Commercial insurance can be quite intimidating to someone with very little or no experience in the sector. Now without a doubt, it is no ball in the park, however seeking professional advice from a broker who can guide you through your policy will make things clearer.
With that being said, in this article, we are going to be taking a look at motor trade insurance and all of the working parts involved.
What is motor trade insurance?
To put it simply, motor trade insurance is a policy that covers someone running a business whose sole purpose is to buy, sell, repair, maintain vehicles or carry out MOT’s.
What makes motor trade policies different from personal, single-vehicle insurance policies is that motor trade insurance can provide coverage for a variety of scenarios unique to motor trade from driving customer vehicles to liability issues when dealing with the public.
Who needs this type of trade insurance?
Regardless of your role within the motor trade industry, if you are a sole trader or a limited company, you will need specialist insurance to protect you on both a personal and professional level. This covers occupations such as:
- Service and repair garages
- Vehicle sales
- Car and motorcycle dealerships
- Breakdown and recovery agents
- Motor electricians
- Body repair shops
- MOT stations
- Mobile mechanics
- Classic bike and car restorers
- Tyre fitters
- Vehicle collection and delivery agents
How does motorcycle motor trade insurance work?
Like many insurance products, motor trade insurance policies offer a level of protection against situations that are likely to impact motor traders.
Trading insurance is designed for professionals who ride on many motorcycles each week and is different in comparison to how singular motorbike policies work, where you have to inform your insurers when you switch bikes.
What is the difference between motorcycle trade insurance and regular motorcycle insurance?
Regular motorcycle insurance does not cover you for riding customer vehicles, even if you have a policy where you are allowed to ride bikes on a third-party basis, this wouldn’t include business cover.
As we mentioned previously, the big difference between motor trade insurance and personal insurance is the fact you do not have to notify your insurers when riding other/customer bikes when you are covered by a motor trade policy.
What does motorcycle trade insurance cover?
What motorcycle trade insurance will cover is dependent on the type of insurance coverage you choose. There are two options typically available, standard and optional.
In this section we’ll be going through what both types of motor trade insurance will cover you for, and the explanation of each section…
Standard motorcycle trade insurance cover
Property damage covers the loss or damage to your property against all insured perils, including both buildings and contents including stock this can also include trade fixtures and fittings including office equipment. Even if you don’t own the property improvements that you as a tenant have made can be insured, for example, mezzanine floors, roller shutters, and office conversions/partitions.
Tools can also be covered at the business premises or in transit and this can also include employees tools.
Covers insured items such as boilers, lifts, air-conditioning against unforeseen or sudden breakdown, explosion, and collapse.
Goods in Transit
Covers your insured property whilst in transit over land or water anywhere within the UK territorial limits, this can include motorcycles, stock or business tools.
- Employers Liability:
Protection against your legal liabilities to pay compensation in respect of an injury sustained by your employees whilst in the course of business.
- Public Liability:
This will protect you against your legal liability for injury to third parties or damage to their property.
- Defective Workmanship/Sales Indemnity:
Providing protection against your legal liability compensation costs & expenses following injury or damage by goods you have sold, supplied, repaired, serviced, tested, or delivered.
Covers any vehicle which is your property or in your custody or control in connection with your business. This can be extended to include additional drivers and also cover sections such as demonstration use, unaccompanied demonstration use and loan vehicles.
Optional Motorcycle Trade insurance cover
Covers any interruption to your business following an insured loss under the Property Damage section of your policy. Whether you suffer a reduced income due to forced closure or increased running costs then this section will compensate you for this. This section can also be extended to cover Loss of MOT Licence which is linked to the test fee income.
Money and Personal Accident Assault
Covers money belonging to the business and also any bodily injury suffered to you or your employees as a result of assault or attempted assault whilst carrying the money.
This section provides cover if you purchase a vehicle from someone who isn’t the true owner.
Covers damage to property and business interruption caused by acts of terrorism.
Covers both statutory and non-statutory inspections of machinery & plant. This can also include ventilation equipment, such as spray booths.
Covers legal costs and expenses for a variety of situations including defence of employment disputes, payment of compensation awards, property disputes, representation for tax investigations and VAT assessments, defence of prosecutions relating to compliance & regulation and legal/tax advice and counselling helplines.
Directors and Officers
Cover that offers financial protection to those who are a director, partner or officer of a company. It covers the cost of claims for compensation made against the insured individual themselves rather than the company.
Cover to offer support and protect your business if it experiences a data breach or is the subject of an attack by a malicious hacker that affects your computer systems.
Key Person Insurance
Protects your business against the financial loss it would suffer following the death, terminal or critical illness of a key person within the company.
Is this insurance required by law?
The short answer is yes, having insurance is a legal requirement by law.
Now let me explain. If you are a business in the motor trade industry, you must have a personal insurance policy as a minimum, however, motor trade insurance isn’t technically legally required.
This being said, if you chose to skip the motor trade insurance, you will not be able to ride/drive your customers' motorbike/vehicle even on a third-party basis. This can consequently lead to some very large payouts in the event that the customer's bike ended up damaged and you would be personally liable for this.
What if you work from home or don’t have premises?
Again, the short answer is yes. Even if you are operating your motor trade business from your own home, it is still very much worth investing in trader insurance.
Even if trading is not your sole source of income, you can still choose to invest in part-time motor trade insurance, which again can protect you to the highest level when handling customers' vehicles.
How much does motor trade insurance cost?
Much like a personal policy, the cost of motor trade insurance can depend on a few factors such as:
● The nature of the business
As you might expect, the trade businesses that involve more road riding will be deemed as a higher risk, which will ultimately increase the cost of your policy.
● Previous experience/ riding experience
The more riding experience you have, typically the lower your insurance should be. This is also dependent on whether or not you have a clean record, and how many years of experience you also have within motor trade.
As expected, younger riders will face higher premiums, please see below for why.
● Type of cover you choose
Whilst this one might be a slightly obvious one, the more add-ons and extras that your policy includes will ultimately mean that your policy will be more expensive. Claim payouts can get expensive, so it is worth considering what cover is best suited to you and your company to protect you the most.
How does it affect younger drivers?
Naturally, younger people will face far higher premiums for motor trade insurance, this is because of the fewer years of riding experience in comparison to older individuals.
The availability of motor trade insurance to younger riders will vary between insurers, so it is worth doing your research and seeing who can and if they can provide the best cover for you.
Check with your insurer
As with all insurance policies, it’s always best to check that of your own insurer as standard coverage may vary between insurance companies.
The information above is based upon a comprehensive motor trade policy, however, it is worth mentioning that there are additional extras that are available to protect both you and your business further.
Looking for motorcycle trade insurance?
So there you have it, here is our full comprehensive guide to motor trade insurance.
If you’re looking for a motor trade policy of your own or for your business, you can get in contact with us by calling us on 01379 646506, or alternatively, you can request a callback by filling out our quick and easy form online.
To get the ball rolling with your motor trade quotation, make sure you can provide your insurers with enough evidence that you do in fact run a business that involves motorbikes, cars, or vans, as well as proving any previous experience you have within the industry.
Once you have compiled this information on your end, our motor trade specialists can help you set up your policy and help you assess any risks that are present.