If you are a company or sole trader involved in the motor trade, you will require a motor trade insurance certificate. To get a certificate, you’ll need a motor trade insurance policy, which you can find via sites like NimbleFins to help you get discounts. Once you have a policy in place, your insurance company or broker will supply you with your motor trade insurance certificate.
To obtain a certificate, you will have to prove your involvement with the motor industry and demonstrate that you earn an income from activities connected with the sale, repair or maintenance of vehicles. This can be evidenced by records of transactions, invoices, and receipts from services provided or vehicle sales.
If your business is centred around vehicles in any way, including transportation or cleaning, then a motor trade insurance certificate will be required. Motor vehicle claims can be the result of accidents, loss, damage, or theft.
Protection is needed to guard your company and customer vehicles against harm while they are in your possession. This can include vehicles left on the business premises overnight, whether they belong to the business or a customer.
What is a motor trade insurance certificate?
Motor trade insurance will be needed if you are responsible for customer vehicles or temporarily hold custody of vehicles for any reason. Therefore this kind of insurance is used by MOT testing centres, car jockeys, repair shops, mobile mechanics or valets.
Repairing, transporting, or driving vehicles that you don’t own means that you could be liable for any loss or damage claims should an incident occur. Motor trade insurance protects your business and its employees when operating clients vehicles, performing repairs or cleaning other peoples’ automobiles.
Each policy will be different and is designed to incorporate the specific coverage needed by each business. As with most other insurance, policies may be obtained that provide different levels of protection and can be purchased as third-party, third-party fire and theft, or fully comprehensive coverage.
Some of the common protections offered by motor trader insurance are:
- Road risk: protects vehicles that are driven on public roads for purposes like vehicle delivery, moving vehicles after valeting, or driving to test repairs or faults.
- Public liability: protects your business and employees from third party claims arising from damage or loss.
- Product liability: insures your business against faulty or defective parts.
- Employers’ liability: used by all businesses to provide financial protection in case staff are injured because of work.
- Material damage: provides coverage for equipment or vehicles owned or left at the business premises.
The cost of motor trade insurance will fluctuate depending on the number of drivers being covered and the types of vehicles being driven. Companies sometimes opt for a named driver policy that specifies exactly who will be driving the vehicles to keep premiums down.
Larger businesses with substantial vehicles may find this type of policy limiting and therefore obtain a policy that allows any driver to operate vehicles.
Can I pay for motor trade insurance monthly?
As with the majority of insurance policies, motor trade insurance can be paid in a lump sum as one annual premium. However, for smaller businesses or those just getting started, that expense may not be manageable.
The cost of a motor trade policy will be affected by many factors. For example, the size of the business, number and age of drivers, type and age of vehicles being operated, and many other considerations must be taken into account to ensure that your policy is providing adequate protection.
Fortunately, most motor trade insurance policies allow the policyholder to make payments in instalments, which can help level out cash flow.
As a guideline, the monthly premiums for motor trade insurance will average between £40 and £50 for a sole trader. As the company grows or adds more drivers, more coverage is required or needs change.
Is motor trade insurance required by law?
If your business uses, holds, or operates vehicles that are owned by someone else then the law will require you to have motor trader insurance. This is true for all business types, from sole traders up to larger, corporate entities. Whether you operate your business on a full or part-time basis, motor trade insurance coverage will still be required to provide protection.
The law states that companies need the minimum amount of motor trade insurance cover to operate their business, meaning that cheaper coverage options like third party insurance can be selected. Those that have a motor trade insurance policy are also legally responsible for providing their information to the MID – Motor Insurance Database.
To obtain motor trade insurance, you must be a genuine auto trader or vehicle specialist with a financial investment in the industry. Those that work on cars occasionally or as a hobby will not generally require motor trade insurance.