The right cover - protecting your vehicles
By Michael Barnett
With many Motor Traders buying just ‘Road Risks’ cover, are you sure you have the cover you need? ‘Road Risks’ insurance generally covers just that – the risks associated with driving vehicles on the road. So what about your customer’s vehicles, or stock vehicles you have for sale? How about vehicles ‘in transit’? Are you sure you have the cover you need to protect them? Not everyone needs these covers, so they are generally included as an extension or as part of a wider Premises policy. Unless you understand the risk, you may not know you need the cover.
Mike Barnett, Scheme Underwriting & Risk Manager for specialist Motor Trade insurer Road Runner Motor Trade Ltd, explains some of the situations when vehicles may not be covered automatically and what Motor Traders should consider.
Vehicles at premises
Do you trade from commercial premises, a lock-up, storage unit or even just a plot of land? Do you have vehicles that you own (for sale) or customers’ vehicles that are left overnight at your business premises? If the answer to either of these questions is yes, you need to check that the vehicles are insured against theft and malicious damage whilst left overnight. Make sure you explain this to your insurer and ask about the cover they can offer.
Insurers often separate this risk from the general risk associated with driving a vehicle on the road because of the increased potential for claims that arises when they are left unattended. As long as you can demonstrate a certain level of security, you should be able to insure the risk. But read your policy carefully, or ask your insurer, if you are uncertain of the security measures they require, as failure to adhere to these could result in a claim not being paid.
If you trade from home, it is likely you are covered as your own residence is not generally deemed a ‘business premises’.
Vehicles in transit
If you get involved in vehicle delivery, recovery or even vehicle sales, it is probable that you have vehicles carried in transit on another vehicle, recovery truck or trailer. The law requires only that the vehicle being driven on the road has the minimum insurance required, but the value of the vehicle being carried in transit could be significant.
A standard Motor Trade ‘Road Risks’ policy only covers vehicles while on the road, so you need to ensure you advise your insurers if you undertake any work of this nature. In most cases it should be possible to obtain specific cover for vehicles being carried in transit and because you are only covering the damage and not the liability associated with driving on the road, it may not cost as much as you might think.
If you sell vehicles, chances are your customers want to test drive them. Many Motor Trade policies restrict driving to named individuals and even those that don’t, may define the type of person allowed to drive – perhaps employees of the business only. So if you are involved in vehicle sales, consider whether you need dedicated demonstration cover and check what restrictions apply. Does your policy require the test driver to be accompanied and if so by whom? Is there a minimum age for the driver, or perhaps some driving licence restrictions?
A specialist insurer should know if a customer has the potential to need one of these covers. Motor Traders involved in specific areas of work are likely to do so, so make sure you explain exactly what work you are involved in, even if it is only a small element of what you do. You may only transport vehicles occasionally, but it could still be a significant financial risk to your business. Is that a risk you want to take?
The information provided is intended to be a guide only. If you are in any doubt about your personal circumstances, you can contact us for advice.