2 January 2024

What is Road Risk insurance?

By Road Runner

There are many risks that drivers are exposed to – even on short journeys. Hazards can crop up when you least expect, which means that if you drive a customer’s vehicle for work, you need to make sure you’re covered.

Road Risk insurance is required by those working in the motor trade when someone drives vehicles that don’t belong to them. It’s the minimum legal level of cover needed to drive vehicles under their custody for motor trade business purposes.

What are the risks associated with handling a customer’s vehicle?

There are several risks associated with driving and handling vehicles. These risks are often heightened in industries and sectors where workers handle other people’s vehicles for work.

Risks that drivers are exposed to include collisions and damage to the vehicle. These instances can be exacerbated by several factors, including the driver, the journey and the vehicle itself.

Similarly, when carrying out a service or repairs on a vehicle for work, there are risks of damage or even loss of the vehicle.

How is road risk insurance defined?

Road risk insurance covers you when driving vehicles you do not own – and in the motor trade, this is a common occurrence. Repairers, dealers, buyers and others in the motor trade are required to move vehicles from one place to another. This means that if an accident occurs, you will be covered.

Who needs road risk insurance?

Most individuals working in the motor trade need road risk insurance if their work involves moving vehicles they do not own. This includes those working in the following areas of the motor trade:

• Repairs and maintenance
• Buying
• Selling

You should be operating a business on a full or part-time basis either from a business premises, from home, or on a mobile basis.

Why do I need road risk insurance?

If you work in the motor trade industry, it’s a legal requirement. If you don’t have it in place, you could face serious consequences. This starts with a £300 fine and 6 penalty points, but if the case goes to court, you could be disqualified from driving.

Even something as simple as test driving a customer’s vehicle could result in an accident – and if you’re not insured, you could land yourself and your business in a tricky situation with legal consequences. The only time a car doesn’t need to be insured is if it’s been declared SORN.

What does road risk insurance cover?

You can get road risk insurance to cover for your customers’ cars and depending on your policy, it tends to cover you for the following:

• Cover for damage to vehicles
• Cover for in-vehicle equipment
• Loss of the insured vehicle
• Cover for windscreen and window damage
• Cover for third-party legal liability
• Cover for foreign use
• Accompanied demonstration use
• Cover to include vehicles at your business premises
• Vehicles in transit

Road risk insurance is available from insurance providers at third party only, third party, theft and fire and comprehensive cover levels.

What does road risk insurance not cover?

Some exclusions may apply to your policy, including:

• Cover for employee vehicles
• Cover for loss or damage caused by incorrect fuel
• Cover for any vehicle being driven by a person not permitted by your Certificate of Motor insurance

What is the difference between road risk insurance and motor trade insurance?

While road risk insurance is a minimum legal requirement, motor trade insurance (otherwise known as traders’ insurance) is a wider policy that tends to include road risk insurance. You might only need road risk insurance, however.

Unlike road risk insurance, motor trade insurance is not a legal requirement. Having said this, it is highly recommended in most motor trades.

What does a traders’ policy cover?

Motor trade insurance covers staff when they’re driving or performing work on a customer’s vehicle and generally features road risk insurance.

Having motor trade insurance in place will mean you are meeting the legal minimum requirement, with examples of cover highlighted further up the page, while taking advantage of additional cover. For example, it covers employees while they’re driving or working on customers’ vehicles, on top of those owned by the business.

It’s commonly used by those who repair or sell vehicles, as it’s generally a good idea to get a policy that covers every employee in the business. In some cases, a part-time policy may be more beneficial to help keep costs down if you’re a part-time worker.

Can I drive any car on traders’ insurance?

You won’t be able to drive any car as road risk policies only allow you to drive vehicles used as part of your trade. You also need to be named on the insurance.

Does motor trade insurance cover my personal car?

Generally, you can’t use motor trade insurance to cover your personal car, as it isn’t the same as a private car cover policy. In this case, you will need to take out a separate policy for your own vehicles.

However, if you conduct a motor trade business, there may be some cases, where your wider motor trade policy can be applied to privately owned vehicles. Always speak to your insurance provider and check the details on your policy for clarification.

Get help with your road risk insurance with Road Runner

At Road Runner, we have over 25 years of experience under our belt, so we’re on hand to support you in securing the right policy for your circumstances. Whether you’re looking for road risk insurance only, or a more comprehensive motor trade insurance policy that integrates road risk protection, we have you covered. Our Feefo reviews showcase exactly how we’ve helped customers in the past.

Get a no-obligation road risk insurance quote from us today. Alternatively, speak with our experts directly by calling 03301 00 87 20.