Motor Premises

Friday, March 14. 2014
Obviously, if you work in the motor trade and operate from established premises – and that could be anything from a High Street showroom, a service/repair garage or an MOT centre to a bodyshop, breaker’s yard or valet station – you should arrange a suitable level of insurance cover. However, did you know that a host of ‘bolt-on’ options are also available which can deliver enhanced levels of protection for your business? What’s more, Combined Road Risk and Premises cover could prove a more competitive choice premium-wise than taking out individual policies.

Let’s start with the basics. If you own the freehold of your premises and have a stock of vehicles or keep tools, machinery and office equipment, you should insure the building and these assets against fire, flood and damage (if you lease the premises, you might still need to safeguard the contents). In addition, a Motor Trade Premises policy can also provide statutory Employer’s Liability cover (compulsory if you have an employee) and we would also advise adding Public Liability insurance (not required by law) to protect against any claims made by a third party.

Now, let’s look at some of those invaluable ‘bolt-on’ cover extensions:

1) Engineering: insurance companies will inspect your plant and machinery equipment to ensure everything is in good working order and complies with legal obligations. If a piece of machinery does break down, it will be repaired.

2) Sales and Service: if you sell or repair a vehicle in good faith, but something subsequently goes wrong (it happens!) resulting in loss, damage or injury, you will be protected to the level of the indemnity.

3) Goods-in-Transit: Goods-in-Transit will insure against loss, theft and damage while on the road ­– it is strongly recommended if you collect or deliver vehicles as part of your business.

4) Business Interruption: if your premises are severely damaged, for example by a major fire or flood, business interruption will compensate you for any resulting loss of earnings.

5) Legal Expenses: you will be protected if you become embroiled in a legal dispute about the repair or sale of a vehicle.

Of course, it’s essential to arrange insurance that is tailored to your specific commercial needs. Rather than taking out stand-alone Road Risk and Premises cover, we would suggest looking at a Motor Trade Combined policy that encompasses Road Risk, Premises and Liability exposure. Our comprehensive fact-check will reveal exactly which options are best for your business (you can also include cover for your own and customer vehicles) and provide an informed quotation. As always, the more eventualities you cover, the more peace of mind you will have.

Motor Trade Insurance

Monday, February 10. 2014
Do you buy or sell, repair or restore cars, vans, trucks or motorbikes? Do you work in a related sector of the motor trade, such as alarm or audio system installation, interior valeting, mobile breakdown, chip and scratch repair or windscreen replacement? If the answer is yes, and you make a profit from the business, then you should have an effective Motor Trade policy in place.

This category of insurance is specifically designed for anyone earning a living in the motor trade. And that doesn’t just mean a full-time franchise operating from a commercial premises or forecourt. If you’re private individual who enjoys going to auctions and buying and selling cars from home on a part-time basis, you’ll still need to be covered when driving your own or customers’ vehicles on the public highway. Otherwise, you are breaking the law. It’s as simple as that.

Motor Trade insurance is similar to a conventional motor policy in that there are various levels of Road Risk cover (Third Party Only is the minimum legal requirement and Fire and Theft and Comprehensive options are also available). While dealerships obviously need significant protection, most people trading from home only need to be insured for a sum of around £5000-£10000 to secure their stock. Of course, if you’re buying and selling you must also ensure that you are legally covered for customers’ test-drives (or indeed anyone, such as a mechanic, who needs to drive the vehicle). A Motor Trade policy can be easily extended to incorporate demonstration cover; this is called Accompanied Demonstration Use and is usually Third Party Only.

One point to bear in mind is that most insurers don’t actually spell out how many sales must be completed for an individual to be deemed as running a business. Do speak to us about this; we will be more than happy to help you assess whether or not you need Motor Trade insurance.

In recent years we have come across a number of cases where Motor Trade policies have been used as a cheap alternative to ordinary family multi-car insurance. While on paper it might seem to be a more economic option, it is not the correct cover. If you make a claim under a Motor Trade policy you will be asked for evidence of your business activity, such as profit and loss accounts or sales receipts. Failure to produce these documents could prove to be much more expensive in the long run. Equally, many private or commercial motor policies include a Driving Another Car benefit. This is only for emergencies when you need to jump into someone’s car and drive it; it is not designed for those making a profit from the motor trade.

A final thought. Motor Trade insurance can be a tricky area as policies are often subject to excesses and exclusion clauses, for example for high performance, high value or modified vehicles. That’s why we always run a thorough ‘fact find’ through which we collate information on an individual or company to establish the best policy for them at the most competitive premium. The well-informed client always makes better decisions!