Who can drive the Vehicles on Your Motor Trade Insurance Policy?
If you buy and sell vehicles, whether they’re cars, vans, motorbikes or something else for a profit, then you will need to make sure that you have the appropriate motor trade insurance, to protect you. It doesn’t matter if you have another job as your main occupation and sell the cars as a side-line in your spare time as this will mean you need to take out a part-time Motor Trade insurance policy. This will acknowledge that your motor trade activity is only carried out on a part-time basis, and cover you as such. Alternatively, if your motor trade business is your full-time and main occupation then you will need to take a full-time Motor Trade policy instead.
Motor Trade insurance policies come in three different levels of cover, in the same way that your normal car insurance does, and they are Third Party Only, Third Party, Fire & Theft, and Comprehensive cover. If you’re a trader working from home, maybe using your own drive or land to store your vehicles and work on your cars, then you could qualify for a Road Risk policy. However, if you run your business from a designated premises, and maybe have more than one location or site, then you will need a Motor Trade Combined policy.
Spouse or Partner
One thing to remember on a trade policy is that it may help you save money elsewhere, and not just for your business. For example, if your wife, husband or partner has their own Car insurance policy to cover them driving a vehicle, then you can save money by adding them to your trade policy and cancelling their car insurance. If your partner is also your business partner, or is involved in the business as an employee, then this may not be applicable to you, but if it is, then you could save your household a good chunk of money!
You may also have a business partner (that’s not your spouse) who would also need to be covered for driving a vehicle on the policy, which is fine. However, always make sure you’re up-front with your insurance broker regarding who you want covered on the policy and what their relationship is to you and your business. Don’t be tempted to lie and try to get someone added under the guise of being part of the business, when actually they’re nothing to do with it and you’re just trying to save money and get them cheap insurance…this is called fronting and is very serious. If and when you are caught out, your policy can be cancelled and made void, meaning you never had appropriate cover in place at all. This could result in any unsettled claims being rejected, leaving you to find the money yourselves which could make a huge dent in the business coffers.
This applies to employees too. It’s ok to add your family members to the policy if they are employees, in the same way as non-family members who are employees, but always make sure you tell the insurer about their relationship to you. Different insurers may have different rules around minimum ages of drivers driving a vehicle, or other restrictions, so make sure you check and know exactly what is and isn’t covered on your policy.
If you do have any employees, don’t forget that you may need Employers’ Liability insurance too, though there are some exceptions for certain family members and small businesses – make sure you research this fully before making a decision.
If you have a lot of employees then you may want an ‘Any Driver’ policy. This, as the name suggests, will cover any driver driving on a motor trade policy – for your vehicles or the vehicles in your control. However, you will definitely pay for the privilege of having this cover, because it essentially means that the risk to the insurer is a lot greater due to the unknown number of people and the unknown driving record of whoever could be driving your cars. It also means that essentially you could have all of your cars being driven at any one time, which means the exposure for the insurer is far greater, and this will be reflected in the price you have to pay for this cover.
Alternatively, you may only want specific people to be added to your policy and these are called Named Drivers. By only having certain Named Drivers on your policy, the insurer knows the risk at any one time and will price the policy accordingly.
If your trade business involves buying and selling cars then invariably you’ll need customers to test drive them before they buy them. If this is the case, then you will need to have Demonstration cover added to your policy. This allows customers to test drive your cars and be covered under your policy. Alternatively, if you don’t have Demonstration cover, then customers can still test drive them, however it would have to be covered under their own car insurance policy, and they may not be comfortable doing this, which could ultimately lead to you losing business as a result.