If you run a business where you and your staff drive or interact with customer’s vehicles, you’ll need to get special motor trade insurance, or traders’ insurance to cover yourself against accidents, damage and other issues.
You’ll be asking yourself “do I need motor trade insurance”? The real question should be can you afford not to have it? Think about the potential issues that could arise for your business and make sure you are covered.
Often issues don’t ever arise but having this safety net in place will mean you can get on with running the business with peace of mind.
Regardless of this reassuring element, the most important reason for getting this type of insurance is that it is a legal requirement under the Road Traffic Act 1988.
Like purchasing any type of insurance there are many options when buying motor trade insurance. Here are three things to consider and help guide you to purchasing the best motor trade insurance policy for you and your business.
What kind of policy do I need?
Like private vehicle insurance, there are different levels of policy that you can get for your motor trade insurance.
The most basic policy is Third Party Only, which is the minimum legal requirement and offers only very basic protection. If you hit a third party their costs would be covered by your insurer, but not for the vehicle you are driving.
Third Party, Fire and Theft also covers your own vehicles, for any fire and theft. Comprehensive insurance includes all of the above and also any accidental damage, malicious damage and flood.
Specific motor trade insurance policies like Combined Motor Trade Insurance can extend insurance to cover much more including the premises your business is trading from. If you work directly with the public on your premises it is worth considering expanded packages that include Public Liability, Product Liability and Employers’ Liability insurance to make sure you are fully covered for all aspects of operating as a motor trader.
Policies can cover occupations such as Vehicle Sales insurance, Mechanics and Bodyshop insurance, Vehicle Recovery insurance and MOT Garage insurance which might fit your specific needs.
Each business and its needs are different so it is important to fully research your options and consider what you need a policy to do before progressing.
Honesty is the best (for your) policy
When arranging a motor trade insurance policy, you might think that withholding information or downplaying your liabilities will save you money. But in the long run, this tactic will undoubtedly come back to bite you and cost you more money.
When speaking to a motor trade insurance broker you need to be 100% honest about your operation and the work you do, this will help them provide you with the most effective policy and offer you the most protection against claims.
If you are thinking of being dishonest in any way, don’t.
Most commonly associated with young drivers, ‘fronting’ is often used to avoid high premiums to use a No Claims Discount. This is illegal, and your policy may be voided if you are found out.
If false or misleading information is provided such as a motor trader claiming they are a part time motor trader when they, in fact, do work full time or provide false information about condition of vehicles etc. this could result in the policy being cancelled or voided and any pending claims could be dropped, leaving them out of pocket.
When you are looking for a motor insurance policy the most effective part of your planning is to provide accurate information to get the correct policy.
Trying to save money by offering misleading information will undoubtedly cost you more in future, than the cost of paying for a properly considered policy. This would also reflect badly on you and negatively affect the cost when you are shopping for a new motor trade insurance policy. There are also, often, penalty fees incurred as a result of a voided or cancelled policy. It is simply not worth it!
Shop around for the best deal
The amount of information and different companies offering motor trade insurance can seem a little daunting, but with a little bit of effort, you can find the most cost-effective policy for your needs.
Cheap motor trade policies are offered by insurance companies on proof of trading, but the best way to find a deal would be to go through an experienced and reputable insurance broker, who has a good understanding of the market and, often, access to better rates.
Also, don’t be duped by the cheapest price. This is not always going to be the best option for you. Seriously look over the details of what is on offer and the terms of the policy. You might find that a slightly more expensive policy will provide you with much more robust cover and better protection for your business.
Although it is a legal requirement, a little bit of thought and planning can get you the cheapest motor trade insurance policy that works for you. It can be expensive to get the right protection, but not being honest about your requirements will be more costly in the end.