Motor trade insurance is a form of financial protection available to people mainly engaged in the business of trading motor vehicles. It is not limited to the buy-and-sell business; it also covers valet services, repair and maintenance work, and other similar activities. A common misconception about this type of insurance is that it is only required for small businesses. However, small and large businesses are encouraged to avail of motor trade insurance policies in order to afford greater financial protection in case of loss or damage.
There are five general types of motor trade insurance policies. The first type is called the Third Party Only policy. The law requires that motor traders who engage in specific businesses be covered by the Third Party Only Policy. These engagements include vehicle repair, servicing or restoration, vehicle fitting, mobile tuning, valet, running a MOT testing centre or garage, buying and selling vehicles for profit, and driving vehicles on the public roadway, whether personally owned or that of a customers. This type of policy covers the driver in case of damage caused to a third partys property.
Compared to the first type, the Third Party Fire and Theft Policy has a broader coverage. Under this policy, traders are protected in case of loss or damage to vehicles that are under their custody and control, especially if such loss or damage is through fire or theft. The policy also includes damage, injury, and other third-party claims.
The third type is the Comprehensive Policy. Generally, motor trade insurance policies only covers the named driver so that he is permitted to drive different vehicles for trade purposes. Under the Comprehensive Policy, accidental damages to vehicles are also covered, whether or not they are owned by the trader. This is in addition to the loss, damage, or injury caused to third persons.
Another type is the Motor Trade Liability Insurance. Under this policy, a trader is protected depending on his liability. Employers liability insures the employer in case of injuries sustained by any of his employees, while public liability indemnifies the trader for loss or damages caused to the public. On the other hand, sales and service indemnity covers accidental injury or damage to any property caused by any motor trade-related activities.
Finally, the last type is the Combined Motor Trade Insurance Policy. This has the broadest coverage among the five policies. It protects the traders whole business, including its vehicles, the premises, tools, contents, and others.
In conclusion, motor traders have a variety of insurance options to choose from, and it depends on the extent of how they want to be covered. Prior to investing in an insurance policy, one must carefully assess the road risk level and ask for insurance quotes. This will help one determine which policy best suits the specific needs of his business. And with the growing popularity of the motor trade industry, there is all the more reason for traders to make sure that they will be indemnified in case of emergencies.