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Motor trade insurance
Vehicle recovery insurance covers a recovery operator's own trucks on the road, the casualty vehicles it lifts, tows or carries, and vehicles stored in its yard. The compulsory minimum does not have to cover the car on the back.
Part of: Motor trade insurance
In short
Recovery operators need road risks for their recovery vehicles, but section 145(4) of the Road Traffic Act 1988 says compulsory cover need not include goods carried for hire or reward or property in their custody, so damage to the casualty vehicle needs a separate vehicles-carried section. DVSA says recovery vehicles are exempt from operator licensing only for genuine recovery of disabled vehicles; moving non-disabled cars is haulage. Yards need customer vehicle cover with security conditions, and employers' liability is compulsory once you employ staff.
A recovery business has three sets of vehicles at risk: its own recovery trucks, the casualty vehicles it lifts, tows or carries, and the vehicles stored in its yard. Each needs thinking about separately.
| Risk | Cover that commonly responds | Points to check |
|---|---|---|
| Accident involving your recovery vehicle on the road | Road risks for the recovery vehicles | Level of cover, drivers, vehicle weights |
| Damage to the casualty vehicle while loading, carried or towed | A vehicles-carried section, sometimes called goods in transit or on-hook cover | Limit per vehicle, loading and securing conditions |
| Damage to or theft of vehicles stored at your yard | Customer vehicles or vehicles in custody cover | Yard security, storage limits, keys |
| Injury to the public at a roadside scene, or damage to their property | Public liability | Exclusions for vehicle use, which is a road risks matter |
| Injury to your staff | Employers' liability | Compulsory once you employ staff |
Recovery is a specialist area and not every motor trade insurer writes it. Cover is always subject to the insurer's acceptance and the policy terms.
See also motor trade insurance, our motor trade broker guide and road risks only cover.
Section 143 of the Road Traffic Act 1988 makes it an offence to use a motor vehicle on a road or other public place without insurance for that use, so your recovery vehicles need road cover. But section 145(4) sets out what compulsory cover need not include, and three of the exceptions matter to recovery operators: damage to the vehicle itself, damage to goods carried for hire or reward in or on the vehicle or a trailer it draws, and damage to property in your custody or under your control.
In plain terms, the legal minimum protects third parties. It does not have to pay for the casualty car on your bed or on your spectacle lift. That needs a separate section covering vehicles carried or towed, and the wording matters: some policies cover the casualty vehicle only while it is secured on the bed or lift, others extend to loading and unloading.
Illustrative scenario: while a car is being winched onto a flatbed, a strap fails and the car rolls back into a wall. The damage to the wall may fall under public liability. The damage to the car is not covered by the compulsory road risks cover; it falls to whatever vehicles-carried section the operator holds, if the policy treats winching as part of loading.
DVSA's guide to running a vehicle recovery business (updated 12 August 2025) says "Recovery vehicles are exempt from operator licensing", but only for work within the legal definition of recovery. A recovery vehicle is one "constructed or permanently adapted primarily for any one or more of the purposes of lifting, towing and transporting a disabled vehicle". The number of vehicles that may be carried is set by the Department for Transport and is "currently set at 2 including any being carried on a spectacle lift".
The guide is clear about where the exemption ends. A recovery vehicle moving a non-disabled car from one garage forecourt to another is a haulage operation, whatever it looks like, and you need an operator's licence if you transport vehicles outside the definition of recovery, "even if this is only for a short period such as a few weeks or even just one day" (the licence requirement applies to vehicles over 3,500kg gross vehicle weight).
This matters for insurance too. Moving auction cars, dealer stock or new vehicles is vehicle transport rather than recovery, and insurers usually want to know about it. Tell them about every type of work you do. See haulage insurance if transport is a significant part of the business.
The same DVSA guide sets out several other rules that insurers commonly ask about:
| Topic | What the guide says |
|---|---|
| Drivers' hours and tachographs | The assimilated rules exempt "specialised breakdown vehicles" operating within 100km of their base. Outside that, the normal rules apply. |
| Annual test | Breakdown recovery vehicles are no longer exempt from plating and testing; previously exempt vehicles needed a current test certificate before 20 May 2019. |
| Amber beacons | Road recovery vehicles must be fitted with an amber warning beacon, to be used when stationary at the scene of a breakdown or when the vehicle cannot keep to appropriate speeds. |
| Driving licences | Category B covers vehicles up to 3,500kg; C1 covers 3,500kg to 7,500kg; heavier vehicles need category C. |
| Vehicle tax | Recovery vehicles may lose the reduced rate of duty if not used for carrying a broken-down vehicle. |
Insurers commonly ask about driver licence categories and experience on heavier vehicles, so have that information ready.
PAS 43:2018 is the BSI specification for the safe working of vehicle breakdown, recovery and removal operations, published on 30 September 2018. It sets requirements for a management system covering attendance at breakdowns, the type, maintenance and safety marking of recovery vehicles and equipment, technician training and competence, PPE, premises and standard operating procedures. Insurers commonly ask about training and safe systems of work, and certification against a recognised standard is one way to evidence them.
Electric and hybrid casualties add a further layer. HSE guidance lists vehicle recovery within incident response work, warns of high-voltage components that may stay live when the vehicle is switched off, and advises: "Avoid towing electric and hybrid vehicles unless it can be determined that it is safe to do so." Damaged EVs stored in a yard also raise fire questions, and some insurers now ask how they are stored and separated. See EV repair insurance for the motor trade.
Many recovery operators store vehicles, from customers' cars awaiting repair to vehicles held for others. Those vehicles are property in your custody, so cover usually comes from a customer vehicles or vehicles-in-custody section with its own limit, and insurers commonly attach conditions about fencing, gates, lighting and key security. See customer vehicles in your care and key security conditions.
If you employ drivers or yard staff, GOV.UK says employers' liability insurance with at least £5 million of cover is compulsory, with fines of £2,500 for each day you are not properly insured. If you also repair vehicles, see garage and vehicle repair insurance or a combined motor trade policy.
Apex arranges motor trade insurance for recovery operators, including road risks for recovery vehicles. A broker reads your enquiry and comes back with options, and there is no fee for a quote. We need: the work you do (breakdown recovery, contracts, any vehicle transport), your address and yard details, the recovery vehicles and their weights, who drives (ages, licences, points), turnover, the typical value of vehicles carried and stored, and your claims history. Cover is subject to the insurer's acceptance and the policy terms.
Not automatically. Section 145(4) of the Road Traffic Act 1988 says compulsory cover need not include damage to goods carried for hire or reward or property in your custody. Damage to the casualty vehicle normally needs a separate vehicles-carried or on-hook section, subject to its limit and loading conditions.
DVSA says recovery vehicles are exempt from operator licensing when used for recovery within the legal definition, which covers lifting, towing and transporting disabled vehicles. Moving non-disabled vehicles, such as dealer stock, is haulage, and an operator's licence is needed for vehicles over 3,500kg gross weight.
PAS 43:2018 is a BSI specification for a safe working management system in breakdown and recovery operations. It is a published standard rather than an Act or regulation. Insurers and customers commonly ask about training and safe systems of work, and certification is one way to evidence them.
Check first. HSE advises avoiding towing electric and hybrid vehicles unless it can be determined that it is safe to do so, and warns that high-voltage parts may stay live after the vehicle is switched off. Follow the manufacturer's recovery instructions where available.
Not always. DVSA's guide says the drivers' hours rules exempt specialised breakdown vehicles operating within 100km of their base. Work outside that radius, or that is not breakdown work, brings the normal rules back into play, so check each type of job.
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.
