Cost of motor trade insurance

19/06/2013 -- Mary Simpson
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How much is Motor Trade Insurance?

Cost can vary widely depending on the insurer, so shop around for quotes and compare prices.

Factors that will affect price are size and location of premises, payroll, annual mileage, claims history and the specific line of motor trade business and vehicles you deal in, eg

  • Car sales
  • Vehicle servicing
  • Breakdown and recovery
  • Mobile mechanics, body shops and fitters
  • Car valeting
  • Home-based auto traders

Road Risks Insurance Cover

Road risks motor insurance covers named drivers for driving customers’ cars for business purposes, as well as vehicles owned by you. Select the cover level that suits your business and vehicle(s):

  • Comprehensive (most costly but most cover)
  • Third Party, Fire and Theft (cheaper but less cover); or
  • Third Party Only (the bare legal minimum and cheapest)

Employers Liability Insurance

Unless you’re self employed, Employers Liability Insurance is a legal requirement.

The level of Employers Liability cover your business needs depends on the level of the risk to health and safety involved and number of employees.

Cover should usually be at least £5 million. Most insurers offer cover of at least £10 million.

Public Liability Insurance

Public liability insurance is designed to protect your business against potentially costly claims for damages by members of the public. The price of quotes will increase due to:

  • The higher level of risk associated with your motor trade business (eg breakdown recovery), turnover and the number of employees.
  • Higher business turnover attracts greater premiums.
  • More employees will increase the cost of cover


To assess whether you require these optional extras, discuss with your broker or agent the likelihood of claiming against each option, and the value to be gained from a claim.

  • Product liability insurance for defective products supplied by you
  • Material damage cover for buildings, contents, stock and vehicles
  • Demonstration vehicle cover for loss during customer product demos
  • Business interruption cover for loss of income from insured events eg fire, flood, loss of MOT testing licence.
  • Goods in Transit - Own Goods loss or damage to your own property while in transit in your own vehicles
  • Theft by employees
  • Legal expenses for solicitors' fees and expenses, barristers and witnesses, court costs, and opponents' costs if the verdict goes against you
  • Group personal accident and sickness for bodily injury or inability to carry out normal working activities

Cheapest Motor Trader Insurance

Cut the cost of insurance with these simple rules:

  • Older drivers - over 28 and under 65 – with a clean driving licence are cheapest to insure.
  • Limit the number of named drivers - the "risk" of a claim increases with the number of drivers on your policy.
  • Avoid vintage, veteran, classic, kit, sports and high performance cars, commercial and agricultural vehicles and horseboxes.
  • Limit breakdown recovery to 25% or less of your total business.
  • Buy a policy that can be paid monthly, interest free.
  • Don't buy a policy with cover that you don't need, eg, Green card cover, if your business doesn't take you to Europe.
  • 'Grey' imports, leased vehicles, large people carriers and vehicles adapted for disability are looked on as higher risk.
  • Vehicle salvaging, dismantling (even for spare parts), breaking, scrap, sale of parts or recovery are more expensive to insure.
  • Go for a combined policy with the one insurer - cheaper than taking out individual cover for different risks.
  • Check for discounts on fire and security equipment such as alarms, locks and CCTV.