Motor Trade Combined Insurance is designed for motor traders who operate from commercial premises. This can include new or used car dealers operating from either a show room or a lot, mechanical workshops & MOT centres, paint/body shops and tyre or exhaust fitters.
The cover available is broadly similar to the Commercial Combined insurance policy with the addition of Road Risks. This can be Third Party Only, Third Party Fire and Theft or fully Comprehensive however most policyholders opt for the latter as the difference in premium is normally minimal.
The Road Risks section of a Motor Trade insurance policy allows authorised persons, typically employees, to drive any vehicle owned by or in the custody or control of the business including customers’ vehicles. The premium charged typically depends upon the number of drivers, their age and driving history, and whether they need cover for just business purposes or also social domestic and pleasure. This section can also be extended to allow potential customers to test drive vehicles for sale, either accompanied by a member of staff or unaccompanied, and courtesy vehicles provided to customers whilst their vehicle is in your custody for the purposes of having work carried out on it.
As with a Commercial Combined policy the location and construction of the premises is important to insurers as are the activities undertaken. Pure sales risks are at the bottom end of the spectrum with mechanical work on heavy goods vehicles or coaches at the other. The storage of flammables and paint fumes are a concern to insurers who normally insist that any such liquids are kept in fire-proof cabinets when not in use and spray booths used by car body repairs shops have suitable extraction systems. Any work away from the premises other than collection or delivery of parts of vehicles must be disclosed to insurers particularly accident or breakdown recovery work.
Motor Trade Combined insurance policies will have a number of compulsory sections including Material Damage, Liability and Road Risks. Optional covers typically include Business Interruption, Business Money including Personal Accident Assault, Engineering Inspection of Pressure Plant & Lifting Equipment, Deterioration of Stock and Commercial Legal Expenses. Many insurers can also offer cover for Loss of MOT Licence and Wrongful Conversion (buying a vehicle from someone that doesn’t have legal title to it).
The Liability sections of Motor Trade policies can include cover for Defective Workmanship/Sale or Servicing Indemnity.
A minimum level of security is normally required by insurers who will normally charge an increased premium and/or apply a higher excess for vehicles not kept in a locked building or secure compound overnight. Theft of tools is a major concern and most insurers will require portable hand tools to be kept in locked chests out of hours & for the chests themselves to be secured to the floor, walls or other immobile object such as a ramp. Key security is also important and vehicle keys should be kept in a locked safe when not in use.