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Summary of Motor Trade Insurance As a class of insurance motor trade insurance is the Insurance Market's answer to the specific needs of motor traders, persons and companies involved in the motor trade, where the restrictions in cover under standard private and commercial motor insurance policies do not allow the efficient operation of the business. The types of motor traders or businesses that may benefit from this insurance range from the "one man bands" to much larger organisations employing hundreds of people. The business operations will include, - new and used vehicle sales, service engineers, repairers - both mechanical and bodywork, windscreen replacement firms, tow bar fitters, security and car audio installers, car jockeys, electrical engineers, Body and coach builders, vehicle finance agents, vehicle importers, vehicle inspector and organisations involved in the service and repair of their own vehicles, motor vehicle manufacturers. These traders or businesses will routinely allow employees to drive an ever changing range of both the companies and customers vehicles. In order for the traders to comply with the requirements of the Road Traffic Act, it is essential that the motor trade road risks insurance is arrange in a flexible way to allow for the needs of the business. It is important to note that all road risks polices do not offer the same flexibility as standard, and it is important that your policy is tailored to the needs of your business. Classes of Motor Trade Insurance Road Risks provides insurance for the business in respect of vehicles belonging to the business, or in their custody or control in connection with the insured's business as a motor trader. Many persons believe that this class of insurance covers the policyholder or any authorised driver to drive "any vehicle, any time" - this not true, and you should carefully consider the definition set out above. A good example of this common mistake is that the private vehicles of directors of a limited company are not insured by virtue of this definition. It is true that the cover under the policy may extend to cover Social Domestic and Pleasure use, and also extend to include non-employees as drivers, but these are not standard extensions and once again you should clearly state your requirements for such cover. Cover is generally available as Third Party, Third Party Fire and Theft or Comprehensive. These levels of cover are consistent with the common meaning, but it should be noted that cover will not be provided for loss or damage to vehicles whilst at the business premises of the policyholder. Other key points to note are; - There may be a limit to the maximum amount payable in respect of damage to vehicles.
- Cover may be arranged on an open driving basis for all employees or more usually on a named driver basis - you must ensure that these details are updated with Insurers as required.
- No Claims Bonus - this is allowed subject to evidence of claim free insured motoring. The scales are not as dramatic as provided under private car insurance, but do contribute to significantly reduced premiums.
- Any trade plates within the business must be declared and cover is available for vehicles driven under these plates providing that the use of the plate is consistent with the appropriate regulations.
Liabilities. Protection against claims arising out of the legal liability to thirds parties and also employees arising in the course of the insured's business, consisting of the following. Employers Liability Under the Employers Liability (Compulsory Insurance) Act 1969, all employers, must hold current Employers Liability insurance in respect of their liabilities to any employees under their control. This equally applies to all Limited Companies, even when the only employees of the business are also directors/shareholders. The common limit of Indemnity for this insurance is £10,000,000, other limits may be requested, but £5,000,000 is the current minimum set by EC Law. For a more detailed explanation of Employers Liability Insurance please see our Employers Liability Page. Public Liability. This offers protection for the business in respect of third party claims for injury and property arising out of and in course of the operation of the business. This cover is not legally required, but in the current litigious society is an essential protection for personal and business assets. More information on Public Liability Insurance may be found at our Public Liability page, but there are some specific points of interest in motor trade insurance that must be borne in mind. These extension are available to motor trade cover, these are not included as standard and cover must be requested for these; Sales Indemnity - protection against claims arising out of the sale or supply of defective vehicles Defective Workmanship - also called Repair, Servicing and Maintenance, provides protection against losses arising as a result of failure of works that have been undertaken. Internal Risks Motor Trade Internal Risks picks up all the covers that are generally required by motor traders other than the Road Risks. The Liability insurances, described above, may be arranged on their own, but generally form part of this broader category. In addition to the liabilities these other covers are available. Property Damage Cover for loss or damage to customers or own stock vehicles whilst at the business premises, buildings insurance, contents insurance and cover for additional stock. Business Interruption. Loss of profits insurance that will provide financial recompense following a reduction in business following an insured incident under the property damage section of the policy e.g. when a building is destroyed by fire, or there is an interruption in the Public Services. Loss of Money Loss of business cash and also wrongful conversion, protecting traders where a vehicle is purchased in good faith from a person whom it later transpires does not have the right to sell. The cover is subject to the trader having taken al reasonable steps to ensure that the seller is legally entitled to sell the vehicle. Goods In Transit Protection against loss or damage to vehicles and/or other stock and equipment whilst in the course of transit away from the traders premises. Engineering Inspection This is not an insurance product as such, but provides the trader with an inspection schedule for all plant and equipment, such as lifting and pressure plant, as is required by law. The inspections are undertaken by insurance companies or third party inspectors working on the Insurers behalf. This is not intended as a comprehensive and complete guide to motor trade insurance, but as guide to the types of covers available to you. For more details or advice, or for quotations please contact us on 0845 838 7960, or alternatively select the product that you require from the list below. |
