28 February 2020

What is motor trade insurance – and do you need it?

By Road Runner
Mechanics repairing a car in a workshop
What is motor trade insurance?

Motor trade insurance is designed for anyone who works with vehicles as part of a business. This may range from a trader who is selling vehicles or running a servicing and repair workshop, to those working as mobile mechanics or in valeting and car cleaning.

Because the customer leaves their vehicle in your care, their insurance no longer covers the vehicle and so a specialist motor trade policy is required for you to do this. Depending on your personal situation, it’s vital to find a policy which is tailored and specific to how you are trading.

Who needs motor trade insurance?

Anyone who works with customer vehicles, either as part of a business or as an independent trader. In other words, if you and your staff have customer vehicles in your care, custody or control, you will most likely require Road Risks policy. A customer’s own insurance won’t necessarily be enough to cover you while you work on their motor.

If you trade from a business premises, and have equipment or stock of vehicles, then premises insurance can cover you against damage or loss.

Motor traders

If you are buying and selling vehicles for profit or income, regardless of whether it is your full-time job or a part-time side business from home, you are likely to require Road Risks cover.

Vehicle recovery

As a breakdown and recovery operator, a tailored insurance policy would be designed to cover your own vehicles used in recovery operations and any customer vehicles that are being towed or worked on.


If you are a mechanic, and are trading from a workshop, you may need cover that will protect your tools, machinery and building contents, as well as public liability. This is important as it will provide additional cover if you are working on customer vehicles, which is likely as a mechanic.

Accessory fitters

Due to the nature of this trade, your insurance should cover you for the work you carry out on customer vehicles, whether it is fitting an exhaust or changing tyres. As an accessory fitter you are likely to require liability insurance, which will cover your labour and any parts that you are fitting.

What does a policy cover?

Here at Road Runner, our motor trade insurance policies are underwritten by AXA, meaning you can be assured of a consistent service in ever-changing markets.

Most of the time, traders’ insurance is designed to be flexible, and cover both the business and any staff. If for instance you own a workshop, your policy can be tailored to your specific needs – which might include allowing new staff to drive any customer vehicle while it’s being worked on.

Traders’ insurance can cover several trades, and some that Road Runner cover include:

  • Mobile mechanics
  • Vehicle sales
  • Valeting
  • Vehicle Repair and Servicing
  • Bodyshop and SMART repairs
  • Exhaust, tyre and accessory fitters
The key things to know

It’s the law to have insurance if you are a driving on the roads. If you are a motor trader, who is trading for profit or income, it’s against the law to not have a motor trade insurance policy in place.

As mentioned before, the type of trade you are working in determines what type of policy you will need. The minimum cover is third-party only, but liability is an option.

If you are operating in the motor trade, then it’s important to also remember that you have an obligation to update the Motor Insurance Database (MID) with up to date information.

If you are looking to drive multiple vehicles, but are not actually running a business, a motor trade policy is not right for you.

What restrictions might there be on getting cover?

You may think that anyone can get traders insurance but as with any insurance policy, there will be certain restrictions applicable to certain traders. Road Runner’s policies are ideal for both full time and part-time traders (business, non-hobby), based in England, Wales and Scotland and who are at least 23 years old and have more than one year of experience.

Even if you don’t fit the standard definition of a more common type of trader, we can probably help you save money on your motor trade insurance. Why not give our friendly team a call on 0330 100 87 20 today to find out if we can help you.

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