Motor trade insurance is designed for anyone running a motor trade business with the need to cover multiple vehicles. It covers wide range of motor trade businesses, including ones that operate from home or on the road.
This quick guide will take you through the basics of motor trade insurance for mobile and home-based traders.
Does my motor trade business need a premises?
No – you don’t need to have a fixed premises to work as a motor trader.
Many motor traders, including mobile mechanics and online car dealers, operate from home or on the road. You can still get motor trade insurance even if you don’t operate from a forecourt or showroom.
Do I still need a motor trade insurance policy if I don’t have a business premises?
Yes – motor trade insurance is mandatory for all businesses within the motor trade, including those that run from home or on the road.
If you buy, sell, repair, customise, collect, or deliver vehicles for work, you legally need motor trade insurance to operate. Without suitable cover in place, you could face hefty fines or prosecution.
How is home-based motor trade insurance different from standard motor trade insurance?
This type of motor trade insurance is tailored to the unique risks associated with mobile and remote trading. Your insurance requirements as a mobile trader will likely differ from a business that operates from a permanent premises.
But whether you work from home or from a fixed location, be aware that you will have to prove to your insurance provider that you run a genuine business.
Typically, you will need to provide insurers with:
- Proof of trading – including invoices and receipts.
- Your business registration – to prove that you are either a sole trader or a limited company.
- Trade plate usage – to evidence that you regularly move vehicles for business purposes.
What type of cover will I need?
Road risk insurance
At the very minimum, most home-based motor trade businesses need road risk insurance.
It covers you (and your employees) to drive vehicles related to your business on public roads, including vehicles you do not own.
Road risk insurance comes in three levels:
- Third-party only (TPO) – covers you if you cause damage to someone else’s vehicle or injure a third party in a fault accident.
- Third-party, fire & theft (TPFT) – covers everything included in TPO and also protects you if your vehicle(s) are stolen or damaged by fire.
- Comprehensive – can cover you in most accident scenarios and includes cover for accidental damage to your own vehicle(s).
Additional cover
You can also take out additional policies alongside your standard road risk cover. This can include:
- Liability cover –
- Employers’ liability – a legal requirement if you have any employees. This will protect you if an employee has an injury at work and makes a claim against you.
- Public liability – Protects your business if a visitor or customer is injured on your premises by helping cover medical costs, legal fees, and compensation claims.
- Products and professional liability – covers for defective workmanship or professional errors.
- Goods in transit – cover for damage or theft of any parts, vehicles, or equipment in transit.
- Tool and equipment – cover for your specialised tools, diagnostic devices, and other equipment.
- Business interruption – financial support to help you cover ongoing expenses if an insured event forces you to temporarily close business.
- Personal vehicle – covers your own personal vehicle when you use it for business purposes.
The type of cover and additional policies you need will all depend on your trade and the type of business you run.
If you’re unsure what type of cover would be best for you, our team can help guide you through the process and offer expert advice.
Where can I get a motor trade insurance quote?
You can get a motor trade insurance quote directly from an insurance provider or through a broker such as Patons Insurance.
Established in 1972, we’re a commercial motor insurance broker specialising in motor trade insurance. Whether you work from home or from a fixed location, we’ll compare quotes for you using our panel of trusted insurance providers to help you find a policy that’s both suitable and competitively priced.
Get your quote by filling out the quote form on our website or by calling our team on 0333 015 6886.
