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Mid-market insurance
Franchised car dealership insurance is a combined motor trade programme covering a dealer's vehicle stock, demonstrators, road risks, premises, workshop, liabilities and loss of profit. It matters because one fire, theft spree or franchise disruption can stop a site trading for months.
Part of: Motor trade insurance
In short
A franchised dealer usually needs one coordinated programme rather than a stack of small policies: stock and demonstrator cover on and off site, road risks for staff, customers and trade plates, property and workshop cover, business interruption that reflects reliance on the manufacturer, cover for customer vehicles in your custody, and employers' and public liability. The details that decide claims are the stock limits per location, key and forecourt security conditions, who may drive, how electric vehicles are stored and charged, and whether the indemnity period is long enough to rebuild a showroom.
The short answer: protect the value of the stock, keep vehicles legally on the road, and keep the business earning if a site cannot trade. For a multi-franchise or multi-site group that usually means a combined motor trade policy with a road risks section, an internal risks section for vehicles on premises, buildings and contents cover, business interruption and liability, plus separate policies for cyber, management liability and any fleet that sits outside the trade policy.
Franchise dealers differ from independent traders in three ways that shape cover: stock and demonstrator values are higher and more concentrated, the manufacturer's standards dictate premises, systems and processes, and earnings depend heavily on one brand relationship. A programme that treats the dealership like a small used car pitch tends to be under insured in exactly those areas. Our motor trade insurance page sets out the wider product.
| Section | What it usually responds to | What to check |
|---|---|---|
| Stock and demonstrators (internal risks) | Fire, theft, flood and accidental damage to vehicles at your premises | Limit per site and any single vehicle limit; overnight storage conditions |
| Road risks | Third party liability and, if selected, damage to vehicles driven on the road for the business | Driver age and licence rules, named versus any driver, use of trade plates, test drives and demonstrators |
| Customer vehicles | Damage to customer vehicles in your care in the workshop or on the road | Whether it sits in internal risks, road risks or both, and the limit per vehicle |
| Property | Showroom, workshop, bodyshop, plant, tools and parts stock | Rebuild value, manufacturer specified fit out, lifts and diagnostic equipment |
| Business interruption | Loss of gross profit after insured damage | Indemnity period, supplier and denial of access extensions |
| Liability | Employers' liability, public liability and products liability for work and parts supplied | Limits required by the franchise agreement and landlords |
Wordings vary, so the same loss can fall under different sections with different excesses. The schedule matters as much as the policy booklet.
A franchise dealer's income depends on new car allocation, warranty work paid by the manufacturer, and finance and aftersales volumes tied to the brand. Business interruption insurance usually pays for loss of gross profit after damage insured under the property section. It does not usually respond to a commercial decision by a manufacturer, a terminated franchise agreement or a change in distribution model, because there is no insured damage.
Where it can help is when damage elsewhere stops you trading: a fire at a supplier's premises, a regional parts depot or a neighbouring property that closes access. Those extensions are commonly subject to sub limits and named or unnamed supplier wording, so check what is actually covered. Rebuilding a showroom to manufacturer standards and recovering customers often takes longer than owners expect; see choosing a business interruption indemnity period and the worked motor trade premises fire scenario.
Keys and forecourt theft. Many stock losses start with keys, either taken in a burglary or used in relay and cloning attacks on keyless vehicles. Policies commonly impose key safe, alarm and overnight security conditions, and a breach can reduce or defeat a claim. Our guide to forecourt stock theft and key security covers the controls insurers commonly look for.
Electric vehicles. Underwriters usually ask where electric vehicles are stored and charged, how far charging points sit from buildings, how a damaged high voltage vehicle is quarantined and whether technicians are trained. HSE's motor vehicle repair guidance (HSG261) is the starting point for workshop safety; see also electric vehicle repair insurance.
Trade plates. GOV.UK says trade plates can be used only on vehicles that are insured, roadworthy and have a valid MOT or exemption, and only for the purpose stated on your application (trade licence rules). Make sure the road risks section covers every use you actually make of them.
Finance. Introducing customers to car finance is credit broking, and the FCA's page for motor dealers explains when limited or full permission is needed. That is a regulatory matter rather than an insurance one, but it is relevant to management liability and to how you describe the business on a proposal.
These examples are illustrative only and do not describe any real business or claim.
If you run other sites or brands, compare this with used car dealer insurance and commercial vehicle dealer insurance. What to expect from a motor trade claim explains the claims process, and cyber insurance for commercial businesses covers dealer management system and data risks that motor trade policies usually leave out.
Apex arranges motor trade programmes for dealer groups; a broker reads every enquiry.
Most franchised dealers use a combined motor trade policy because it brings road risks, stock on premises, property, business interruption and liability under one schedule. Larger groups sometimes split property or liability into separate policies. What matters is that every vehicle, site and road use is covered somewhere, with limits that reflect peak stock rather than an average.
Usually only if the road risks section allows social, domestic and pleasure use by the named drivers and the policy includes damage to the vehicle, not just third party cover. Some wordings exclude family members or overnight parking away from the premises. Check the driver clause and any conditions about where demonstrators are kept overnight.
Generally no. Business interruption insurance usually pays loss of gross profit after insured physical damage, so a commercial decision by a manufacturer is not covered. It can help where damage at a supplier or a neighbouring property stops you trading, subject to the extension wording and sub limits.
Yes. Insurers commonly ask about charging locations, distances from buildings, storage of damaged high voltage vehicles and technician training. Changes to these can be a material change in risk, so tell your broker before installing new charging or a quarantine area rather than at the next renewal.
Usually it is worth considering. Motor trade policies rarely cover a ransomware attack on the dealer management system, a customer data breach or payment diversion fraud. A separate cyber policy commonly covers incident response, data restoration, business interruption from a system outage and some liabilities, subject to its terms. Check how the two policies interact before renewal.
Send us your current schedules or renewal pack and we will review the whole programme and tell you plainly what to keep and what to change. No fee and no obligation. Or call 0117 325 0027.
Book a programme review Get a quoteApex 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.
