Ask the expert: Do motor traders need material damage and liabilities insurance?

The core insurance covers motor trade businesses need

Ask the expert: Do motor traders need material damage and liabilities insurance?
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Understanding how motor trade insurance works can sometimes seem tricky, however Jem Emirali has specialised in this industry for over 12 years and heads up the Motor Trade division at Aston Lark, one of the largest independent insurance brokers in the UK. Here, he shares his expert answers to commonly asked insurance questions to help motor traders keep their businesses protected. This time, he looks at the core covers motor traders need.

The cover you have for your motor trade makes all the difference between protecting your business properly or leaving yourself exposed to risk.

Three or four times a week, I’ll speak to prospective clients who have what is commonly known as Road Risks Only cover – which means they are purely insured to drive vehicles on the road, and they have no form of protection for vehicles they keep at their premises or any form of liabilities cover.

There’s no getting around the fact that this arrangement is leaving them at significant risk. Let’s take a look at why.

First things first – and this is really important – any business that employs one or more people is legally required to have Employers Liability insurance.

This type of cover protects you against the cost of compensation claims that could arise if one of your employees falls ill or gets hurt as a result of their work for you.

Any motor trade business that employs staff but doesn’t have Employers Liability cover is effectively breaking the law and could end up with hefty fines or even a prison sentence if an employee gets injured.

That’s why it’s vital to ensure you have this type of cover alongside Road Risks when you have people working for you.

Then you should consider the risks to vehicles left in your care.

Material Damage cover is a type of insurance that protects customer vehicles on your premises, as well as key items such as hand tools, buildings, machinery and more.

You may be happy for your business to absorb this risk, but it’s important to think of your customers.

After many years in this industry, I believe that if a customer thought their vehicle wouldn’t be insured when left with you, they wouldn’t feel confident to leave it.

Material Damage cover gives both your business and your customers a safety net.

How you run your business matters too.

What tools do you use, and how would you pay to replace them if you had to?

In my time, I’ve seen a number of claims for “a few tools” that ended up being £10,000 or £20,000 due to the cost to replace them.

Portable Hand Tools cover is a relatively cheap insurance that protects your tools – and you – from the potentially sky-high costs of replacing them if they get stolen or accidentally damaged.

These types of covers are critical for motor traders – and the irony is, you may not be saving money by taking out less cover. Some insurers will offer a cheaper quote for a policy that covers Road Risks, Employers Liability, Material Damage and Hand Tools altogether as they prefer to insure a risk ‘properly’, rather than covering just one aspect of a business.

With these core covers, you can rest easy knowing that your motor trade is well protected – but there are still plenty of options and extensions available to give you added peace of mind, from Business Interruption to Money cover.

So, if you want to find out more, please call us on 0330 174 3482 or use our online form.

Our friendly specialist team will be more than happy to help.

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