When taking out a motor trade insurance policy, you will find many differences in the benefits that come as standard on some cover, but optional extras on others. This will also vary depending on the specific risks you may face.
Your type of motor trade business will determine much of your cover but it’s a good idea to try and avoid paying for extras that you don’t need or may even have from another source.
Here is our guide to the additional cover it may be worth including in your motor trade insurance policy to help protect your business.
Employer’s liability
If you employ staff, then you will need employer’s liability regardless of whether they drive vehicles or not – it is the law. This can be added to your motor trade insurance policy and will cover you should your employees have an accident and be injured while at work.
Public liability
This can also be included as part of a motor trade insurance policy and will protect you and your employees should a member of the public make a claim against you for damage or injury.
Product liability
If your motor trade business carries out work on vehicles and someone fits a part that turns out to be defective and causes damage to your customer’s vehicle, product liability will protect you against any claims that may be made and cover your costs when putting the damage right.
Haulage or goods in transit
When carrying large loads to a single destination, look at an insurance policy that includes haulage of goods. This will protect you against theft, loss or damage while cargo is being transported by vehicle from one place to another. Goods in transit offers similar cover but is geared towards van or courier drivers.
Breakdown and windscreen
Breakdown and windscreen cover are essential if you are on the road, keeping you moving and preventing loss of income. Breakdown coverage can vary depending on the level you take out but generally look at policies that include the following: roadside assistance or local cover (this is the basic level), vehicle recovery or national cover, at-home breakdown and onward travel.
Buildings & contents
Buildings insurance will protect your business in the event of damage to your premises by fire, floods, storms or burst pipes, and cover the costs of repairs and re-building work. Contents insurance can be included with buildings insurance and will cover you for furnishings, fixtures and fittings.
Business interruption
Business interruption insurance will replace any loss of income due to the business being halted as a result of damage, theft or disaster, such as flooding or fire. This type of insurance should also include a move to a temporary location, operating expenses, payroll, taxes and loan payments. Note, this won’t be covered within buildings and contents insurance, which just includes repairs for the damage.
Income protection
If you are a sole trader or work as a freelancer or consultant, it may be a good idea to insure yourself in the event of injury or illness. This is a long-term insurance policy that can help you to receive a regular income until you return to work or retire. Getting the right policy is essential, so have a chat with your broker. Income protection insurance is different from critical illness insurance that offers a one-off lump sum, or short-term income protection, which is time limited.
Protecting stock and supplies
Losing stock stored on your business premises to theft or damage could have serious consequences for your business. Including stock protection on your motor trade insurance policy can help to cover the costs and protect your cash flow.
High value stock and specified vehicle cover
For those in the car trading business, stock of vehicles cover is necessary to cover the vehicles in case of theft or damage. Make sure you choose the right level of cover to ensure you are fully protected, including specifying additional amounts for vehicles of high value.
Tools and equipment
Working within the motor trade means you will have plenty of tools that are part of your daily work, either within a workshop or mobile van. Tool theft is on the increase, so having cover means you won’t be out of pocket should your tools be taken, and you are able to replace them quickly.
Carriage of vehicles
This is only needed if you are going to be transporting vehicles on the back of a truck or recovery vehicle. If you are taking vehicles to customers, collecting from sellers or transporting to and from auctions, you will be protected in case of any damage to the vehicles whilst in transit.