Motor Trade Vehicle Insurance explained by our Insurance Expert

difference between motor trade insurance policies

What are the differences between Motor Trade Road Risks, Motor Trade Combined and Motor Fleet Commercial Vehicle Insurance?

Understanding motor trade insurance starts with the basics. A huge range of businesses and industries use a business vehicle as part of their day-to-day work and to legally drive a vehicle on the public highway you will need valid insurance. In the UK, a minimum of Third Party Insurance is required under the Road Traffic Act.

The type of insurance policy you need will depend on various factors including what industry you are in and how many vehicles you want to insure. Understanding what type of policy you require and the insurance terms used to describe the product you need is one of the first steps towards protecting your business.

Motor Trade Insurance

If you are involved in the motor trade you will need a specific motor trade insurance policy. You will find that most other insurance policies specifically exclude cover for any vehicle in the possession of a motor trader. You may be involved in car sales, mechanical repairs, body repairs, valeting or breakdown recovery – the good news is that there are plenty of products available, designed specifically for the needs of a motor trader.

A Motor Trade Road Risks policy is the basic cover, usually appropriate if you work from home or offer mobile services. The standard cover offered by a road risk policy allows you to drive both your own and your customers vehicles whilst they are in your possession for motor trade purposes for example repairs, test drive or valeting.

A Motor Trade Combined policy is road risks with added cover, which may include; buildings, plant/machinery, vehicles at a business premises and liabilities. Combined policies are normally only available if you trade from business premises.

Motor Fleet & Commercial Vehicle

If you are not involved in the motor trade industry but you run a business that requires the use of vehicles then you may require a Commercial Vehicle policy or a Motor Fleet policy. There is an almost infinite list of occupations that may fall into this category – from builders, plumbers and electricians to bakers, shops and health care providers or architects, accountants and solicitors.

A commercial vehicle police typically covers one vehicle whereas a motor fleet policy will cover two or more vehicles.

Motor fleet policies have many advantages such as

  • Open driving for any driver or employee authorised by the policyholder
  • Social domestic and pleasure use in addition to business use
  • The ability to easily add or remove vehicles throughout the term of the policy
  • A mix of commercial and personal vehicles on one policy
  • Dealing with one insurer for all vehicles to make admin easier
  • Optional add-ons such as windscreen and legal cover

Hopefully this brief summary of insurance for business vehicles may point you in the right direction but be sure to check your own policy restrictions or endorsements. If you need any assistance or more information about any of the above policies, please contact one of our expert advisors.

As specialist Motor Trade brokers, we are the experts.