Motor Trade Combined Insurance

An overview of combined motor trade insurance in the United Kingdom.

What is Combined Motor Trade Insurance?

The motor trade combined insurance policy is the insurance market's response to the specialist requirements of motor traders in the United Kingdom for a comprehensive solution to the specialist insurance needs of the professional motor trade.

The policy combines a range of individual covers into one package policy that helps achieve a cost-effective and seamless insurance solution.  In many ways the policy is similar to a standard commercial combined insurance, but with the availability of additional covers specific to the needs of the motor trader.

The most obvious difference is the availability of motor trade road risks insurance 

Road Risks Insurance?

Motor trade road risks insurance is a specifically designed motor insurance contract for motor traders and other businesses with an identifiable requirement for flexible motor cover consistent with that required within the motor trade.

The motor insurance certificate under road risks insurance policy, allows the policyholder, and the driver specified under the policy, to drive vehicles belonging to the policyholder and vehicles belonging to third parties for motor trade purposes.  It also allows for specified drivers to use the policyholder's own vehicles for social domestic and pleasure use.  In certain circumstances, the specified drivers may not actually be named in the policy, what may be restricted to a class of driver such as employees of the insured.

It is worth noting that motor trade policies do not by default provide cover in respect of private vehicles not belonging to the Insured named on the policy. arrangements must be made, if vehicles belonging to spouses or directors of a limited company are to be covered.

The levels of cover available under a road risks insurance policy are consistent with that provided by private car insurance in terms of third-party, third-party fire and theft and comprehensive cover.

Under most combined motor trade insurance policies, vehicles kept at the business premises overnight are not insured under the road risks section, but are covered under the property damage section.

Property Damage/Material Damage

Under a motor trade combined insurance policy the property damage section provides indemnity to the insured in respect of losses occurring to physical assets of the business against such risks as Fire, Special Perils, Theft and Accidental Damage. The property insured under this section of the policy will include any buildings, contents, vehicles, money and goods in transit.

Business Interruption / Loss of Profits Insurance

The business interruption section of a combined motor trade insurance policy provides the policyholder with indemnity in respect of any reduction of income/loss of profits as a result of an interruption to the business arising from property damage as insured under the property damage section.  The cover under this section provides a maximum limit of indemnity in respect of the indemnity period.  The indemnity period, offering 12 months, is the period selected by the insured that starts from the date of any material damage claim until the business is again trading at pre-loss levels.

Motor Trade Liability Insurance

Public Liability Insurance

The public liability insurance section, often referred to as third-party liability, of the motor trade combined insurance policy provides the insured with protection against their legal liabilities arising out of loss of or damage to persons or property arising out of the activities of the business. Limits for public liability insurance in the United Kingdom generally start at £1 million, but many policies have standard limits of £2 million, with options to increase this to £5 million or £10 million.

Standard public liability insurance policies in the United Kingdom exclude.  What is known as the "products risk".  This aspect of cover is generally covered by a product liability extension, which generally in motor trade insurance terms is referred to as sales and service indemnity or defective workmanship.  Recently, certain high-profile insurers have started to refer to this cover as product liability.

Sales and Service Indemnity / Defective Workmanship

This section of the policy, akin to products liability insurance, protects the insured in respect of their legal liability arising out of the supply of product or services in connection with the business.  This would necessarily include the sale of the motor vehicle all repairs undertaken to motor vehicles.

Employers Liability Insurance

It is a legal requirement for any business or individual that employs people in the United Kingdom to carry employers liability insurance.  Under the Employers Liability (Compulsory Insurance) Act, the minimum requirement is £5 million, although in the United Kingdom the standard limits £10 million.  There are few exceptions to this requirement that relate to sole shareholders and directors of limited companies, and certain close family members working within the business.  Employers Liability Insurance protects the insured in respect of their legal liability for injury or damage to employees sustained during the course of their employment.  Even where exceptions may apply, it is generally very advisable for cover to be effected.

Engineering Insurance / Statutory Inspection

Many motor trade businesses in the United Kingdom operate certain items of plant and machinery that are subject to a statutory legal inspection regime.  Such items of plant as, hydraulic jacks, compressors, lifting tackle and motor vehicle tables are amongst the extensive list of equipment the require inspection.  Its basic form, the engineering section of a combined motor trade insurance policy provides no actual insurance cover, although this may be added for an additional premium.  For more information, and quotes on statutory inspection cover, please go here.