We can insure a wide range of businesses

If you operate in the motor trade industry, you’ll need to consider which type of road risk insurance you require for driving vehicles associated with work.

Whether you’re driving customer vehicles or new purchases you’ve made at auction, we can provide you with insurance that helps keeps you safe.

What is road risk insurance?

Road risk insurance is cover specifically designed for motor traders who drive vehicles they don’t own, including cars bought for the business. These might be vehicles you’ve purchased at auction and intend to resell.

Road risk insurance is the minimum level of cover required by law. As such, you must have it when operating as a motor trader or driving vehicles in any way that relates to your business. Motor traders require road risk insurance, whether they work from home, operate a garage, or run a mobile business.

What does road risk insurance cover?

Road risk insurance covers specific areas that apply to your role as a trader. However, it is not a ‘complete’ cover for all trade activities and instead focuses on driving vehicles within the remit of the business.

But what does road risk insurance NOT cover? Well, there are a few exclusions to this cover, and some of these may surprise you. For example, if you run a tuning business, you may find road risks insurance doesn’t cover customers’ high-performance sports cars.

To make it clear, here’s what road risk insurance typically does and doesn’t cover.

What road risk DOES cover What road risk DOES NOT cover
Any customer vehicles left in your care. Family fleets - these require a multi-car personal insurance policy.
Vehicles regarded as ‘in the trade,’ such as cars bought at auction or from main dealer trade-ins. Vehicles that are excluded from the policy, such as high-end performance cars. These will be clearly defined in any insurance agreement.
Some business vehicles such as vans, although conditions apply. Other vehicles not used in the trade. The policy stipulates only trade vehicles that are either being worked on or to be sold are covered.

The main thing to note here is that you should always seek clarity from your insurer if there are any exemptions or rules you’re unsure about. For example, if you want road risk insurance to cover your work vehicle, you should let the insurer know before any quotes are generated.

Does road risk insurance cover you to drive any vehicle?

No. Road risk insurance is specifically for vehicles you drive as part of your trade. It does not cover personal vehicles, family fleets, or other vehicles. However, some policies and insurers are willing to configure cover to suit your specific needs—so it’s worth talking to our team if you have a clear requirement, such as a work van you’d like on the policy.

Levels of cover for road risk trade insurance

So, now you know what the policy covers—but we still need to explore what level of cover is provided. Like personal insurance, there are different levels of cover: third-party only, third-party fire and theft and comprehensive. Each of these covers also comes with an excess agreement, so make sure you’re happy before taking out a policy.

Third-party only road risk insurance

This type of cover only applies to injuries or damage to third-party property or people. It offers no actual protection for the vehicle you’re driving, which may lead to costly issues if you get behind the wheel of a customer’s car.

Third-party fire and theft road risks

This type of cover adds an extra layer of protection. It is similar to third party only, but extends to insure against fire damage or theft on a third-party basis.

Comprehensive motor trade risks insurance

This level of protection is the highest available and covers the vehicle driven, whether it’s a third-party incident or not. Comprehensive cover meets the needs for many motor traders driving valuable customer vehicles.

Comprehensive cover doesn’t mean you’ll receive the entire value of a vehicle. Instead, insurers typically pay the car’s trade value instead of the personal valuation. For instance, a car you bought at a dealer price would be covered for that value rather than any resale costs.

Do I need road risk insurance?

If you’re in the motor trade, you most likely need road risk insurance unless you never drive vehicles for work. For most traders, that’s highly unusual, as you’ll almost always be expected to drive a customer or trade car. Therefore, whether you’re selling cars or repairing them, you’ll need road risks insurance at a minimum before sitting in the driver’s seat.

Unsurprisingly, many motor traders want to extend their cover further to protect their premises, tools, equipment, and business. If you’re one of them, you’ll be pleased to hear that we offer a motor trade combined insurance policy for traders who operate from business premises and want to combine road risks insurance with other protections.

Motor trade businesses that require road risk insurance:

  • Car dealers and part-time traders: test-driving or delivering customer vehicles.
  • Mechanics/servicing/repairs: testing the car or driving to the garage/off-site testing.
  • Tyre fitters: driving any work vehicles to collect inventory or test customer cars.
  • Valeters, car restoration and body shops: driving customer vehicles for any purposes.
  • Recovery agents and collection and delivery agents: recovering vehicles or moving vehicles for a fee.
  • Young motor traders: extra cover may be needed for young traders. In which case, we offer a specialist young motor trader policy.

How much does road risk insurance cost?

Road risk insurance is the minimum level of cover you need as a motor trader driving vehicles for work, so it is often cheaper than other policies.

However, there are lots of factors that impact the premium you pay, such as:

  • Driver age
  • Your business type
  • The kind of vehicles you work with
  • Your employee structure
  • Your chosen level of cover
  • Your chosen excess
  • Whether you want road risks insurance or motor traders combined insurance.

A car dealer listing higher-powered, higher-valued vehicles will typically face higher road risk insurance costs.

How to reduce the cost of road risk insurance

Reducing costs means managing the factors above. An older driver with a responsible trading history will typically see lower premiums than a young trader just starting out. In fact, it may even be worth working for another owner until you’re older to help keep premiums down.

Further ways to reduce costs include combining your risk insurance with a motor trader’s insurance policy. While this option may lead to a higher overall premium, you could benefit from far more protection in one policy which may make it it more cost-effective for your business.

What additional cover is available with road risk insurance?

Motor trade insurance is a bespoke offering that helps protect against the specific issues you deal with as a trader. From cover when driving customer vehicles through to protection against lawsuits and other legal challenges, there is a range of options worth considering, including:

  • Public liability insurance: protection against claims made by the public for alleged injury or damage.
  • Employers’ liability: a general legal requirement if you have staff in your business.
  • Demonstration cover: cover for unaccompanied demonstrations such as test drives.
  • Cover for premises, vehicles, and tools: protection for your business premises and/or vehicle stock/tools.
  • Motor trade combined cover: a more comprehensive plan that provides cover from premises and tools through to money on site, stock, and road risks.

Why choose Gallagher for road risk insurance?

We’re specialists in motor trade cover, and have been providing policies for many years. That means we know what cover can meet your needs and can help you decide based on cost efficiency and the risks your specific trade faces. Rest assured that we won’t try to pressure you into any particular cover level—we’ll simply help you make the responsible decision.

How do I get cover?

Get in touch with our team today to discuss your cover requirements, and let’s get those wheels rolling.

Policy limits and exclusions may apply, please see the policy wording for full terms and conditions.

  • Gallagher Road Risk Team