Motor Trade Liability Insurance
As specialists in liability and motor trade insurance we provide instant access to great deals on motor trade liability insurance for a wide range of motor trade activities and occupations offering you the essential protection you need against claims made against you in respect of your legal liability.
What is motor trade liability insurance?
As the name suggests, Motor Trade Liability insurance is liability insurance specifically designed to meet the needs of businesses in the motor trade. The cover can be arranged by way of a standalone policy, or as part of another policy, e.g. Motor Trade Combined or Motor Trade Road Risks.
What does motor trade liability insurance cover?
The motor trade liability insurance product protects the policyholder against claims made against them in respect of their legal liability for personal injury or property damage by third parties or any employees.
Motor trade liability is similar in many respects to a standard liability policy but certain aspects of the cover are provided as extensions to reflect the particular needs of the industry and the individual trader.
The same basic cover tends to be given to all sectors of the motor trade, whether sales, repair or service, with specific endorsements being applied to tailor cover in accordance with the insurer’s requirements. Special attention needs to given to additional endorsements applied to ensure the cover remains suitable.
Essentially, the cover is in the same format as a general liability insurance product, covering Employers’ Liability, Public Liability and Products Liability, with Products Liability also being known as Defective Workmanship or Sales and Service Indemnity.
Specialist liability insurance for the motor trade
It is the Public and Products (Defective Workmanship/Sales and Service Indemnity) Liability cover that is the real differentiator between the different insurances available and the extent of cover offered needs to be understood prior to accepting cover to avoid claims being refused unexpectedly. The basic Public Liability provides cover for legal liability for injury to third parties and damage to third party property arising in the course of the business, excluding liability arising from goods sold or services provided.
The standard limits are £1M, £2M and £5M each and every claim, and cover is usually subject to a modest third party property damage excess. Different and higher limits of indemnity are available, but this may require additional excess of loss insurance(s) to achieve the required limit. Products (Defective Workmanship/Sales and Service Indemnity) Liability is available only with Public Liability and provides cover for legal liability for injury to third parties and damage to third party property arising from the products sold (including vehicles) or work undertaken/services provided in the course of the business.
The standard limits are £1M, £2M and £5M each and every claim and in the annual aggregate following the Public Liability limit selected, and cover is usually subject to a third party property damage excess that may be higher than the Public Liability excess. Different and higher limits of indemnity are available, but this may require additional excess of loss insurance(s) to achieve the required limit.
What is defective workmanship and sales and service indemnity insurance?
The Products (Defective Workmanship/Sales and Service Indemnity) Liability is the key cover that needs to be understood for businesses wanting the most from their protection against claims by third parties. Of particular note is some policies contain an exclusion for liability arising from the failure of the product or service to fulfil its intended function (known as the Efficacy Exclusion). This exclusion severely restricts cover in certain circumstances, and preference should be given to covers offered without this exclusion where it is considered to be a significant restriction.
Am I covered for damage to customers vehicles?
An area of confusion is the cover, if any, for loss or damage third party vehicles in the possession of the motor trader. This would normally be covered by Road Risks insurance whilst the vehicle is being driven on the road, or by the Customers Vehicles Property Damage section of a Motor Trade Combined insurance whilst the vehicle is at the premises of the motor trader. Motor Trade Liability insurance will usually exclude legal liability for loss or damage to property in the care, custody or control of the Insured, but businesses that are mobile or do not have Motor Trade Combined insurance can extend their Motor Trade Liability insurance to include legal liability for loss or damage to third party property (including vehicles) in their care, custody or control. There may an additional premium charged, with cover being subject to a lower inner limit and a higher excess.
Public Liability is available without the Products (Defective Workmanship/Sales and Service Indemnity) Liability cover, and can be offered in this way without it being specifically pointed out. If in doubt, always check the extent of cover provided with your supplier.
How much does motor trade liability insurance cost?
The cost of public liability insurance for motor traders has reduced quite dramatically in recent years and the price you pay will be based upon how many people are involved in the business, the limit of indemnity you require, whether you require sales and service indemnity or defective workmanship and whether you have had any claims made against you previously.
Employers liability insurance for the motor trade
The Employers’ Liability cover is standard, providing cover for the employers’ legal liability for death, injury or disease to employees arising in the course of the business. A standard limit of indemnity of £10M each and every claim, costs inclusive is given, and the cover is free from any excess. Higher limits of indemnity are available, but this may require additional excess of loss insurance(s) to achieve the required limit.
How do I buy motor trade liability insurance?
You can apply on-line or call us direct to discuss your requirements with a broker who will be happy to provide you with a range of cover and options to meet your needs.
What is the limit of indemnity under a motor trade liability insurance policy?
The limit of indemnity under the policy represents the insurers maximum liability in respect of any claim under the policy. Common limits for public liability are £1M £2M and £5M with other limits available upon request.
For employers liability, policies are issued with a standard limit of £10M, although the actual legal minimum requirement is only £5M
Who needs motor trade liability insurance?
Anyone engaged in motor trade activities on a professional basis should be keen to ensure that they are protected against claims from third parties, both in respect of any claims made against them but also to cover themselves against the legal costs associated with any action.
In addition to this if you employ people within the business then employers liability is a legal requirement for all but a very few employers. More information on who maybe exempt is available on our employers liability page.
Obviously certain aspects of the motor trade industry are naturally more hazardous than others but these differences in risk are reflected in the premiums you pay. The motor trade liability insurance product is not a “one size fits all” product.
How much is motor trade liability insurance and how can I buy cover?
The price you pay for your motor trade liability insurance will depend upon the type of business you are engaged in, how many people you employ and whether you have previously had any claims made against you amongst other factors but obtaining a quote is easy.
You can call us direct or apply on-line by following the link above. If you operate from business premises you may find that a combined motor trade insurance product is more suited to your requirements as this can include not only your public and employers liability insurance but other aspects such as cover in respect of your premises and you road risks insurance requirements.
Apply on-line or call us on 0161 300 2930.