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Motor trade insurance
Combined motor trade insurance is a single policy that packages road risks with cover for your premises, stock, liability and often business interruption, for traders working from a site. It matters because the sections interact, and a gap or a wrong figure in one can leave a loss uninsured.
Part of: Motor trade insurance
In short
A combined motor trade policy puts the covers a site-based trader usually needs under one schedule: road risks for driving vehicles in connection with the business, material damage to buildings, contents and tools, owned stock and customers' vehicles, public, products and employers' liability, and often business interruption. If you employ staff, employers' liability is usually compulsory, with a legal minimum of £5 million. Insurers rate each section separately, using what the business does, the premises and security, who drives, turnover, stock and customer vehicle values and claims history. Cover is always subject to the insurer's acceptance and the policy terms.
Combined policies are built from sections. Not every insurer offers every section, and the wording of each one decides what is actually covered, so treat the table below as a typical structure rather than a promise of cover.
| Section | What it commonly covers | What to check |
|---|---|---|
| Road risks | Your legal liability, and often damage to the vehicle, when you or named drivers use vehicles on the road for the business | Level of cover, who can drive, whether customers' vehicles and trade plates are included |
| Material damage | Buildings you are responsible for, contents, tools and equipment, against fire, theft and other listed events | Sums insured against rebuild and replacement cost |
| Stock | Vehicles you own for sale, on the premises and sometimes elsewhere | Total stock limit, any one vehicle limit, key and security conditions |
| Customers' vehicles | Vehicles left with you for repair, servicing, valeting or storage | Whether cover is on a legal liability basis or regardless of fault, and the limit |
| Public and products liability | Injury or property damage to third parties caused by your business or by work you have done | Faulty workmanship exclusions, limit of indemnity |
| Employers' liability | Injury or disease suffered by employees in the course of their work | Compulsory if you have employees; wageroll declared |
| Business interruption | Loss of gross profit or extra costs after insured damage to the premises | Indemnity period and the gross profit figure |
Optional extras commonly include legal expenses, money, goods in transit and engineering inspection of lifts and compressors. Each extra has its own conditions, so the schedule needs reading line by line.
The dividing line is usually the premises. A trader who buys and sells from home with no unit, no workshop and no staff may need nothing more than road risks only motor trade cover. Once you take a unit, a forecourt or a workshop, the property, stock and liability exposures grow, and a combined policy is the usual way to insure them together.
Illustrative: two partners sell cars from home on a road risks policy, then rent a small unit to prepare and repair stock. The move brings a building to insure, stock held overnight on site, customer cars in the workshop and possibly an employee. Their old road risks policy was not designed for any of that, so they would normally review cover before moving in rather than after. If you are still home based, see motor trade insurance without premises.
Two parts of a combined policy respond to legal requirements. The rest is commercial protection that landlords, lenders or customers may ask for but the law does not demand.
Under section 143 of the Road Traffic Act 1988, a person must not use a motor vehicle on a road or other public place, or cause or permit someone else to do so, unless a policy meeting the Act's requirements is in force. Section 145 sets what that policy must cover, including death, bodily injury and damage to property, and allows the property damage cover to be capped at £1,200,000 for any one accident. Most traders' risks go well beyond that legal floor, which is why the road risks section is usually wider.
If you employ people, you need employers' liability insurance of at least £5 million under regulation 3 of the Employers' Liability (Compulsory Insurance) Regulations 1998. GOV.UK guidance states you can be fined £2,500 for every day you are not properly insured, and up to £1,000 if you do not display the certificate or show it to an inspector. See employers' liability insurance for more on the requirement.
Each section is rated on its own information, then combined into one premium. Insurers commonly look at:
Getting these figures right is part of the duty of fair presentation in section 3 of the Insurance Act 2015, which requires a business to disclose every material circumstance it knows or ought to know, or enough to put the insurer on enquiry. For the full list of rating factors, see what affects the cost of motor trade insurance.
Most problems come from the way the sections interact, not from any single section.
Where a business made a careless (but not deliberate or reckless) misstatement, Schedule 1 of the Insurance Act 2015 allows proportionate remedies, for example reducing a claim payment where the insurer would have charged more. See the fair presentation duty.
If a claim dispute cannot be resolved with the insurer, smaller businesses may be able to use the Financial Ombudsman; its eligibility rules depend on turnover, balance sheet and staff numbers.
Illustrative. A fire starts overnight in the workshop of a garage that also sells used cars. The building is damaged, six cars of the garage's stock are destroyed and three customers' cars in for repair are smoke damaged. The garage cannot trade for several months.
Whether each part is paid depends on the wording, limits, conditions and what was disclosed. A similar case is set out in our motor trade premises fire scenario, and theft risks are covered in forecourt stock theft and key security.
Apex arranges motor trade insurance, including combined policies for dealers, garages, bodyshops and MOT stations, covering premises, stock, liability and road risks. A broker reads your enquiry and comes back with options, and there is no fee for a quote. To quote we need: what the business does, the premises address, who drives (ages, licences, points), turnover, the value of your own stock and customers' vehicles, and claims history. Cover is subject to the insurer's acceptance and the policy terms.
No single combined policy is required by law. What the law requires is motor insurance for using vehicles on roads under the Road Traffic Act 1988, and employers' liability insurance of at least £5 million if you employ people. A combined policy is a commercial way of bundling those with cover for premises, stock and other liabilities.
Road risks only covers driving vehicles on the road in connection with your motor trade business. A combined policy adds sections for premises, tools, stock held on site, customers' vehicles, public and products liability, employers' liability and often business interruption. Traders working from a unit or forecourt usually look at combined cover.
Many combined policies include a customers' vehicles section for cars left with you, and the road risks section may cover driving them. Cover may apply on a legal liability basis or regardless of fault, with limits and key security conditions. Check the wording and tell the insurer the highest value of customer vehicles you hold.
The legal minimum is £5 million for any one occurrence under the Employers' Liability (Compulsory Insurance) Regulations 1998. Many policies are written with a higher limit as standard, but the legal floor is £5 million. GOV.UK says you can be fined £2,500 for each day you are not properly insured.
Some can. For events after 1 April 2019, the Financial Ombudsman says small businesses are eligible if annual turnover was under £6.5 million and either the balance sheet total was under £5 million or they employed fewer than 50 people. You normally complain to the insurer before going to the Ombudsman.
Tell us what your business does, who drives, your premises and vehicle values. A broker reads every enquiry and comes back with options. No fee for a quote. Or call 0117 325 0027.
Start a motor trade enquiry Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
