for electronic payment withdrawals |
| Availability | Kansas, Missouri, Oklahoma, Arkansas, Indiana |
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What You'll Learn
- Understand the type of cover you need, e.g. road risk insurance, product liability, or vehicle sales cover
- Check the minimum legal requirements, such as third-party road risk cover
- Research providers and compare rates
- Prepare any necessary documentation, such as proof of motor trade insurance
- Consider additional cover options, like combined motor trade insurance for tailored packages
Understand the type of cover you need, e.g. road risk insurance, product liability, or vehicle sales cover
Trader's insurance is a specialised type of business insurance designed to protect various types of traders, including motor traders, retailers, market traders, and financial traders. The type of cover you need will depend on the nature of your business and the specific risks you face.
Motor trade insurance, for example, covers businesses and their employees who drive or work on vehicles, whether they are company-owned or customer vehicles. This includes road risk insurance, which covers motor traders driving vehicles they don't own, and vehicle sales cover, which includes demonstration insurance for customers test-driving vehicles. Motor trade insurance can also include product liability, covering compensation costs for injuries or property damage due to faulty products supplied by your business.
Financial traders, on the other hand, may require professional indemnity insurance to protect against errors, omissions, or legal claims from clients. This includes traders dealing in stocks, forex, commodities, and other financial instruments.
The cost of trader's insurance can vary depending on factors such as the type of vehicles involved, the nature and size of the business, the level of coverage required, the trader's location, and claims history. It is important to assess your insurance needs carefully, review policy terms and conditions, and compare quotes from different providers to find the most suitable and cost-effective coverage.
Additionally, trader's insurance can be tailored to include other types of coverage, such as employers' liability insurance, premises insurance, and public liability insurance. Combined Cover is suitable for larger businesses, as it can cover business premises and equipment, while Road Risk Only is aimed at small businesses or those working from home.
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Check the minimum legal requirements, such as third-party road risk cover
Motor traders must ensure they meet the minimum legal requirements for insurance. The minimum cover a trader must have by law is third-party road risk insurance. This type of insurance covers motor traders who drive vehicles they don't own, including those in stock. It does not cover personal vehicles, family fleets, or other vehicles.
Third-party road risk insurance comes in three levels of cover: third-party only, third-party fire and theft, and comprehensive. Third-party only insurance covers injuries or damage to third-party property or people, but it does not cover the vehicle you are driving. Third-party fire and theft insurance covers everything mentioned in third-party only, but it will also cover fire and theft. Comprehensive insurance covers everything mentioned in third-party fire and theft, but it will also cover any damage to a car you are driving if you have an accident and are found to be at fault.
Traders can also extend their cover to protect their premises, tools, equipment, and business. Combined motor trade insurance is a tailored package that offers custom cover, a single premium, and a single renewal date to ease administration. This type of insurance is suitable for traders with sizeable and more complex trade businesses. It can cover many aspects of a motor trade business, including premises, tools, money on-site, stock, and road risks.
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Research providers and compare rates
Traders insurance is a type of insurance designed for individuals or businesses involved in the motor trade industry. It provides coverage for various risks associated with buying, selling, repairing, or servicing vehicles. When researching providers and comparing rates for traders insurance, there are several factors and considerations to keep in mind.
First, it is essential to understand the specific needs of your business. Traders insurance can be tailored to meet the unique requirements of your enterprise. Assess the level of coverage you require, the types of risks you need to be covered against, and any additional policy features that may be relevant to your business. This assessment will guide you in finding the most suitable and cost-effective coverage.
Next, you should compare quotes from different insurance providers. Online comparison tools, such as those offered by independent businesses like Tiger.co.uk, can be incredibly helpful in this process. These tools allow you to quickly and easily compare quotes from multiple providers side-by-side, increasing your chances of finding the best rates and deals. It is recommended to compare at least four or five pricing options before making a decision.
