Road Risks

The major difference between a private motor policy and a motor trade policy is that a private policy specifies the vehicle and the driver. A motor trade policy specifies the driver only, not the vehicle, so you can drive any vehicle for motor trade purposes - and you don’t have to take out separate policies for each vehicle.

A motor trade policy is a policy that covers a motor trader to drive any vehicle that is their property and any vehicle “under his custody or control for motor trade purposes.” This is vital when a motor trader has several vehicles in his care - customers’ vehicles and demonstration use (including testing of customers’ vehicles and demonstration of vehicles for sale).

Cover can also be provided for stock vehicles for sale (including those either on a forecourt or standing on the highway) and the motor trader’s own vehicles.

The big question is: To what extent do you want to protect your and your customers’ vehicles?

• Third Party Only (TPO) insurance is the minimum legal requirement for vehicles to be driven on public roads. TPO insurance will only cover loss, damage or injury inflicted on a third party. If you have Third Party Only insurance, your own losses, damage or injury (apart from passengers) will not be covered. A Motor Trader therefore really needs extra protection for his vehicles above this basic Third Party requirement.
• Third Party Fire and Theft (TPFT) is a step-up from Third Party Only. TPFT pays out in the event of loss or damage to vehicles under the motor trader’s custody or control in the event of theft or fire, as well as to third party damage or injury claims. This is particularly relevant if vehicles are stolen and “torched”. The cost of TPFT cover is nowadays not significantly different to Comprehensive cover.
• Comprehensive (Comp) A Comprehensive policy includes the same cover as TPO & TPFT plus accidental damage to the vehicles that the trader owns or has care of. So if a customer’s vehicle is damaged in an accident while being tested, Comprehensive cover will cover the cost of the repairs.