Starting a dealership
Motor trade insurance: a dealer's guide
What motor trade insurance covers, the policies a UK dealer needs, and what actually drives your premium.
TL;DR
Motor trade insurance is a specialist policy that covers you to drive customer and stock vehicles, protect vehicles on your premises, and meet employer and public liability requirements. Road risk is the minimum; a combined policy adds premises, stock and liability cover.
The main policy types
- Road risk only — covers driving any vehicle for trade use.
- Combined — road risk + premises, stock, tools and liabilities.
- Demonstration — extends cover to customers driving your stock.
Employer and public liability
Employer's liability is a legal requirement (£5m minimum) as soon as you employ anyone, even part-time. Public liability protects you when a customer is injured on your premises. Both are usually bundled in a combined policy.
Extras worth having
Legal expenses cover, GAP cover for high-value stock, cyber cover if you take card payments online, and product liability if you sell parts. Ask your broker to break down each element rather than accepting a bundled quote.
Not insurance advice. Get comparative quotes from at least three specialist motor trade brokers before renewing.
Frequently asked questions
Do I need motor trade insurance from day one?
Yes. As soon as you buy stock or drive vehicles that are not privately insured to you, you need a trade policy.
What is road risk cover?
The minimum motor trade policy: third party, third party fire and theft, or comprehensive cover for driving any vehicle in the course of your business.
What is a combined policy?
A road risk policy plus premises cover, stock cover, public liability, employer's liability and buildings/contents. Standard for a fixed pitch.
Can I get insured with no experience?
Yes, but premiums are higher. Insurers look at driving history, age, previous trade experience, and the postcode you operate from.
What claims do dealers make most?
Test-drive collisions, theft from the pitch, and accidental damage during movement or valeting.
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