29 February 2024

What Is Motor Trade Insurance & Do You Need It?

By Road Runner

As a business owner, understanding which types of insurance you need and which you don’t can be tricky. Those in the motor trades contend with many unique risks which means specific cover for the industry is often recommended, if not required. In this guide, we’ll get to grips with the meaning of motor trade insurance, who needs it, how much it costs and more.

What is motor trade insurance?

Motor trade insurance covers professionals and businesses working in the motoring industry. It’s designed for anyone who works with vehicles directly as a part of their product or service. For example, traders who sell cars and mechanics who run a repair garage work closely with customers and commercial vehicles, which introduces some risks to their operation.

This type of insurance protects motor trade businesses from those industry-specific risks, as well as more general ones. This could be damage caused to customer cars while in their care or accidents on the road in vehicles being transported for sale. If you need this sort of cover, taking out a policy tailored to your type of trading is key to protecting your business.

There are a few different forms of motor trade insurance, as we’ll cover below, but it’s most commonly used by the following types of businesses:

 Car dealers

Businesses and sole traders buying and selling vehicles are likely to require some form of motor trade insurance. This is usually because cars need to be driven before or after a sale and for demonstrations during test-drives, among other things.

Vehicle recovery

As a breakdown and recovery operator, a tailored motor trade insurance policy can cover both the vehicles used in recovery operations and any customer vehicles that are being towed or worked on.


Mechanics have a duty of care when carrying out repairs and servicing on customer vehicles, so motor trade insurance covers liability for any accidental damage done. Tools, machinery, equipment and premises can also be protected.

Car body shops

Accessory fitting, detailing, paint spraying and performance modifying all carry the risk of damaging customer vehicles. Motor trade insurance can help protect body shops from this liability, allowing them to focus on delivering the best work possible.

Other motor trades

There are plenty more professions that could benefit from motor trade insurance, including:

What does motor trade insurance cover?

Different insurers offer packages with various features and benefits. Here at Road Runner, our motor trade insurance policies cover both your business and any staff you employ and can be tailored to the specific risks you face in your line of work.

In addition, there’s the option of more general forms of business insurance, so you don’t have to manage multiple accounts and policies. Our core products are as follows:

  • Road Risks Insurance: This covers you while you’re driving customer vehicles or company and sales vehicles on the road, for whatever reason. With it, you can go for a spin to test some repairs or transport a vehicle from one dealership to another with peace of mind.
  • Liability Insurance: This protects you against harm caused to employees or members of the public and damage caused to customer vehicles while in your care or as a result of your work. A must for many motor trade businesses.
  • Premises Insurance: This covers your business premises, whether it be a garage, showroom or body shop, as well as any tools, equipment and machinery you want to insure.

How much is motor trade insurance?

Each motor trade insurance quote is dependent on a few key factors, including:

  • The nature of your work in the motor trades
  • The level of insurance you opt for and what you want covered
  • The scale of your business and the size of its premises
  • Where your operation is located

If you want the lowest cost possible, you may be better off choosing only the essential and legally required insurance products depending on your trade. Our experts at Road Runner can help you create the best policy for you.

Is motor trade insurance a legal requirement?

Although motor trade insurance as a whole isn’t a legal requirement, individual elements can be. For example, employer’s liability insurance is a necessity if you employ any staff and road risk insurance is a legal requirement if you’re driving on public roads for any amount of time.

However, there are many benefits to be had by taking out a more complete motor trade insurance policy. Risks are ever-present in this industry and insurance helps to protect you and your business from any third-party claims or unexpected events.

Can anyone get motor trade insurance?

Although many would assume that anyone can get traders’ insurance, this would be incorrect. Just like every insurance policy, there are certain restrictions and eligibility criteria 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 who are at least 23 years old and have more than one year of experience.

If you’re unsure if you’d fit the bill, our friendly team can discuss your situation with you and help find out if you’re eligible.

Get covered with motor trade insurance from Road Runner

With over 25 years of experience in the industry and an excellent customer experience rating on Feefo, we’re a reliable partner for your business.

Get a quote for motor trade insurance with Road Runner today or feel free to contact us via phone or email for support or advice.