When comparing rates, pay attention to the different types of coverage included in the policies. Traders insurance typically includes road risks insurance, which covers vehicles used in the motor trade business, and public liability insurance, which protects against claims for bodily injury or property damage by third parties. Other types of coverage to consider are employers' liability insurance (required by law if you have employees), product liability insurance (if you sell or supply products), and business interruption insurance, which compensates for financial losses due to unforeseen events.
While comparing rates, it is also essential to consider the reputation and reliability of the insurance provider. Check for independent reviews and ratings from organizations like AM Best and the Better Business Bureau (BBB). Additionally, look for any complaints filed against the provider and assess their customer service track record.
Lastly, remember that the cost of traders insurance can vary depending on factors such as the type of vehicles involved, the nature and size of your business, the level of coverage required, and your location. Be sure to provide accurate information about your business when obtaining quotes to ensure you receive relevant and competitive rates.
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Prepare any necessary documentation, such as proof of motor trade insurance
Motor trade insurance is designed for businesses involved in buying, selling, repairing, or servicing vehicles. It is important to determine your eligibility and understand your business needs before applying for motor trade insurance.
To apply for traders insurance, you will need to prepare certain documents as proof of your involvement in the motor trade. These documents may include trade licences, invoices, details of your driving history, and information about additional drivers to be covered by the policy.
- Advertising materials, such as online or paper-based advertisements.
- Invoices from auction houses or auction house membership confirmations.
- Business bank account details.
- A copy of your company letterhead and logo.
- Copy of your tax self-assessment form.
- Copies of V5 registration documents.
- Receipts from vehicle sales, including contact details of both parties, date, price, make, model, etc.
- Evidence of business operations, such as documents showing vehicles worked on.
- Details of your business premises, if applicable.
In addition to the above, you will also need to have a full UK driver's licence and be at least 23 years old, although there may be some exceptions to this age requirement. If you are self-employed, you may need to provide business account details, receipts, and proof that your business is operational.
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Consider additional cover options, like combined motor trade insurance for tailored packages
Traders' combined insurance is a valuable option for extra business protection. It is a combination of insurance policies tailored to your business that offers protection to your motor trade business. It brings together multiple levels of cover under a single policy, a single premium, and usually a single renewal date. This insurance is designed for traders working from business premises rather than home.
Traders' combined insurance can be customized to suit a wide range of dealerships and garages, whether working on a full-time or part-time basis. It can include cover for the structure of your buildings, whether you own or lease them. If you are leasing, check with your landlord if they have insurance and on what basis. You can also include cover for specialist diagnostics and repair tools, ramps, lifting tables, paint spray booths, and portable hand tools.
Motor trade combined insurance allows you to pick the covers needed for your business, including road risk cover, which is the minimum level of insurance required for motor traders by law. You need road risk cover to drive vehicles in connection with your motor trade business, such as customer vehicles left with you for repairs or sale. You can get cover on a third-party, third-party fire and theft, or comprehensive basis. You can also add demonstration cover if you want to offer customers test drives.
Other covers available include liability insurance, cover for stock, and business premises protection. Liability insurance covers compensation costs for someone who suffers injury or property damage due to a faulty product supplied by your business. Business premises cover insures the cost of damage to your premises due to fire, flood, or theft.
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Frequently asked questions
Traders insurance is a type of insurance that covers motor traders who drive vehicles they don't own, including those in stock. It can also include demonstration insurance, which covers customers test-driving vehicles, and product liability insurance, which covers compensation costs for injuries or property damage caused by faulty products supplied by your business.
Traders insurance is needed by anyone who drives vehicles they don't own, such as car dealers, repairers, and valets. The minimum age for cover varies, but most providers won't accept customers under the age of 23 or 25.
To apply for traders insurance, you will need to contact an insurance provider that offers this type of coverage. You will likely need to provide proof of your motor trade business, such as a motor trade licence from the DVLA, and information about the type of business you run.
Traders insurance can provide peace of mind and financial protection in case of an accident or incident involving a vehicle you don't own. It can also help you comply with legal requirements, as the minimum third-party road risk cover is mandatory for motor traders. Additionally, some insurance providers offer convenient payment plans and excellent customer service.
