Road risk insurance – a guide for motor traders
What is road risk insurance?
As a motor trader, it is vital that you can move vehicles around safely. This might be because you are buying or selling them, or carrying out repairs and servicing. Road risk insurance provides cover for the periods when vehicles are in your care and being used in the road. Usually, road risk insurance is a legal requirement in order to carry out a business that involves moving vehicles.
What risks does road risk insurance protect against?
Road risk insurance provides cover for when you are driving a vehicle and doing so in the course of your business. The insurance provides you with cover in case the vehicle is damaged on the road, for example when you are driving a recently purchased vehicle home from an auction.
Like standard motor insurance, road risk insurance is available with different levels of cover: third party only, third party, fire and theft and comprehensive. Unlike standard motor insurance, a road risk policy provides cover for the trade value of the vehicle you are driving rather than its market value.
Third party only policies provide cover where someone is injured or their property damaged in an accident. For example, if you drive into the rear of a van at a roundabout, the policy would provide cover for any injury or vehicle damage caused to the other vehicle, but not your own.
Third party fire and theft policies provide cover for damage to another person or their property, plus cover for your vehicle in the event of fire damage or theft. This is particularly useful if you are taking a vehicle over a long distance and will need to make stops, or even break your journey overnight.
Comprehensive insurance provides cover for injury to others or damage to their vehicle, as well as accidental damage including, fire or theft of your own vehicle. It also covers your vehicle against any damage incurred in an accident which is your fault.
For most motor traders, comprehensive cover is the most sensible option, particularly if the vehicle in question is high-value. This gives your investment the best possible protection.
Who is road risk insurance for?
If you transport vehicle in the course of your business, even if it is only a part-time business, you are likely to need road risk insurance. All motor traders who buy, sell or repair vehicles should consider whether road risk insurance is right for them.
For most motor traders with their own business premises, a policy which includes other areas of risk is usually more appropriate. Road risk insurance is best suited to those who run a business part-time or from their home.
Road risk insurance provides cover for named drivers only, so if someone else helps you transport vehicles, they will need to be included on the policy.
There are a few factors to consider when choosing a motor trade insurance policy that will work best for your business. Firstly, insurers will want to confirm that you are actually running a motor trade business – some people seek this insurance as a way to obtain cover for driving any vehicle.
You may need to be careful if you have more than one business in operation at your site. Your insurer will want to be sure that they are not providing cover for risks associated with another business.
When taking out road risk insurance, you will need to tell your insurer the general type of vehicle you wish to be covered by the policy. Your insurer might exclude some types of car, such as camper vans, classic cars, kit cars and agricultural vehicles.
How your premiums will be calculated
Insurers consider a range of factors to determine the level of premiums. They are likely to consider your experience within the trade, your claims history and whether there are any additional risk factors such as recent criminal convictions.
The cost of your policy will also be affected by the usual insurance factors such as your location, the value of the vehicles you trade in and the condition and nature of your business premises. Whatever your circumstances, road risk insurance is an essential requirement for protecting your business.
If you need reliable road risk insurance, why not contact Stride to talk through your requirements?