4 things to be aware of when taking out a motor trade policy

It is important before you take out a motor trade policy, that you are aware of the below key areas to avoid being without important protection that you need. We explore these 4 areas in more detail.

Defective Workmanship Insurance

Defective Workmanship Insurance is usually included as part of a motor traders combined policy. Having this cover ensures that if any accidental damage of client vehicles happens whilst left in your custody, you are covered. If this situation arises, it is crucial any incidents of accidental damage are notified to your broker or insurer at the time the incident occurred. If this process is not followed, these cases can end up with court proceedings when the matter could have been rectified at the time of the loss.

Motor Insurance Database (MID)

The Motor Insurance Database (MID) was established to crack down on uninsured drivers. Currently uninsured drivers currently cost UK motorists over £500 million per year*. This means every time a driver pays their insurance premium, a portion of this amount goes to pay for these illegal road users.

The regulations place a direct obligation on motor traders to load their vehicle details at inception and update the MID immediately for any vehicle acquisition or disposal.

Which vehicles should be added on the MID?

• All permanent vehicles insured on your motor trade policy which are your property
• Trade plates
• Temporary vehicles

Stock vehicles do not need to be added on the MID.

If you don’t remove any vehicle you dispose of immediately from the MID, then you could be liable for any third party claims after you have sold it if the new owner hasn’t arranged insurance. This would then affect your insurance premium.

Personally Owned Vehicles

Something we see often is extending motor trade policies to include vehicles privately owned by directors of the business.

Only directors of limited or public limited companies and their spouses are able to have their privately owned vehicles covered under a motor trade policy. Acceptance can vary by insurer or broker, but is usually restricted by a maximum number.

You need to specifically request this extension for any personally owned vehicles to be covered under the policy.

County Court Judgments (CCJs)

Do you have, or have you ever had, a County Court Judgment against your name?

If the answer is yes, then your broker and/or insurer need to know about it. It is vitally important, and your duty to declare, any CCJs against you, be them personal or business related, as this can have an impact on your insurance policy which could be invalidated if not disclosed.

Do you need Motor Trade Insurance?

Footman James’ commercial business insurance specialists have many years of experience and are fully prepared to discuss the insurance requirements for businesses. We specialise in insurance solutions for many areas of the motor industry, including classic vehicle traders/dealers, classic vehicle restorers, classic vehicle repairers, vehicle storage, auction houses, motor museums and motorsport preparation.

You can find out more about getting a speedy quote with our small, dedicated Motor Trade team here: https://www.footmanjames.co.uk/motor-trade-insurance